Effects Of Accountability And Transparency In Financial Management Of Local Government
(A Case Study Of Bende Local Government)
Accountability and transparency play pivotal roles in enhancing the financial management of local governments by fostering trust, integrity, and efficiency. When local governments uphold accountability, they ensure that public funds are used responsibly and in accordance with established regulations and standards. Transparent financial management practices enable stakeholders to access relevant information, understand decision-making processes, and hold officials accountable for their actions. By promoting openness and honesty, accountability and transparency help mitigate corruption, minimize financial mismanagement, and encourage prudent fiscal practices. Additionally, they enhance the credibility of local governments, attract investment, and ultimately contribute to sustainable economic development and the well-being of communities.
There has been a persisting challenges of accountability and transparency in local government councils in Nigeria. The objective of this study has been to ascertain whether accountability and transparency has put to check the circumvention of due process in financial and non-financial activities of the Local government council in Nigeria. A survey research design was adopted for the study, 55 Adminstrative management and 30 internal auditing totaling 85 was randomly sampled and stratified among members of staffs in local government out of 108 population sample. Three research questions and hypothesis testeed at 0.05 percent levelof significance guided to study. Frequencies, percentages, Means and standard derviation were employeed to answer the research question while Z-test statistics were used to test the hypotheses. It was discovered that the process of accountability and transparency has affected the official and non-official financial behavourial attitudess of council staffs in Nigeria. It was recommended that there should be adequate senstisation through, workshops seminars and lectrures on the need for accountability and transparency in the government System.
Approval Page
Certification
Dedication
Acknowledgement
Abstract
Table of content
List of Tables
Chapter one
Introduction
1.1 Background of the study.
1.2 Statement of the problem.
1.3 Research questions.
1.4 Objectives of the study.
1.5 Research hypotheses.
1.6 Significance of the study.
1.7 Scope of study.
1.8 Limitations of the study.
1.9 Definition of terms.
CHAPTER TWO
2.0 REVIEW OF RELATED LITERATURE
2.1.1 Financial management.
2.1.2 Achieving accountability in financial management.
2.2 Structure/functions of a local government.
2.2.1 Functions of a local governments.
2.2.2 Financial administration profile of a local government.
2.3 Auditing in the local government.
2.4 Budgeting in the local government.
2.5 Financial memoranda.
2.6 Methods of local government account and the responsibilities.
2.7 Accounts kept by local government.
2.8 Revenue collection machinery.
2.9 Problems of revenue collection in local government.
2.10 An overview of the major source of fund/revenue by local governments.
2.11 The external source of fund/revenue by local governments.
2.12 Overview of government accounting.
2.13 Financial records
2.14 Functions of the head of service: the treasurer and legislative arm of local government.
2.15 Control measures adopted by the local government council.
2.16 Measures for fighting corruption in local government.
CHAPTER THREE
3.0 RESEARCH DESIGN AND METHODOLOGY
3.1 Research methodology.
3.2 Research design.
3.3 Population of the study.
3.4 Sample design and techniques.
3.5 Source of data collection.
3.5.1 Primary source of data.
3.5.2 Secondary source of data.
3.6 Instrument for data collection.
3.7 Validity and reliability of measuring instrument.
3.8 Method of data analysis.
CHAPTER FOUR
4.0 DATA PRESENTATION AND ANALYSIS
4.1 Presentation and analysis of data.
4.2 Test of hypotheses.
4.2.1 Hypothesis one.
4.2.2 Hypothesis two.
4.2.3 Hypothesis three.
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Summary of findings.
5.2 Conclusion
5.3 Recommendations
5.4 Suggestion for further study.
Bibliography
Appendix I
Appendix II
INTRODUCTION
1.1 THE BACKGROUND OF STUDY
Accountability and transparency has been critical issue in financial
management of local government. It has been hampering the performances of the
council and has been and is still a yet problem to be solved. It could be traced to
have started during the early era of management, when people are in co-operative
efforts to achieve aims which they could not achieve individually.
What is today known as local government in Nigeria has been
metamorphosed from the pre-colonial transitional system of government which
was highly localized according to the peculiarities of the areas. The local council
or native authority presents the basic unit through which any nation administers her
people of the grass-roots level. The theory of local government therefore, is that
there must be an administrative agency through which the central government
governs the people in their respective homes.
All over the world, the structure; the form and the functions of the local
government are determined by the political beliefs of the people who control the
central government. The local unit usually operated under a council which may
consist of persons elected through democratic process by the local inhabitants or
through persons appointed by the government to run the affairs of the local
inhabitants.
Starting from the early 1950s, there have been lots of re-examination of the
institution of local government in Nigeria. There have been a large amount of
military decrees, legislature and judicial activities and finally, reforms from
committee‟s recommendations. Meanwhile, the most remarkable of all these in the
1979 local government reforms made the Nigerian local government states. Local
government is the government at the grassroots that is nearest to the local
populace. The implication of its constitutionally guaranteed governance structure
and its closeness to the people necessitate the need for accountability and
transparency in financial management, and their norms in governance, more
evident at this level.
But contrarily, local governments in Nigeria are often seen as nurturing
grounds for barefaced corruption and near absence of accountability and
transparency in conduct of public service. Local government council however,
instead of discharging their functions as development centers to the people at the
grass root, acquired notoriety for corruption, fiscal indiscipline and overall
irresponsibility. The lack of integrity, accountability and transparency at the level
of governance definitely constitutes a heavy toll on the well-being of the people of
local government (Agbo 2012:20).stealing, embezzlement and misappropriation of
fund has become a major hobby in Nigerian local government.
Circumvention of financial and non financial issue in the Nigerian
local government has been on the increase, geometrically. this issue and many
others brought the need of this research to identify the responsiveness of local
government administration to accountability and transparency in their activities
and the changes if any accountability and transparency in responsibility has
brought to the local government administration since its invention as a mode of
operation in Nigerian government.
1.2 STATEMENT OF THE PROBLEM
The research work is to evaluate and investigate the problems associated
with lack of accountability and transparency in financial management of local
government council. Local government councils has been faced with the problem
of employments racketing, corruption in procurement, internal revenue collection,
award of contracts to the wrong contractors, etc.
Salaries and allowances are paid to non-existing worker as if they are
duly recruited staff of local government. Government goes on to pay this money
without a due process to ascertain this transparent nature of transaction. The
accounting officers in this process go on in this act without adequate accountability
of its responsibility.
Overhead expenditures in the council are incurred without
documentation; documents that are not favorable to the council chairman or
officer-in-charge are destroyed to avoid persecution after services. Tender are not
observed as a process of procurement but insistently friends and family members
are not given the mandate to supply goods and provide services to the council
without tenders.
Contract award has been on man know man, which could either be political
allies or financers. These contractors as a return to investment of financial support
to the council chairman either abandon or execute the contract to the extent to
which they wish, in other to recoup their money invested in election of the council
chairman knowing fully well that the council chairman will not query him.
In this acts, council inhabitants suffer. The federal government of Nigeria
presumes that introduction of accountability and transparency (the progress) in
government activity down to local government could put a check to these illicit
activities in financial transactions of government down to council activities.
This research tends to access the efficacy of accountability and
transparency inventions in the local government financial and non-financial of
government down to council activities as enshrine by due process office.
1.3 RESEARCH QUESTIONS
The following research questions as designed to attend the objective of this work;
1) To what extent does accountability and transparency put check to the
circumvention of due process in the financial and non-financial activities of
the local government council in Nigeria?
2) To what extent has the inhabitants of local government council benefited
from the proceed of accountability and transparency in improvement of
social amenities?
3) To what has the process of accountability and transparency affect the official
and non-official financial behavioral attitudes of council staff in Nigeria?
1.4 OBJECTIVE OF THE STUDY
The following objectives to this research work stand to be achieved;
1) To ascertain whether accountability and transparency has put to check the
circumvention of due process in financial and non-financial activities of the
local government council in Nigeria.
2) To ascertain whether the inhabitants of local government council have
benefited from the proceed of accountability and transparency through the
improvement of social amenities.
3) To ascertain whether the accountability and transparency have affected the
official and non-official financial behavioral attitudes of council staff in
Nigeria.
1.5 RESEARCH HYPOTHESIS
The research work is based on the following hypotheses which are
formulated in tackling the problems in the subject.
HO: Accountability and Transparency has not put to check the circumvention of
due process in financial and non-financial activities of the local government
council in Nigeria.
H1: Accountability and Transparency has put to check the circumvention of due
process in financial and non financial activities of local government councils in
Nigeria.
HO: The inhabitants of local government council has not benefited from the
proceed of accountability and transparency in improvement of social amenities.
H2: The inhabitants of local government council has benefited from the proceed of
accountability and transparency in improvement of social amenities.
H0: The process of accountability and transparency has not affected the official
and non-official financial behavioral attitudes of council attitudes of staff in
Nigeria.
H3: The process of accountability and transparency has affected the official and
non-official financial behavioral attitudes of council staff in Nigeria.
1.6 SIGNIFICANCE OF THE STUDY
This research work will enable the researcher to establish the possible
factors causing improper accountability and transparency in financial management
in the conduct of public sector in Nigeria.
It is equally expected that, the research work will help to provide solution
which will be applied in improving the stability in the public sector. This study
therefore, will expose the weakness of the local government council system.
Finally, the study will generally be of immense importance to the readers
on various agencies establishing by federal government in fighting corruption in
Nigeria.
1.7 SCOPE OF THE STUDY
This study as the case may be covers the nature of accountability and
transparency in financial management in the local governments with particular
reference to Bende local government area of Abia state. The study takes a holistic
approach in its research to unveil the challenges and problems hindering the proper
accountability and transparency in financial management in local government and
better ways of curbing them.
The study also looked at the basic ways of fund and revenue sources in the
local government and its disbursement.
1.8 LIMITATIONS OF THE STUDY
In this research work, there are many constraints that affect the output of
this work. One of the limitations is time frame given to this work by the school for
the writing and submission of this project work as well as academic and personal
pressure was faced.
Also, it was not easy collecting information from the council area. Officers I
met did allow me access to some of their documents for security purpose.
Furthermore, most of the personnel in Bende council area are not qualified
accountant and this imposed some problems in data collection. Exact is one of
major problem in school, getting it from the management or people in authority is
not easy financial limitations is another, imposing a big constraint in conducting
the research work effectively; particularly in administrating of the question naira
and lack of adequate material for the study.
1.9 DEFINITION OF TERMS
LOCAL GOVERNMENT: Is the third tier of government in Nigeria. It is
the government at the lower level that has power of control our local affairs as well
as the staff by carrying out its functions.
REVENUE: Is fund raised by the government for public purposes and
constituting of taxes, licenses, fines, special assessment.
ALLOCATION: Is specified amount given or allocated to various local
government in the country by the federal and state government to carry out their
day to day.
MANAGEMENT: The achievement of organization and goals through an
effective and efficient utilization of human and material resources.
COUNCIL: This means an area defined to carryout government functions.
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Effects Of Accountability And Transparency In Financial Management Of Local Government:
Accountability and transparency play crucial roles in the financial management of local governments. They are essential principles that help ensure the responsible use of public funds, promote good governance, and build public trust. Here are some of the effects of accountability and transparency in the financial management of local government:
- Enhanced Public Trust and Confidence: When local governments are transparent about their financial activities, expenditures, and revenue sources, citizens are more likely to trust that their tax dollars are being used appropriately. Transparency fosters confidence in the government’s ability to manage funds effectively and efficiently.
- Reduced Corruption and Fraud: Accountability and transparency act as deterrents to corrupt practices and financial mismanagement. When financial processes and transactions are open to scrutiny, there is less opportunity for misuse of funds or embezzlement.
- Effective Resource Allocation: Transparent financial management allows citizens to understand how resources are allocated to various projects and services. This enables better decision-making based on community needs and priorities.
- Informed Decision-Making: When financial information is readily accessible to the public, local government officials, and stakeholders can make more informed decisions. This leads to better planning, budgeting, and resource allocation strategies.
- Improved Service Delivery: Transparent financial practices ensure that funds are directed toward delivering essential services and infrastructure projects that benefit the community. Mismanagement and diversion of funds are less likely to occur when transparency is in place.
- Accountability to Stakeholders: Local governments are accountable to their constituents and other stakeholders. Transparency in financial management allows these groups to monitor the use of funds and hold officials accountable for their decisions.
- Effective Budgeting: Transparent financial processes aid in the development and execution of accurate and realistic budgets. When revenue sources, expenditures, and financial obligations are clear, local governments can create budgets that align with available resources.
- Credibility in Borrowing: If a local government needs to borrow funds for development projects, having a track record of transparent financial management can enhance its credibility in the eyes of lenders and creditors.
- Legal and Regulatory Compliance: Many jurisdictions have laws and regulations governing financial transparency in public institutions. Adhering to these regulations helps local governments avoid legal issues and potential penalties.
- Stakeholder Engagement: Transparency invites community members to engage in discussions about financial matters, budget priorities, and overall governance. This engagement leads to a more participatory democracy and a sense of ownership among citizens.
- Long-Term Financial Stability: By practicing accountability and transparency, local governments can establish a foundation for long-term financial stability. This includes building reserves, addressing financial challenges promptly, and ensuring the sustainability of public services.
- Attracting Investment: When potential investors and businesses see that a local government is transparent and accountable in its financial management, they may be more willing to invest in the region, leading to economic growth.
In summary, accountability and transparency are essential for fostering trust, preventing corruption, promoting effective resource allocation, and enabling better decision-making in the financial management of local governments. These principles contribute to the overall well-being and development of the community by ensuring that public funds are used for their intended purposes.