Impact Of Effective Financial Management At The Local Government System

INTRODUCTION

Background of the Study
Nigeria as a sovereign nation operates a federal system of government i.e. the federal government, state government and the local government councils.
Onwo (1992:4) observed that each level of the three tiers of government derive its power not from the magnanimity of the central government but from the constitution each level of government has defined responsibilities assigned to it by the constitution. The implication of this, is that three segments of government are mutually interrelated in a unified effort to make life worth-while for the masses.
Enugu North local Government Area was created out of Awgu local government in October 1996 by the late head of State General Sani Abacha as one of the new local government councils. It is facing a very serious crisis of development since its creation some problem facing the council include: insufficient office accommodation, staff quarters and office infrastructures.
These problems seems to be insurmountable indigenes of the local government are desirous of enjoying modern facilities, improved means of transportations such as good roads, networks and mass transit transportation services.
These desires are inline with stated objective of the local government such as constructions and maintenance of roads, provision of health centers and maternity homes sanitization, provision of primary Education and many other as sponsored by the federal military government.
The federation (Nigeria) year’s book of 1985 outlined the aims of the local government system in the country. According to that document one of the cardinal aims of the local government system is to make appropriate service and development activities responses to local wishes and need by delegating authority to local representative bodies.
The citizens expect the council to excel in development activities. They would like to please the community or communities in the local government area through the provision of functional federal roads and public utilization.
The council administration in the other hand complains of inadequate finance to meet up with the numerous responsibilities yearning for attention according to the guideline for local government reform or 1976 “it must ne recognized that if meaningful local government is to be expected in Nigeria, much larger financial resources are needed.
They also complain that staff salaries alone drain a high percentage of the monthly allocation financial expert’s postulates that money is at the center of development projects.
Acquisition and proper accountability of funds are the pivot upon revolve.
Adedeji (1979) capped it all when he declared that the success or failure and the effectiveness and ineffectiveness of local government depend on the financial resources available to the individual local government and the way these resources are utilized from the forgoing, it seems that an empirical study into the revenue base of the local government system at this harsh economic period is not only useful but very vital. It is therefore against this background that this project work is being undertaken with a view to discover the impact of effective financial management at the local government system with particular reference to Enugu north Local Government Area of Enugu State.

Statement of the Problem
The relevance of the local government council as the government at the grassroots level is measured by the quality and quantity services rendered to the rural dwellers for the council to render meaningful services, inform of provision of basic amenities, creation of employment opportunities for the citizens and pay staff salaries as and when due, money is undoubtedly required without the availability of revenue, a local government council will not only be in capable of serving the people but will undoubtedly crumble. It therefore follows that for the local government to discharge its statutory functions effectively. It should not only be adequately funded but such funds should be effectively applied.
One of the fundamental problems in the local government financial management is
(i) The issues of effective utilization of revenue available to the local government Enugu North Local Government Council may have its unique problems that militate against its financial management.
(ii) The problem of delay in payment of federal state government grants to the local authorities.
(iii) The problem of accountability in the local government system.
(iv) Another problem is that of ineffective financial control and management both internally and externally.
(v) The problem of financial mismanagement and embezzlement of available funds in local government council.
Finally, the problem of corruption as stated by Oluwale (2000) militates against the utilization of local government revenue. Against this background, the researchers want to identify the impact of effective financial management at the local government system.
Purpose of the Study
The central focus of the study is to critically analyze the impact of effective financial management to Enugu North local government area as a case study:
(i) The study is meant to identify the major revenue source available to local government.
(ii) To ascertain the problems that confronts the councils of financial management for their services.
(iii) To find out if or not the revenue is adequate for the council’s expenditure.
(iv) To investigate the system of financial control in the local government council.

Significance of the Study
The significance of any human endeavor is measured by its relevance to solving human problems. Therefore, the significance of the study is measured by its relevance to solving the problem of effective utilization of revenue available to local government in Nigeria.
This project will be of benefit first and foremost to the Enugu north local government administration, as it will expose to them the potential sources of generating revenue internally.
Secondly, it will help the council to strengthen its financial bases as this study would highlight some identified problem hampering the utilization of revenue in the council.
Thirdly, it will also be useful to the indigenes of Enugu North local government to co-operate with the local council administrators to enable them build a viable local government by paying their taxes and rates promptly.
Fourthly, the project will be useful to various inflation like Enugu State College of Education “Technical” for gaining greater knowledge and understanding of the impact of effective financial management.
Finally, the project will be useful to the general public, organizations, companies etc that may have interest in the project.

Research Questions
In the effort of carrying out this research, the following questions were formulated:
i) Is there adequate policy in place to ensure effective financial management in the local government system in Nigeria?
ii) Is there revenue mobilization system in the local government?
iii) Is the use of revenue agent and consultants more effective means of assessing and collecting revenue for the local government?
iv) Is there proper financial records and book keeping in the local government system?
v) Is the internal control system of the local government adequate and effective in ensuring value for money use of fund?
Formulation of Hypothesis
Ho: Effective financial management will ensure proper and adequate service delivery at the Enugu North Local Government Area.

Scope/Delimitation of the Study
This is centered on the impact of effective financial management at the local government system in Nigeria but due to the wide or vast nature in Nigeria the researcher now chose Enugu North local government as a case study to deal with this particular impact in other local government in Nigeria. The study is also centered on the source of revenue available to local government both internal and external source of revenue.

Definition of Term
Some concepts and terms required proper explanation or definition to enhance our understanding of the theme where necessary opinions of scholars will be cited to illustrate the terms.
Democracy
The Ancient Greeks defined democracy as a government of the people, by the people and for the people. This political arrangement allows every adult male citizen to participate in government activities.
Dare (1981) postulates that modern Democracy is a system of government which gives individual maximum freedom and periodical opportunities to choose their leaders and programmers. Multiple party systems are vital characteristics of a democratic government.
PRAGMATISM
The term pragmatism is derived from the Greek from which practical action arise.
It could simply be referred to as philosophy or practical consequences or result orientedness. In our context it is used to describe political programmers aimed at bitterness living standard of the masses.
Rural Development
This is a strategy designed to improve the socio-economic life of the rural dwellers. It involves extending the benefits of development to the less privileged in the society when applied to local government councils as a third tier of government.
In the country, it means conscious effort by the government to carry government programmers to the village level. In so doing, deliberate actions are initiated to improve the rural population.
Accountability
Owing to the fact that local government provides local services like sanitation, Education, transportation etc to the people of the area, it is logical that it is accountable to the local people within it area of jurisdiction.
This principle of accountability is better ensured by making local government or local government bodies’ elective institution if they function below expectation, they may be criticized by the people or voted out during the next elections.
Absence of local accountability may make them in different and insensitive to the need, feeling and aspiration of the local people.