CHAPTER
ONE
1.1 BACKGROUND OF THE STUDY
Local government is the third tier of
government in Nigeria. The Local government system was entrenched in the 1979
constitution via part 11, section 7, sub section (1) ..5
However, the origin of Local government
councils in Nigeria was empowered through the 1976 local government reform.
When President Olusegun Obasanjo was the then Military Head of state, which
terminated in 1979. This is to say that 1979 and 1989 Federal Republic of
Nigeria constitution recognized local government as the third tier of
government and its function and role written in black and white. In the past
dispensation of the 5th republic, to the present Government, the
former President Olusegun Obasanjo was not pleased with the way and manner in
which the local governments were administered and consequently alleged
financial reckless amongst local government chairmen. That gave rise to a 28
men technical committee set up to determine the tenor and texture of local
government reform. This committee was inaugurated by president Obasanjo and the
ETSU at NUPE, Achaji Umane Ndayoko the head/chairman; its terms to reference
include the following.
1. To review the performance of local councils
within the past years and consider the desirability or otherwise of retaining
them as the third tier of government. In that regard consider, among other
option the adoption of a modified version of pre 1976 local government systems
of Nigeria.
2. To
examine the problems of inefficiency and high cost of government, with a view
to reducing costs and wastages in the three tiers of governments.
3. Examine
the high cost of electioneering campaign in the country and consider among
other options, the desirability of whether political parties, rather than
individual’s office seekers should canvass for votes in elections.
4. Consider
any other matters, which in the opinion of technical committees are germane to
the goal of efficient structure of government in Nigeria.
In anticipation of the technical committee to
determine the tenor and texture of reform of the councils, the People’s
Democratic Part (PDP) caucus suspended indefinitely the June 12, 2003, Local
Council Election pending the outcome of the 28-man Technical Committee
inaugurated in June 2003.
The 5th
republic government commenced without the democratic elected local government
chairmen. But rather, an appointed caretaker committee was set up by the state
government administration pending the conduct of such election. Other reasons
deduced by the government over the indefinite suspension of the local poll was
to have time to harmonized about 500 newly created councils since 1999, so that
the National Assembly shall make provisions for allocation of revenue to the
councils as prescribed by section 7(6) of the constitution.
However, this proposal emphasis on the sources
of revenue and Expenditure pattern of Local government councils in Nigeria. (A
study of local government council of
Delta State.) It was noted that within the period of 2000-2007, President
Olusegun Obasanjo did not really believed so much on the integrity,
transparency and accountability of the local government councils in Nigeria
especially during his regime as the 4th and 5th
republican President from May 29, 1999- may 29, 2007, the President have in so
many cases alleged mismanagement of resources and unjustifiable expenditure by
the third tier of government which most often gave rise to zero allocation.
This implies that the intently generated revenue (IGR) of the third tier of
government been grossly inadequate to enable the council perform its statutory
role efficiently.
1.2 STATEMENT OF PROBLEM
Despite the importance of sources of revenue
and expenditure pattern of Local government Councils in Nigeria. The councils
have not been abiding by the laid down regulations contained in the 1999
constitution of Nigeria. The officers associated with managing the resources
are said to creating unnecessary problems in the performance of their duties.
Most revenue collected is not receipted and unqualified personnel’s are engaged
in the services of collection and recording of revenue unbehalf of the local
government authorities in Nigeria. The research problem is to highlight the
inefficiencies and loopholes associated with the sources of revenue and
expenditure pattern of Local Government Councils in Nigeria. In addition,
financial irregularities and other economic crimes are said to be part of the
set back of local government councils in Nigeria.
1.3 OBJECTIVES OF THE STUDY
The objectives of the study are to reasonably ascertain
the following:
1. To
evaluate the sources of revenue and expenditure pattern of local government councils in Nigeria.
2. To
carry out a comparative study of such pattern and to see if there is any
variance amongst other local government councils.
3. To determines how effective is the
financial control of local government councils and to know the state of its
internal control measures.
4. To
identity other areas of assistance in which help is required and to know if the
finance and accounts records are kept appropriately.
1.4 RESEARCH QUESTIONS
The following research questions were formulated:
1. Has the expenditure of the sources of
revenue available to local government
produced a positive or negative impact?
2. Are
you aware that the survival of local government councils in Nigeria is in doubt without the
constitutional provision of revenue source?
3. In
what way are the internal control measures related to the council’s efficient
management of its resources/funds?
4. By
what means local government planned its revenue and expenditure?
1.5 STATEMENT OF HYPOTHESIS
HYPOTHESIS
I
Ho: There is positive impact on effective
expenditure of revenue available to
Local Government Council.
Hi: There is negative impact on effective
expenditure of revenue available to
Local Government Council.
HYPOTHESIS II
Ho: The survival of local
government councils in Nigeria is in doubt without the constitutional provision
of revenue sources.
Hi: The survival of local government councils in Nigeria is not in doubt
without the constitutional provision of revenue sources.
HYPOTHESIS III
Ho: There is a relationship between internal control measures and
efficient management of resources/funds
Hi: There is no relationship between internal control measures and
efficient management of resources/funds
HYPOTHESIS IV
Ho: Budgetary instrument is very vital to local
government councils in Nigeria.
Hi: Budgetary instrument is not very vital to
local government councils in Nigeria.
1.6 SIGNIFICANCE OF THE STUDY
The significance of this study is numerous and
very important both to government, corporate bodies and individuals.
1.
This study will reveal the importance and significance of local
government councils as the third tier of government in Nigeria.
2. It
will show the available sources of revenue and expenditure pattern and possible
areas of expanding the scope and operation of local government councils.
3. It
will access the internal control measures and determine how effective the
financial control in the public sector is.
4. The
study will highlight on the importance of budgetary with adherence of the
financial strategy to local government councils effective operation.
1.7 SCOPE AND LIMITATION
This proposal intends to critically analyze
the sources of revenue and expenditure pattern of local government councils in
Nigeria. Below were some of the constraints encountered.
1. RESPONDENTS ATTITUDE
Very
few respondents gave me audience in this regard. Most of the staff approached
was not co-operative in giving their view as required by the structured
questionnaire. Perhaps, the past clamor by the National house of assembly to
restructure/scrap the local government councils in Nigeria compounded the case
of free and unbiased response as long as local government issues are concern.
2. TIME
The time allocated to this proposal was
inadequate. Most institutions were on strike and the possibilities of using
their libraries were not available.
3. FINANCE
There is no doubt that finance was a major
constraint. Lately the removal of petroleum subsidy gave rise to increase in
transportation fare and subsequent economic activities such as high cost of
photocopying relevant materials.
1.8 DEFINITION OF TERMS
Below are some of the itemized definitions of
terms which will aid the user to apprehend some terminologies without ambiguity
or being biased in line with the context of this research topic.
Audit
alarm committee
This means a committee set up under a section of the law to prevent
irregular and illegal payments in the local government.
Federation
Accounts
This is the accounts to which is paid all revenue collected by the
government of the federation except the proceeds of the personal income tax in
respect of residents of the federal capital territory (FCT) and arm forces in
Nigeria.
Internal
auditor
This refers to an officer of the local government charged with the
responsibility of conduction internal audit of the management of the finance of
a local government council.
Revenue
collectors
This means person duly authorized to collect revenue and other monies
payable to the local government council.
Non
– statutory allocation
Non-statutory allocations are allocations not supported by legislation
like grants
Local
government
Refers to a local government council establishment under a section of
the law or constitution of the country
Treasure
This
means the head of local government finance and supplies department.
Vote
A
vote is the limit of authorized expenditure expressed in monetary terms.
Revenue
Earning Book
This is
the only means by which a local government council can officially acknowledges
the receipt of monies paid to it and the expression include carbon receipt
books, metal and plastic dishes and license forms.....================================================================
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