Problems And Prospects Of Local Government Finance/accounting In Nigeria (a Case Study Of Nsukka Local Government Area

In the course of carrying out this study, the following objectives among others were set which included.  The identification of major causes of maladies in the financial system of the local government; to examine the accounting department, to find out if it is manned by competent and qualified personnel, to examine whether the sources of income to the local government finances, to examine the various problems of the local government finances and accounts and to examine the prospects of improving the available sources of the local government finances.

To achieve the set objectives, some hypotheses were formulated which comprised: an increase in local government share of federation account from 20-25% would help local governments in achieving at least 75% of their statutory responsibilities, the employment of low caliber staff has a significant negative relationship with the low efficiency and productivity of local governments, the Accounting system of local government is not effective in operation and that another source of tax revenue is not essential for Nigerian Local Governments.

Two broad research methods were adopted in this study which were personal interviews and fully designed and well-structured questionnaires.  For the purposes of analyzing the hypotheses, chi-square (x2) technique was adopted.

As a result of conscientious and of course painstaking study done, a lot of findings were made which included inter-alia, there was an ample proof that the greater number of local government’s employees are unqualified.  Other taxes to be collected by the local governments can improve its financial base, the employment of low caliber staff has no significant negative relationship with the low efficiency and productivity of the local government; and increase, from 20 – 25% in the Federal Government Statutory Allocation of federation account would not be enough to detray a reasonable proportion of such responsibilities, embezzlement, receipt of huge kick-backs, contract inflations, large scale salary, fraud, auditing and internal control problems were discovered as some of the major accounting and financial problems of the local governments.

As a result, the following recommendations were proffered:  efforts to be intensified in the collection of revenue and continuously seek new avenues for local taxations, emphasis to be placed on the recruitment of qualified, experienced and well-trained personnel for the assessment, collection and general administration of local taxes and rates, design a sound system of budgetary control, installation of a system of internal control, projects to be evaluated and implemented, proper feasibility study to be carried out; and internal funding to be improved by its engagement in commercial ventures.

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