EXAMINE LOCAL GOVERNMENT ACCOUNTING IN NIGERIA AND TO ANALYZE THE VIABLE FINANCING OPTIONS CURRENTLY AVAILABLE TO LOCAL GOVERNMENT COUNCILS

CHAPTER ONE:

INTRODUCTION

1.1 Background of the study

Local governments are the third tier administrative structure created in Nigeria to decentralize governance, bring government closer to the people at the grassroots and render social services Agba, (2013) pivotal in engendering national development. They are purposefully located and responsible for the governance of about 70 percent of the estimated 152 million people of the Nigerian population. Thus, they are said to be in a vintage position to aggregate and articulate the needs of the majority of Nigerians and facilitate rural development through the application of the needed financial and human resources in their operations. Generally speaking, from 1999 till date, local government operations and performance presents an enigma in terms of justifying the reason for their creation. The demands and expectations from local government councils over the years or within the period under review have been on the increase while the finance required to deliver the dividend of democracy and good administration at the grassroots continue to dwindle, inadequate, mismanaged and misappropriated. Local government administration in Nigeria have been characterized by bazaar mentality, poor accounting systems, unavailability of reliable data required for planning, over politicization, inadequate finance and poor revenue collection, greed, unnecessary government interference, lack of direction and corruption.

The statutory allocations from the Federation Account because of poor management are said to be inadequate to cover the financial obligations of local government councils in terms staff salaries, social services and serving of debts. This shows that finance is vital to the affairs of both public and private organizations to enhance good governance; it involves plan and control of financial resources as a separate activity. Acknowledging this, Adedokun (2014) notes: Finance is like a thread that runs round the cloth. If the thread is pulled, wrongly at one end, it will affect the design of the cloth and destroy its beauty. That is finance. It must be handled with care. It must be disbursed absolutely according to the financial regulations. One area which has remained neglected over time by the local governments in Nigeria is revenue generation. The usual practice in this country (Nigeria) is that political parties and individual candidates often make promises to the electorate during electioneering campaigns without being explicit on how they intend to finance such programmes. In line with this practice, candidates seeking political offices often unfurl vote-catching programmes with scarcely any attention to the question of funding (King, 2015). The result is that ordinary citizens may witness very little government activities and the impact of the government will be felt in almost all sphere. This may lead to disappointment. It is quite obvious that very little thought, if any, is given to how funds were to be generated to implement the vanous programmes promised to the electorates.