CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the study
This research investigation falls within the area of internal auditing in Enugu North local Government area. Internal Auditing is an audit function which is being used by local governments as a part of its overall system of internal control. Such auditing is carried out by local government employees who are responsible to local government management. The activities of internal auditors were originally intended to verify secrecy and dependability of the accounting systems, data and information, but currently they are operating in non-accounting functions, verifying local government operation and efficiency. From the foregoing, internal auditing is therefore, a day to day verification process, which operates continuously throughout the local government financial year. According to Akanyanwu (1990) internal auditing is “The independent appraisal within a local government of the accounting, financial and all other operations as a basis for protective and advisory services to management”. The new civil service move with designed to made the service more functional, professional, productive and responsive to the socioeconomic needs of the nation. The federal government has also recently revamped and restructure the local government system to enable it perform its role of promoting, co-ordinating and implementing community services, enhancing citizens participation and maximizing the use of local resources. Enormous amount of money if flowing to the local government from the federation accounts (20%), the 10% if the state internally generated revenue and the revenue of the local government.
The federal government of Nigeria came up with a financial instruction in 1979 instructing all local government to set up internal audit unit in each local government. But the behavior and attitude of operation of local government system resulted in many local governments not setting up internal audit units or if set up, they were not functional. The federal government in 1988 set in motion a real wave of change. A real frame work of internal auditing in the local government was spelt out in order to make it less difficult for management of the local government to have perfect control of the activities of staff of the local government as the greatest contributing factor to the poor performances of the local governments. Local government forms the third tie of government in Nigeria; in Nigeria so to say we have the federal government at the apex, the state government at the middle and local government at the bottom. Local government was created to help in catering for the rural populace. Its operations include the provision of same social amenities, such as cottage hospitals, rural roads, and bridges, management of primary schools that is before now. At the head of affairs in each local government is the chief executive of the local government who is referred to as the local government chairman. We also have the legislators of the local government who were elected in various wards. The local government administration has the chairman at top of affairs, followed by his deputy, and then come the secretary, the personnel executive officer (PEO), the treasurer and the internal auditor. The internal auditor reports to the auditor general of the state through the executive chairman of the local government.
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