REVENUE AND FUND MANAGEMENT IN LOCAL GOVERNMENT SYSTEM IN NIGERIA

1.0 Introduction

1.1 Overview of the General Study

The genesis of a uniform local government system in Nigeria is traceable to the 1976 local government reform policy initiated by general Mohammed/Obasanjo's regime.

Prior to the afore said administration there was no uniform system of local government in Nigeria and policy formulation and decision making on matters relating to local government were primarily undertaken by the federal and state government.

These reforms involved the creation of seven hundred and fifty-nine (759) local government councils recognized as a third tier of government to streamline the administration and allocation of responsibilities in order to ensure that local government serve as a catalyst to Economic development at grass root level.

In 1989, in furtherance to reforms in the local government Administration, some autonomy were granted to local governments in Nigeria under the federal military government of Ibrahim Babangida. This administration equally promulgated decree N0 15, section 27 “ Basic Constitutional and Transitional provision” to fashion out the main functions of local governments, thus:

1. Formulation of Economic Planning and Development scheme for the local government.
2. Collection of rates and issuance of Radio and television license.
3. Establishment and maintenance of cemeteries, burial grounds and homes for the destitute.
4. Establishment, maintenances and regulation of slaughter houses, slaughter slabs, markets, motor parks and public conveniences.
5. Construction and maintenance of roads, street, street lights, parks, gardens, open spaces or such public facilities a may be prescribed from time to time by the Executive governor or House of Assembly of a state.
6. Provision and maintenance of public conveniences, sewage and refuse disposal, naming of roads, streets and numbering of houses.
7. Assessment of privately owned houses or tenants for the purposes of leaving such rates as may be prescribed by the Executive Governor or Horse of Assembly of state.
8. Licensing, regulation and control of sale of liquors.

Furthermore, in 1997 more local governments were created. In a bid to consolidate the federal governments efforts towards the realization of decentralization of authority a directive contained in the reform conferred powers on state governments to allocate funds to the local governments on the basis of equality and population.

This added incentive to the local governments with wide ranging responsibilities for local services delivery and the promotion of sustainable development, the prudent and efficient management of financial resources is a task that can not be overlooked at the risk of rural dwellers' dissatisfaction and disaffection especially now.

Now to achieve a sustainable economic development in the local level, the local government must ensure an improved revenue generation mechanism to generate more funds and to supplement the statutory allocations from federal government and state internally generated revenues.

Over the years, since inception as the third tier of government, local government's poor performance has been attributed to insufficiency of funds inspite of the statutory allocations form the federal account and state government.

This their call for efficiency in generating revenue so as to have enough fund to carat the responsibilities before the local government revenue generation in local government has to do with the generation of funds form available functional services, activities and ventures. This involves following strategies.

1. Establishment and identification of functional possible external and internal sources of revenue and available ventures.
2. There should be accountability, prudence and
3. Probity in funds management. The available possible sources of revenue and ventures have to be effectively and efficiently utilized.

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1.2 Statement of Problem

The importance of controlling the revenue of the local government can not be over emphasized. The problem is that the expenditure pattern for services in the local government could hardly be measured with the revenue or income. There is no gain saying of the fact that local governments in Nigeria are established for political, administrative and service provision purposes.

Then question that is yet to be answered is how has the local government been able to achieve the objective of it's inauguration, ensure smooth collection of money to boost its income it could be recalled that despite federal government efforts to facilitate economic development to the grass root level made any services change or improvement towards realizing the objectives due to misadministration.

Furthermore, problems faced by the local government authorities is in the local government officials and delay in bringing offenders to book will be looked into in order to minimize these problems. One other factor apart from inadequacy of fund is insufficient qualified personnel.

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1.3 Objective of the Study

The aim of this research is not only to present a present a project on Revenue of fund management in the local government in Nigeria but also to make the report of immense value to students and local government administrators alike.

Also to guide and advise the council in matters pertaining to the treasury and conduct of the council. It is on the evidence of this faulty function that this research study is initiated to find out the following;

1. To find out if there is smooth collection of the local government revenue.
2. To find out the mechanism of revenue generation in local government (Base constitutional and Transitional provision) decree.
3. To evaluate effectiveness and efficiency of local government in generating revenue internally.
4. To assess the effectiveness and efficiency in utilizing the acquired funds in relation to provision of services.
5. To find out if proper system of accounting is being maintained and various control and accountability in local government financial resources.

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1.4 Scope of the Study

As the topic suggest, this is the study of what is obtainable in Owerri Municipal Council, Imo State on which all findings and analysis are based. Owerri Municipal council was chosen in order to have a representation of average local government in Imo State. The only examines from a critical point of view the various ways put in for revenue generation system and management of fund with emphasis on Owerri Municipal Council.

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1.5 Statement of the Hypothesis

The following are relevant to the study and are being investigated.

Hypothesis 1

H1: Expenditure pattern for services in local Government can be measured with revenue/ income.

Hypothesis 11

H1: Fraud prevention is not possible in its local Government.

Hypothesis 111

H1: Revenue generation in local government can be faced with problems.

Hypothesis IV

H1: Rate avasion is a problem faced in the local government.

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1.6 Significant of the Study

The significant of this study is to:

1. Make a report of immense value to students and local government administrators.
2. Recommendation on how revenue generation can be improved upon to enable local government carryout its primary function of providing effective and functional social services to it's people.
3. Also, the public involved in paying rates and taxes to see how it is been utilized and accounted for. This will motivate the payers to pay as at when due to the local government.
4. Let the public know of the promotion of sustainable development, the prudent and efficient management of financial resources of the local government through services delivery.

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1.7 Limitation of the Study

The scope of this study is limited to the followings:

1. Some of the information required are confidential and posed a problem before I got them.
2. in the area of data collection, there is poor record keeping couple with the classified nature of government documents contributed to inadequate relevant information.
3. in the course of getting the materials used for this project, much time was spent.
4. The course of the research took a lot of energy and stressful too.
5. There is also, a high commitment of fund in the field work. Such as high cost of printing to materials, high cost of transportation to mention but a few.

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1.8 Definition of Terms

Revenue:

This is an inflow of money or other representations of value in return for selling goods or providing some type of services.

Fraud:

This is the use of deception to obtain an unjust or legal financial advantage.

Allotment:

Subdivision of allocations into time elements.

Government Grant:

This is the allocation (Revenue) Act by which both federal and state governments supplement local government revenue.

Fees and Charges:

These are revenue yielding to local government property. An example pf this is fee from market stall.

Accounting Policy:

The general principles and procedures under which accounts of an individual organization are kept.

Receipts:

This is an issue of written acknowledgements of anything received.

Allocation:

Appropriations by agencies, programme and classes of expenditure.

Budgeting:

This is a conscious and systematic Allocation of resources prepared I advance, relating to a future period and based on a forecast of key variables adopted to achieve certain policy objectives which may or may not set explicitly defined performance target for the achievement of objectives to anticipated revenue and forms the basis against which actual expenditure and revenue can be measured and controlled.

Expenditure:

Out flow of resources or the incurring of obligations for goods and services required to generate fund.

Resource Management:

This is a process on planning, organizing, staffing, directing and controlling using the “means” available to the organization.

Appropriations:

These are accounts or sums set out or provided in the budget for specific papoose.

Auditing:

This is an independent Examination of an expression or opinion on the financial statement of an enterprise by an appointed auditor in pursuance of that appointment and in compliance with any relevant statutory obligation.