A CRITICAL EVALUATION OF NIGERIA LOCAL GOVERNMENT ACCOUNTING AND PROCEDURES

A CRITICAL EVALUATION OF NIGERIA LOCAL GOVERNMENTACCOUNTING AND PROCEDURES (A CASE STUDY OF ABOMBAISE L.G.A. IMO STATE

ABSTRACT

Every government accounting and financial reporting procedures aimed at communicating information relevant to decision making and demonstration of accountability convening the entrusted resources by reporting government to the users. The evaluation of the study was able to come up with facts that the qualified accountants in the economy know little or nothing about the government accounting system. But today, there is a general awareness of the need to pay greater attention to the development of government accounting and financial reporting procedures, the government in most nations constitutes the greater simple business entity. The responses to the researcher question were analyzed and interpreted. Two hypothesis were formed and tested at 5% level of significant using Chi-square (x²) method. Moreover, the findings reveal the need for objective of financial reporting procedure by our local government as a means of providing effective system to safeguard their resources; it also illustrated that in moving from simple display of each receipts and disbursement to summarize financial reporting procedures which incorporated performance measures. Some of the objectives of financial report were met. It is very easy for corruption of overwhelming the best accounting system in drawing the conclusion; further effort in this area of study is encouraged. And the following chances are in particular recommendation, employing professional qualified accountants to prepare the account of local government and finally, the local government accounting and financial reporting should be audited every year.

mendation, employing professional qualified accountants to prepare the account of local government and finally, the local government accounting and financial reporting should be audited every year.

CHAPTER ONE

  • BACKGROUND OF THE STUDY

Local government accounting can be described as the composite activities of collecting, analyzing, recording, summarizing, reporting, communicating and interpreting in monetary terms the financial transaction of the third tier of government. The reporting procedure is to the interest parties who will need them for decision on accounting principles and requirement to be followed by the government ministerial departments through issuance of treasury circulars and he revised financial regulation 1996.

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Financial reporting is a means by which the reporting authority demonstrates propriety and conforming to the rules given evidence of accounting for the stewardship of government resources and to provide useful information for the good control and efficient management of government operation.

Thus, a significant inter-dependence exists between accounting and financial reporting procedures. This involves financial information presented in budgets, fiscal plan and estimate of expenditure. The report must be understandable, complete and contain up to date measure of values, reliable and relevant to the users information needs. These qualities of financial report can only be achieved if there is improvement in local government accounting system.

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Considering the increasing roles that local government is expected to play under the new arrangement, their work range of power, responsibilities and huge amount of financial resources, this research work has to take a critical evaluation or reporting procedure/ systems that are used to safeguard these resources using Mbaise Local Government Area as a case study

Information of the case study Mbaise Local Government Area sources of fund includes:

  1. The federation account allocation.
  2. The state government allocation.
  • Internally government general revenue from conceit respective revenue body.

Aboh Mbaise L.G.A is one of the three (3) L.G.A in Imo state and one of the largest local government areas in the state.

The government is made up of sixteen (16) autonomous communities which includes; Umuhu, Lagwa, Ibekwu, Umulokwo, Nguru Nwankwo, Ngwuru Nwaore, Eyiogugu, Umuogaragu, Umuelem, Ibutu Nwa Ngwo, Ibutu Nwaore, Amawo, Uvuru, Amuzu, and Larji. The local population were estimated with projection assume to be 94763 in 2006. The local government rapidly developing industrially, economically and socially.

They have sixty four primary schools and every community in the area has at least two (2) secondary schools. There is a branch of institution which is permanently site of Imo state university and it has one general hospital in the local government headquarters’, many health centers in the area, multi-purpose chemist and many private hospitals to complement the efforts of the government hospitals and health centers. It also has a judiciary court in the local government area.

1.2  STATEMENT OF PROBLEMS

Aboh Mbaise Local Government is one of the local government  that are affected by inadequate funds or finance, funds are inadequate for proper execution of the local government policies and programmes and has affected the delivery of some essential services such as refuse disposal and timely or prompt payment of staff salaries in the council.

There is also inadequacy of personnel in the local government council more especially the skilled personnel and this has adversely affected the performance of the local government in Aboh Mbaise.

Again, there is no proper accounting system in the local government council.

  • PURPOSE OF THE STUDY

This is aim at studying the efficiency and effectiveness of accounting and financial reporting procedure in Aboh Mbaise local government area of Imo state. It addressed itself to the problems facing local government accounting and financial reporting procedure as a case study of Aboh Mbaise local government area.

Specially, this research is intended to:

  1. Evaluate the overall financial reporting pattern prevalent in our local government area.
  2. Make proper suggestion on how to improve the quantitative and qualitative characteristic of local government financial report procedure.
  • Bring an awareness of the concept of accountability and emphasizes its usefulness in our government authorities at the local government level.
    • SIGNIFICANCE OF THE STUDY
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The study will therefore be of significant interest to the senior financial officers in preparing government financial reports because it addressed on the fundamental under pining of local government financial reporting procedure. The research will equally assist the administrators to appreciate and acknowledge the importance of the maintenance of reliable and up to date of accounts, financial and statistics. They provides the data so necessary to ensure that no problem arise in evaluating the financial soundness of local government of polling changes are clearly and comprehensively define and discussion are based on sound financial premises.

  • RESEARCH QUESTIONS

The study seeks to find answers to the under listed research questions.

  1.   What basis of accounting does your department            use in recording of their daily financial transaction?
  2. Does the use of cash basis of account used by most local government comply with the standard requires in government accounting system.
  3. Do you think private sector accounting can be successfully applied in the local government?
  4. Among all the entire various financial reporting models, which one do you recommend for used in our local government?
  5. What would you say concerning the adequacy of the present financial relationship existing between the local governments?

1.6   RESEARCH HYPOTHESIS

As a result for the need to have some guiding principle throughout his research work, it becomes necessary to formulate the following hypothesis statement to be accepted or rejected before conclusion of the work.

This, therefore, calls for the use and test of hypothesis which includes;

HYPOTHESIS ONE:

HO:  Cash basis of accounting receipts and expenditure used by local government are not able to meet the objective of government account and financial reporting procedure.

HA:  Cash basis of accounting receipts and expenditure, used by local government are able to meet the objective of government accounting and financial reporting procedures.

HYPOTHESIS TWO:

HO:  Aboh Mbaise local government does not have competent accounting staff at their disposal.

Ha: Aboh Mbaise local Government does not have competent accounting staff at their disposal

  • SCOPE OF THE STUDY

This work will be limited to accounting and financial repent procedures, which is the major problems in Aboh Mbaise local Government area of Imo state. The main focus will be the problem of accounting and financial reporting and solution to tackle this problem

  • LIMITATION OF THE STUDY

The scope of this study is limited by certain factors and they are as follows:

  1. Time availability: there are constraints of time. There is no time if compared with the mmeh of the department activities and engagement in hand
  2. Finance: the money available is not enough when compared with the cost of information gathered.
  3. Transportation: considering the transport cost in Nigeria a recently it was not easy for me to transport other local government to get more information.
    • DEFINITION OF TERMS
  1. Financial memoranda: A document issued by the federal republic of Nigeria and commission in accordance with section 93(1) of edit it is essential for better control and management of finance business of local government in the state.
  2. Financial Regulation: This is a body of rules, guidelines and regulation issued by the federal government from time to serve as codes of regulation on certain specific matters with a view of throwing light on government position there on and ensuring accountability, prevention of abuse mis appropriation of government funds.
  3. Edit: An official order or statement given by the somebody in authority.
  4. Local Government: This is a tier of government that is responsible for the people at the local and grass root for providing services
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5   Treasury: A place where the records of public fund of the nation, state or local governments are kept. The head of treasury is variously called the treasury at the local      government level and the account general at the state level.

  1. Financial instruction: This is usually instruction given    concerning the usage or management of public funds.

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