1.0 Introduction
1.1 Background Of The Study
Mainly local government are created to perform certain function mostly of the grassroots level by structure and composition they are regarded as they vital machinery for rural transportation and for the provision. Certain essential social services to the people in the area in which social services to the people I the area in which they operate and in accordance with national polices. There character distinguished local government from other tires of government namely:
- Proximity to the people
- Responsiveness operation.
- Simplicity of operation.
From the forgoing a local government according to the Federal Government guidelines for Local government reforms. Of 1976 can be defined as government at the local level exercise through representative councils established by law to exercise specific power within defined areas. These powers should give the council substantial and power to initials and direct the provision of services.
Stated briefly, local government perform protective, assistance services, proprietary and development and other functions that may be assigned to them from times to time by the authority establishing them.
Also the 1976 local government edict and the 1976 constitution of the federal republic of Nigeria were not left out in the establishment of local government and its functions and responsibilities. This is situated on section 2(1) of the 1979 constitution which guaranteed the effectiveness and efficiency to location government and as such granted the local government states o a third tier system of government to make them perform effectively and efficiently as agree of local democracy and local development.
It also granted them power to strength powers. Their revenue allocation act of 1981 provided for the federal and state government to contribute 10% of their actual revenue to local governments following the recommendations of Dasutin committee on local government reforms, the statutory allocation of local government was increased 15% addition to contributing 5% of their revenue to a loan, Bank. To enhance the process of planning, local governments were also incorporated into the states. Economics planning boards.
Further more by the Babangida Administration also led to the allocation of 20% of the federal Account to local government in addition to granting them more power to sources revenue through taxation and grant in aid from the factual and state government.
1.2 History Of Case Study / Ezinihitte L.G.A
The ezinihitte local government is one of these local governments created in 1976, however, two local government have been excised from it since creation and they are Aboh Mbaise and Ahiazu mbaise local government council.
However, following the Imo State Low on local government creation of 2003 empowering the legislatures to create more local governments in the state, ezinhitte Mbaise Local government was created presently, Ezinihtte Mbaise Local government is bounded on the worth by Ahiazu and Ikeduru Local Government area on the North West and South West by Ngor Okpala and Owerri North Local government Area and East they local government are in Imo State and Isiala Ngwa South Local governmental area in Abia state.
With an area of about 190 square Kulometres and a projected population of 478, 548 as at 2006 population census Ezinihitte local government is governed by a council made up of the chairman, vice chairman, the Ezinihitte local government area is made up of Autonomous communities namely in Onicha Nioc-Orie, Ezindo I, Eziudo 2, Amumara, Obizi, ife n' Owutu, Umueze, chokoneze, itu, Okpoofe Ezebuoguu, Ihitte Udoh, Umuoma Akpodim and Uvuru
1.3 Statement of the Problem
Over the years, there has been a lot of controversies as regards the poor performance of local government in the country while some view that dismal performance of local authorities as being the direct outcome of lack of finance and low revenue capacity others have also argued that the problem of manpower necessary for effective management of resources.
It has been argued that most local councils especially in rural area rely on the statutory allocation as their main source of income.
They are viewed as not being viable in the sense that they cannot generate revenue internally to enable then executes some of their projects and polices. The revenue yielding machinery and the system or revenue collection abilities of qualified manpower, lack of public enlightenment, problem of political party settlement by the members over ambitions and corrupt revenue officer in addition to the other factors.
In some case there has been lack of proper planning and budgeting which would not operate sound financial system. The above finance, as there are no appropriate procedures to collect, revenue from the various source revenue goes into private products instead of confers of the government. The question therefore, remains what are the appropriate ways to increase local government revenue besides the period statutory allocation form the federal government and toward extent has lack on planning affected the finance and performance of local government.
1.4 Purpose Of The Study
This study examines past present development system of the financing of local government level especially those in the rural areas as well as the financial relations existing between the federal and state government on the one hand and state government on the one hand and local councils on the other hand.
It also examines how these financial and fiscal relations affect the finance and performances of local government. The revenue generation capacities of local government are also fully taken into consideration as well as the various way of enhancing the financing of local government in the country.
This has become so obvious in view of finance the changing patterns of local government finance and the increase responsibilities imposed on them by the federal and state government. Specifically, Ezinihitte local government in Imo State is chosen as a case study since to a reasonable extent, it picture the financial problem encountered by councils in the rural area.
1.5 Relevant Research Question
The purpose of any local government area as a third tier of government is to alleviates, encourage and see to the welfare of its citizenry as well as enhancing the economic growth and development.
To achieve all the goals, it must involve financing or revenue. Now the question that comes to our minds is how to achievement of the above stated goals. To arrive at the truth of this research work the following questions cannot be avoided.
- What is responsible for miss-management and poor acceptability in the present day local government?
- What hinders proper execution of development project in the local government?
1.6 Scope Of The Study
This study is quite a broad one though there are seven hundred and seventy four local government are in Nigeria and twenty seven local government in Imo State, three local / governments in Mbaise.
There are many aspects that could have been accommodated under the study but the scope of this study will be limited and centered on the financial management and accountability in the local government (A case study of ezinihitte Local Government).
It will also probe on the sources and uses off local governments funds its accountability and the effects of the management of the funds towards enhancing the laving standard of people of the local governments.
1.7 Significance Of The Study
The study is being carried out by researches because of the added responsibility to local government and roles in national and rural developments, all of which have brought in to the focus the state of their finance.
The recent reforms of local government have made a study such as more necessary than evenbefore. The changing roles of local council from service oriented to development oriented agencies has made it inevitable for their finance systems to be overhead in order to enchance their revenues capacity as planning, budgeting procedures and style of managements local councils also serve as agents rural areas transformation of standard off living of other social amenities. This makes questions on the financial system highly inevitable.
1.8 The Limitation Of The Study
A lot of difficulties were encountered in the course of collecting information and data for the study. The constraints include:
The short period of time within which the study was carried out as finance lack of past record and vital statistics attitude of respondents and unwillingness of the past of government official to release some official documents.
All these hampered the availability of certain information that would have helped the researcher in the study.
1.9 Definition Of Term
Financial management is that managerial which is concerned with the planning and controlling of the forms financial resources. It deal with planning and control of a firms undershirt financial objectives, the company finance is based on the presupposition that the objectives of management is to maximize the market value of a company. And also for the financial management to maximize shareholders wealth.
The finance function is to ensure that firms resources are managed in order to achieve the financial objectives of they firms. The functions are:
- Financing decision
- Investment decision
We mean the process where by a firm identified log-term assets and writing capital needs. After a project is evaluated and accepted as worth while the next step is to decide on how the finance management, responsibility to determine the source from which funds will be raised for satisfying the working capital needs of his firm. Working requirements of a firm also concern the finance manager working capital management involves the planning and control of current assets and current liabilities.
