The Accounting Systems In Local Government (A Case Study Of Obingwa Local Government Area Abia State)

The Accounting Systems In Local Government (A Case Study Of Obingwa Local Government Area Abia State)

First Part

Introduction

1.1 Background Of Study

Local government became a third tier of government as a result of the nationwide local government reform implemented in accordance with the constitution of 1999. However, the constitution of 1999 granted it full legal recognition, and since then it has increased grassroots participation in local government and expanded the responsibilities and roles of local government officials.

The functions of the local government council as outlined in section 7 of the fourth schedule of the 1999 constitution of the federal republic of Nigeria are as follows:

a) The economic development of the state, especially insofar as the affairs of the council and the state are affected by the said commission or body’s recommendations.

b) Collection of fees and licenses for radio and television

c) Establishment and upkeep of centuries-old cemeteries and residences for the destination or business.

d) Bicycle, truck (other than mechanically propelled vehicles), canoe, wheelbarrow, and automobile licensing.

e) Establish, maintain, and regulate slaughterhouses, slaughter slabs, markets, parking lots, and public areas.

f) Construction and maintenance of roads, streets, street lighting, sewers, and other public highways, parks, gardens, open spaces, and other public facilities as prescribed by the state legislature.

g) Naming of highways and streets, as well as house numbering.

h) The provision and maintenance of public sewers and garbage disposal.

i) Registration of each and every birth, burial, and marriage.

j) Assessment of privately owned housing or tenants for the purpose of leaving at rates prescribed by a state’s house of representatives.

k) Management and administration of:

i. Out-door advertising and hoarding

ii. the transport and maintenance of all types of canines.

iii. Shops and Kiosks

Restaurants and bakeries are the locations for food sales to the general public.

v. Authorization and

vi. licensing, regulation, and oversight of beverage sellers.

2.A local government’s responsibilities include participation in the administration of a state with regard to the following matters:

a) The maintenance and provision of primary, adult, and vocational education.

b) The development of Agriculture and other national resources besides the mining of minerals.

c) The delivery and upkeep of health services, and

d) Any additional responsibilities delegated to a local government council by the state legislature.

e) The objective of establishing local government will be achieved, resulting in the socioeconomic development of the local government population. Install a suitable accounting system to manage both the extant and newly created revenue basis. This accounting system should be able to guarantee that local government revenues and expenditures are accurately recorded.

1.2 Description Of The Problem

The primary objective of this study is to examine the weaknesses and limitations that may exist in the accounting system of local governments in Nigeria, with specific reference to Obingwa local government. Scholars have criticized the Nigeria local government accounting system due to the system’s inherent flaws, necessitating a study of this nature to assess these flaws and emphasize their consequential effects on the financial statements of local governments in Nigeria.

In addition, there is currently a problem with a financial statement that accurately reflects the financial position of the Nigerian local government.

Thirdly, irregularities in the treatment of expenses and other items, such as the classification of capital expenditures as operating expenditures. Other irregularities include the use of the cash basis of accounting rather than the rational accrual basis, which is simpler and more practical to operate. Others include disjointed descriptions of accounting terms and incorrect classification of balance items or what is known as the local government’s statement of affairs. Due to the aforementioned irregularities, the local government’s financial statement is highly misleading. These financial statements conceal the inefficiency of the individuals entrusted with the local government’s resources.

This research was inspired by the need to guarantee proper public accountability, particularly at the local level of government.

1.3 Objective Of The Research

This investigation will evaluate the local government’s accounting system to ensure compliance with the National Association of State Boards of Accountancy (NASB) etc.

Internal control is performed or applied in order to eliminate errors and possible fraud, and then to suggest methods to improve the operation of the system.

1.4 Research Question

The following research queries were posed based on the aforementioned objectives, which this study is designed to achieve:

Does the accounting system of local government (using Obingwa local government as an example) permit the preparation of financial statements that accurately reflect the local government’s financial position?

Is the local government accounting system (with specific reference to Obingwa local government) adequate for design?

Is the accounting system of local governments (using Obingwa local government as an example) operationally efficient?

1.5 Importance of the Research

The significance of the study is that it will aid in the improvement of the accounting procedures and systems in use in the Obingwa Local Government Area of Abia State and possibly other local governments with similar characteristics in the compilation of their accounting information and statements.

1.6 Scope Of The Examination

This investigation is limited to Obinagu Local Government, Abi State, Nigeria, and its accounting systems.

1.7 Limitation Of The Study

The primary limitation of this study is time, as the researcher had limited time to conduct this research. In addition, financial constraints and language barriers were also significant factors that limited the scope of this study.

1.8 Methodology Of Research

The journals of account of the Obinagu local government were thoroughly examined. This would be extremely uncommon if proper records were kept, accounting standards were adhered to as they pertain to local government, and management policies and accounting conventions were adhered to. In order to prove the veracity of the findings and their flaws, questionnaires were also sent to staff members of varying ranks. Additionally, interviews with senior officers were conducted. This is a request for more information regarding the local government’s accounting system and procedures. In addition, accounting textbooks, journals, and other publications from professional accounting organizations were consulted.

All of the preceding information was analyzed critically to reach the conclusion.