ABSTRACT
This research work examined the source of revenue and expenditure
pattern of internally generated revenue in Obowo local government area of Imo
State. The specific objectives were to find the effectiveness of the revenue
collection pattern and the subsequent judicious use of the generated revenue. A
descriptive analytical survey was adopted on a sampled size of 120 with the use
of questionnaire instrument in data collection. Data collected were analyzed
with frequency table and percentage while the hypothesis formulated in the
study were tested with Chi-Square measure (X2), the result of the
analysis showed that the infrastructural development in the local government is
subsequent of the internally generated revenue. The researcher concluded that
the major issue confronting the utilization of local government revenue
originates from electing corrupt and unqualified personnel who lack knowledge
and skill on effective leadership and recommends that the electoral body should
conduct a free and fair election to usher in leaders who can effectively
utilize internally generated revenue in the development of the local
government.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Local government from its inception in the colonial
era to the present time has played significant roles in the socio-political and
economic life of the colonial administration to a recognized third tier of
government in Nigeria. The local government in Nigeria has suffered a lot of
negligence but the most pressing problem is the non-utilization of the
Internally Generating Revenue (IGR). The fund at times is been misused, high
jacked or diverted by the leaders thereby rendering the local government council
bankrupt. Under development has been a major factor hindering third world
countries in achieving sustainable development. According to Rodney (1972),
underdevelopment does not necessary mean absence of development. It does not
also mean that it is characterized by untransformed economic, political and
social structures. It is more or less a condition of relatively low level of
development, a situation in which the necessary qualitative social
transformation has not yet taken place.
Achieving human development is linked to a third world perspective of
development which views it as freeing people from obstacles that affect their
ability to develop their own lives and communities. Development therefore is
empowerment. It is about local people taking control of their own lives,
expressing their own demands and finding their own solutions to their problem.
No wonder Arvind and Evereth (1989) refer to development as a widely
participatory process of directed social change in society intended to bring
about social and material advancement, including greater freedom, equality and
other valued qualities for the majority of the people through their gaining
greater control over their environment. Development can only be said to be
effective if it is focused on human capital development and the introduction of
new ideas to foster social change. Rogers (1967) argued that development
involves among other things, a type of social change in which new ideas are
introduced into a social system in order to produce higher results or output
through more modern social organization”. Development cannot take place in the
absence of capital; capital comes in form of revenue allocation or statutory
allocation from the federal and state government.
1.2 STATEMENT OF PROBLEM
Despite the importance of sources of revenue and
expenditure pattern of Local Government Councils in Nigeria; the councils have
not been abiding by the laid down regulations contained in the 1999
constitution of Nigeria. Most revenue collected is not receipted and
unqualified personnel are engaged in the services of collection and recording
of revenue on behalf of the local government authorities in Nigeria. The
research problem is to highlight the inefficiencies and loopholes associated
with the sources of revenue and expenditure pattern of Local Government
Councils in Nigeria. In addition, financial irregularities and other economic
crimes are said to be part of the set back of local government councils in
Nigeria.
1.3 OBJECTIVES OF THE STUDY
The broad objective of this study is to investigate
the source of revenue and expenditure pattern of local government councils in
Nigeria, with focus on Obowo L.G.A of Imo State. The specific objectives of the
study are to reasonably ascertain the following:
1.
To carry out a
comparative study of pattern of expenditure and to see if there is any variance
amongst other local government councils.
2.
To determines
how effective is the financial control of local government councils and to know
the state of its internal control measures.
3.
To identity
other areas of assistance in which help is required and to know if the finance
and accounts records are kept appropriately.
1.4 RESEARCH QUESTIONS
The
following research questions were formulated:
1.
What is the
difference between the expenditure pattern of this local government and other
local governments around it?
2.
What are the
measures implemented by the government towards effective financial control?
3.
Are the
strategies effective enough to bring about the proposed objective?
4.
In which other
way can the local government be assisted in terms of generation of revenue?
5.
Are the
financial records of the local government council properly kept for
accountability purposes?
1.5 RESEARCH HYPOTHESIS
HYPOTHESIS I
Ho: There is positive impact on effective
expenditure of revenue available to Obowo Local Government Council.
Hi: There is negative impact on effective
expenditure of revenue available to Obowo Local Government Council.
1.6 SIGNIFICANCE OF THE STUDY
The significance of this study is numerous and very
important both to government, corporate bodies and individuals.
This study will reveal the importance and
significance of local government councils as the third tier of government in
Nigeria.
It will show the available sources of revenue and
expenditure pattern and possible areas of expanding the scope and operation of
local government councils.
It will access the internal control measures and
determine how effective the financial control in the public sector is.
The study will highlight on the importance of
budgetary with adherence of the financial strategy to local government councils
effective operation.
1.7 SCOPE OF THE STUDY
This proposal intends to critically analyze the
sources of revenue and expenditure pattern of local government councils in
Nigeria. (A study of Obowo Local Government Council of Imo State).
1.8 LIMITATIONS OF THE STUDY
Respondents
Attitude: Very few respondents
gave me audience in this regard. Most of the staff approached was not
co-operative in giving their view as required by the structured questionnaire.
Time: The time allocated to this proposal was inadequate.
Most institutions were on strike and the possibilities of using their libraries
were not available.
Finance: There is no doubt that finance was a major constraint.
Lately the removal of petroleum subsidy gave rise to increase in transportation
fare and subsequent economic activities such as high cost of photocopying
relevant materials.
1.9 DEFINITION OF TERMS
Below are some of the itemized definitions of terms
which will aid the user to apprehend some terminologies without ambiguity or
being biased in line with the context of this research topic.
Audit Alarm
Committee: This means a committee
set up under a section of the law to prevent irregular and illegal payments in
the local government.
Federation
Accounts: This is the accounts to
which is paid all revenue collected by the government of the federation except
the proceeds of the personal income tax in respect of residents of the federal
capital territory (FCT) and arm forces in Nigeria.
Internal
Auditor: This refers to an
officer of the local government charged with the responsibility of conduction
internal audit of the management of the finance of a local government council.
Local
Government: Refers to a local
government council establishment under a section of the law or constitution of
the country.
Revenue
Collectors: This means person duly
authorized to collect revenue and other monies payable to the local government
council.
Non–Statutory
Allocation: Non-statutory
allocations are allocations not supported by legislation like grants
Vote: A
vote is the limit of authorized expenditure expressed in monetary terms.
Revenue Earning
Book: This is the only means
by which a local government council can officially acknowledges the receipt of
monies paid to it and the expression include carbon receipt books, metal and
plastic dishes and license forms.