CHAPTER ONE
- INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Financial management constitutes the most crucial and central aspect in the administrative process of the local government system. This is due largely to the fact that finance determines the amount of services, development and quality and quantity of personnel provided by the local government.
However, the amount of revenue available to the local government and it’s accountability makes for efficient and effective local government system. Financial and it’s management is a sensitive area in government, and it’s strictly governed and guided by elaborate rules, regulation and guideline. Apparently, budgeting is the central activity in financial management, it includes the financial plan systematically designed showing details of the governments anticipated revenue and expenditure for a fixed period of time, which forms the basic and guide of government activities during the period.
Greater emphasis is always placed on the financial management, as the pedestal machinery for development and total governance in the local government administration. It equally in skills a level of financial display on the leadership execution and performance evolution. Furthermore, it is believed that financial management held’s the prospect of creating many opportunities, full exploitation of revenue sources available within the local government area. This can subsequently create for mobilization and expansion of commercial activities. In addition and embezzlement associated with the local government system.
Equally, financial management induces the demand for policy, which makes for prudent spending, economy in the application of funds and avoidance of waste.
Ideally the prospect of financial management helps prevent deficit and create for documentary foundation to question the wisdom and justify the revenue and expenditure in the planning and policy adjustment in local government.
Ardently, there exist problems, which are associated with financial management in the local government systems. These problems which are wide in scope and complex in nature, but relative to the diverse local government areas. Actually, the local government requires huge financial resources I order to provide it’s finances, amplifies their problems. Thus, the low internal revenue generation in our government appears to be a very wide problem, which consistency leads to deficit spending in their state of affairs. It is dear that almost every local, government system possess weak financial base. The financial departments of many local governments are adequately stated with qualified and experienced financial managers, accounts, auditors and property valuation officers who would apply their skills and initiatives to develop plans and strategies which would help them harvest and exploit fully and effectively the internal revenue sources. These indispensable, for efficient financial management, which are lacking in the local government have reduced the revenue generation capacities of the local government. It is also observed that the financial management of our local government of our local government system is grossly indicated and fraudulent abuse of priorities is a rampant practice. While public accountability is not taking seriously in the local government, local government accounts are not regularly audited to ensure financial discipline within financial memorandum and the prudent management of available funds.