The management of public resources has always been a turbulent issue. This is precisely the heart of any governmental administration. Government business in whatever for, be it policies, programmes, activities or function is run in accordance with the laid down formalities. These formalities in the area of government accounting and financial control and procedures may include laws, rules and accepted norms certain financial memorandum of the local government system. The accounting framework regulates the account format for the preparation of government account in local government system in an instrument for introduction of new policies and guide lines, before inclusion into the financial regulation as a part of a more permanent code of regulation. It is used to aid the achievement of probity and accountability in government. The frameworks specify action acceptable and those doomed unacceptable. The system is set to ensure uniformly and conformity of application.
The peculiar nature of local government accounting transaction makes it desirable and indeed mandatory to treat it in accordance with specific, cohesive and standardize measurement such as the budgeting system and fiscal policy procedure. The local government financial framework measure all social activities with the control and stewardship of receipts, payment and related activities in the local government system in that the accounting system is maintained on cash basis. The system provides a satisfactory approach or matter of stewardship, accountability and cash programme accordingly. The balance sheet (known as monthly reconciliation of accounts surplus and deficit statement of local government) does not contain information on physical fixed assets, such as building. In local government accounting framework, specific registers are taken on payment basis for the purpose of controlling fixed assets, such registers are referred to as plant registers or inventory control. The system of accounting principles which is double entry book keeping. They system requirement is that every debit entry be matched with a corresponding credit entry of similar amount. In the accounting system, after the approval of annual budget, the letters of authority are communicated to head of department vote controllers. In local government, transaction is recorded when cash is paid or received irrespective of when goods were supplied or services rendered. Some of such records include department vote expenditure account. This record gives accurate account of goods ordered but not yet paid. Similarly, the registers of bills received or bills issued are kept to show at any time what the local government aspects to receive from its debtors. Some of the reasons why cash accounting is adopted in local government include;
1) It is a non-profit oriented organization.
2) It operates an annual estimate of revenue and expenditure which constitute of basis necessary to meet the estimated expenditure during the financial year concerned.
1.2 STATEMENT OF PROBLEMS
There are many or numerous reasons for appraising (checking) the financial framework. Among the major reasons for appraising the financial frame work include:
Misappropriation according to oxford advanced learners dictionary is simply “taking somebody or money or property for yourself especially when they have trusted you to take care of it”. This act is very common in most local government, where those “in-charge” use public funds for their personal motives. They sometimes tell a lie about the purpose they use the fund for by using the so called “shortcut” and diverting public money into their personal purpose.
This also is another problem encountered in checking the financial framework of local government. Funds are easily misused due to the fact that the financial record keeping are not enough and not also enough, hence a problem.
It is rare mostly in the local government to see someone who has the quality of being completely honest especially in terms of finance. They mostly use public funds for personal motives. Hence this call for checking the structure of the financial system. If the guidelines for the management of local government finances are not strictly observed chances are those misappropriations will happen. It is reasonable to conclude that there will likely be a state of financial recklessness in the local government in Nigeria; this phenomenon cannot be allowed to continue indefinitely without caution, control or application of appropriate sanctions. It is in this respect that the financial framework in Nigeria is issued by the ministry for the financial business of local government. Finance is like a thread that runs around a cloth if the thread is pulled wrongly at one end, it will affect the design of the cloth. This is to say that finance is to an organization as thread is to cloth. It must be disbursed in accordance with financial regulations.
1.3 OBJECTIVE OF THE STUDY
The intention is to reinforce the checks and balance in deliberate effort not only to enhance judicious utilization of public resources, but also to preserve the gains made in building the local government services. The study will specifically dwell on the following:-
iii) Determining the role of individual’s key officers and other organs in the local government such as the executive committee.
Control system is also to be designed to combat malpractice.
1.4 RESEARCH HYPOTHESES
For the successful completion of the study, the following research hypotheses were formulated by the researcher;
H0 Proper financial record keeping does not lead to misappropriation of public fund in the local government system.
H1: Proper financial record keeping lead to misappropriation of public fund in the local government system.
H02: Operating a cash account system is not a better way of eliminating the problem of accounting framework in our local government system.
H2: Operating a cash account system is a better way of eliminating the problem of accounting framework in our local government system.
1.5 SIGNIFICANCE OF THE STUDY
The provision of the financial framework in the local government system is a unique feature in the administration of finance. Hence, this study will add to the effectiveness of the operators of the systems. Information contained in this work will serve as a very useful guide to executive council as well as various heads of units seeking to achieve better result. More importantly is the power of the council over the budget prepared and presented to it by the executive. This study will also help internal auditors. Internal auditors are those who officially examine the financial records of a company within. It will help them evaluate the effectiveness and responsibility of the information they have. In addition, supporting staff such as those on industrial training attachment, those of Youth services and also casual workers re to benefit immensely from the study.
1.6 SCOPE AND LIMMITATION OF THE STUDY
The study is limited to Owerri. Even though there are other local governments with similar problem, we decided to take Mbaitoli local government as our case study. The researcher encounters some constrain which limited the scope of the study;
1.7 DEFINITION OF TERMS
Some of the following terms relevant to the course of study are defined below:
b)COUNCIL: According to advance learner’s dictionary. Council is of people elected to give advice, make rules and manage affairs.
1.8 ORGANIZATION OF THE STUDY
This research work is organized in five chapters, for easy understanding, as follows
Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding. Chapter five gives summary, conclusion, and recommendations made of the study