The third tier level of government in Nigeria is tier called “Local Government” it was established with the aim and the specific function to assist the higher s of government thus, the federal and state to bring effective rural development and good governance at the grassroots level. Both fiscal and physical evaluation of the performance and effectiveness of the third tier level of government carried out revealed that this tier of government has performed below expectation. This research work which is challenged of financial management in Nigeria local Government system: A case of Ivo local Government council of Ebonyi State was undertaken to anticipate and comprehensively entrench or discuss those inhibitive factors to proper financial management in Nigeria local Government system. It recommended that local Government council should adapt and put in place efficient financial management to maximize the utilization of the available scarce financial resources. This is necessary for good and fascinating infrastructural development and provision of social amenities which will in are way or the other promotes the living standard of the grassroots level.
1.1 BACKGROUND OF THE STUDY
According to aborisade, (2003) in his write up defined or state that financial management in any local government involves the inflows of payment, it can also be said to be the art of raising and spending money which is ever prominent facts to any local government.
Financial management in any local government system is like a vehicle as whole with many parts, that when one part of it most especially the engine part is not properly perfectly maintained and guild not strictly adhered to can cause damage to the vehicle thereby and therefore affectively the various other part and will prevent the vehicle from functioning, in relate to our topic which will prevent the local government even organization from performing it’s function. Part of the responsibilities of local government is to ensure efficient service delivery to the people, and for any organization to deliver it’s function efficiently, huge amount of money is needed and efficiently financial management must be adopted.
This therefore, follows Orewa, G.O (1991) whom states that finance must be handled with care and disturbed according financial regulation. The ideal is to analyze the efforts, made by the council to regenerate funds internally to supplement those from the state and federal source and finally make recommendation on some possible course of action that will enhance improving the situation. It is said that resources are limited want are uncountable. The same thing can be said of any government, be it rid federal is appreciated that the place of financial accountabilities can be recognized fully in attaining other objective of local government.
Again, the issue of participatory democracy can not be consolidated fully in financial management is not well studied. The masses are represented by representatives since it is not possible for all to be in government. The only way the masses participate in government is any time their representatives are called to give account of their stewardship. The highest stewardship is financial accountability.
This is necessary because governments are established to bring good welfare to the citizen. So, the stewards are always made to do this to those they are representing i.e. the masses.
Finance is the backbone of any functional organization depends on the effectiveness of management of its finance to achieve the aims and objective of establishing such organization. If finance is well managed in our local government then there is no doubt that the organization will not attain it goal and objectives.
The reverse is the case when there is mismanagement of finance in the local government. Lack of funds which are experienced in the local government are caused by such function such as those posed by depressed state of the nations economy. Management has to do with the aggregation of planning, organization, staffing, directing, leading and controlling.
According to Pendey (1996) financial management is that management activity which concerned with the planning and controlling of firms financial resources, for the attainment of sound financial management in any organization, the functions of financial management must be well executed.
This research work therefore focuses on the challenges facing financial management in Nigeria local government, which our case study will focus on local government council in Ebonyi State. Also, the importance of finance in Nigeria local government system cannot be over took, because of its contribution to the growth and development of any functioning organization which Nigeria local government is one of them.
1.2 STATEMENT OF THE PROBLEM
This study has been undertaking in order to identify and analyzed the low internally generated revenue and the challenges that hinder efficient and effective management of the council’s financial resources.
This research tends to solve the following problems.
1.3 RESEARCH QUESTION.
1.4 OBEJECTVE OF THE STUDY
The following shall constitute the objective of the study.
1.5 SIGNIFICANCE OF THE STUDY.
1.6 SCOPE OF THE STUDY.
The study was restricted to Ivo local government area. However, the study looked at the various source of financing in the local government system in Ebonyi state in particular and Nigeria in general.
1.7 LIMITATION OF THE STUDY