CHAPTER ONE INTRODUCTION 1.1. BACKGROUND OF THE STUDY Public money ought to be handled with the most scrupulous consciousness of honour. It is not the product of riches only but of the hard earnings of labour and poverty. It is drawn even from the bitterness of want and misery. Not a beggar passes or perishes in the streets whose mite is not that mass. The desirability for prudent and judicious management of public funds cannot be overemphasized. Public funds are public trust in the hand of local government officers, as such; they should be efficiently utilised and properly accounted for. This is what has given birth to the issue of financial management and accountability, the various provisions for ensuring eicient and effective financial management and accountability at the local government level. Local government is a form of decentralization of authority called devolution. Devolution of powers was driven by the failure of national economic planning to deliver quality services to users at the local level. This resulted in the design of decentralized structures and the apportionment of resources and power between different tiers of sub-national governments. Alam (2008), noted that decentralization has placed increased responsibility for the delivery of public services and the achievement of the Millennium Development Goals (MDGs) on the sub-national and local governments. This has been the case in federal systems like Nigeria, where state and local governments have sustainability responsibility for the provision of services and infrastructure. In Nigeria, the local government is constitutionally mandated to provide services to the people and security for the citizenry and ensure participation of the citizenry in government. This requires that local governments have under their control, a range of sources of fund to be able to perform the assigned functions. In Nigeria, the local governments have various sources of fund, such as statutory allocations from the federation accounts, local taxes and charges borne by residents of the jurisdiction, grants, returns on investments, etc. The effective performance of the assigned functions by the local governments depends on effective and prudent management of their financial resources. In recent time, local governments have always explained away their ineffective and dismal performance of their functions by inadequate funds. However, it has been observed that poor finance management, rather than inadequate finance is the bane of local governments’ inability to achieve substantial development in their domain (Ojo, 2009). Abubakar (2013) observed that the financial position of local governments in Nigeria has improved considerably due to enhanced allocation from the federation account. Kalawole (cited in Lawal, et. al. 2010:232) observed that the lack of funds was no more a constraint on local government performance, but mismanagement and misappropriation of funds accrual to it. Management of local government finance entails the application of all the management functions of planning, organizing, controlling, etc. in the area of finance. Planning the finance of local governments includes budgeting which specifies the sources and expenditure points. Organizing is the allocation and utilization of funds. While controlling is a measure to ensure that there is no deviation in the set budget during implementation, and timely correction or adjustment to check any deviation. The paper therefore, attempts a periscope view of the management of local government finance and accountability in Nigeria, in the performance of the constitutionally assigned functions. This is with a view to highlighting its weaknesses and offering some suggestions on how to effectively manage local government finance. These functions as earlier said are provision of goods and services, security of citizens, achievement of MDGs and training ground for political participation.

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