This study is in partial fulfillment of the requirement for the award of Higher National Diploma in Accountancy (H.N.D) in Institute of Management and Technology Enugu.The topic is the Nature of Public Sector Accounting in (A case study of Enugu North Local Government Accounts).The purpose of the study is to established areas of importance of the account of local government currently being neglected by the treasury department of the various local government which will assist in reducing or minimizing enormous fund that are lost annually from misappropriation, negligence and errors of commission.  It is also intended to evaluate and highlight some of the various constraints inhibiting efficient financial management in local government. In view of this, this researcher work is discussed under five chapters, with chapter one focusing on the general introduction and historical background of the topic under review.  Chapter two deals with review of the related literatures as well as accounting procedures and books of the account.  The source of the revenue and expenditure of the council and the financial control of local government were all treated under this.  Chapter three is on the research design and methodology which analysis of the material for the study was obtained through the relevant literature. Chapter four deals with the analysis of data interpretation and evaluation of the major findings.  Chapter five focused on the summary of findings and conclusion, recommendation.  It is hoped that the contribution of this study will be useful to student studying under financial studies, treasury departments of various local government.
1.1       Background of the study
1.2       Statement of problem
1.3       Objective of study
1.4       Significance of the study
1.5       Hypothesis
1.6       Scope and Limitation of the study
1.7       Definition of terms
2.0       Review of related literature
2.1       Theoretical framework
2.2       The structure and scope of memorandum
2.3       The principal officers of local government
2.4       Source of the revenue of local government
2.5              Expenditure of local government
2.6              Accounting rule and codification
2.7              Financial content of local government
3.0       Research design
3.1       Source of data
3.3       Research instrument
3.4       Selection of sample size
4.0              Sample data analysis
4.1       Analysis and evaluation of question and interview
4.2       Test of hypothesis using chi-square
5.0       Summary of finding
5.1       Conclusion
5.2       Recommendations
1.0              INTRODUCTION
One of the things that were handed over to Nigeria by her colonial master is public sector.  This is because during colonial era, investment activities were largely in the hands of the government.  However, public sector can be defined as publicly owned companies or industries.
According to Mr. Ani .W. Uchenna in his textbook titled.  “Government and Public Sectors Accounting” as that sector of the economy established and operated by government and its agencies, this distinguishes public sector from the private sector and it is organized on behalf of the citizen.  They are expected to make minimum profit from their operations.  The Nigerian public sectors consist of three separate levels of government whose stations, powers and relationship are defined by the constitution of the Federal Republic of Nigeria.  These are the federal government, the state government and local government, the state government currently 36 in numbers and the local government presenting 774 council.  Due to the fact that government has the primary duties of maintaining law and order, providing the basic infrastructural facilities as well as the guidelines for the performance of economic activities, it therefore becomes difficult to justify the scope and nature of government activity in Nigeria.  This also makes the Nigerians public sectors expensive.  It is on the record that the parastatal gobble up as much as 30 percent of the federal government’s capital budget and 40 percent of the government’s non-salary recurrent expenditure budget.
Normally, accounting has been defined as a process of recording, classifying, summarizing and report business transaction.  Accountability is furnishing some one with satisfactory reliable, verifiable accessible records, reasons and expectations for actions of those having custody of power, human resources, public money and other resources, public-sector accounting is the preparation and analysis of final accounts of government ministries and parastatals in model and advanced accounting standard.
This researcher has chosen to research to focus on the nature of the accounts of the local government.  It is the third level of government in Nigeria.  Administration in Nigeria was in the beginning a colonial creation through which the ‘natives’ were involved in modern system.  Between the 1800’s and the 1930’s, the colonial natives authorized were established in their rudiment farm in the country.  They have undergone several changes since Nigeria become independent almost 40 years ago.
 G.O. Orava (1978) emphasized that one of the main reason why local council exist is to collect various forms of revenue.  From its citizens and to use these to provide social services in an efficient manner as possible.  It has to prepare periodically a plan of expected cost of various service to be provided in the coming year.  The expenditure pattern.
The fund management
Auditing and accountability, by the elected and appointed politicians as well as servicing efficiently in the local government with a view of improving its service.
The history of Nigeria local government can be dividend into six major phase which includes.
i.                    The early colonial phase from 1900 – 1952
ii.                  The late colonial early independent period from 1952 – 1963.
iii.                The first military phase 1966 – 1975
iv.                The second military phase from 1975 – 1979
v.                  The presidential civilian era of 1979 – 1983
vi.                The third military era of 1979 – 1983
During the early colonial phase indirect rule system operated.  Initially, they were constituted as sole native authorities symbolized by the all pervading power exercised solely by the traditional chiefs and emirs as agents of the colonial government.  The experiment in local democracy proved a complete failure and when the military came to power in 1966 all the local councils were dissolved, and then function taken over by councilors, nominated by respective military governments, and some traditional rulers.  During this period, the powers, finance and effectiveness of the council were considerable reduced, revenue from various services as well as government grant receivable by the council.
Other reasons for the establishment of local government authority include.
i.                    To bridge the communication gap between the rural areas and the urban centers and between the federal government and the rural area.
ii.                  Bring of government closer to the people in order to feel the impact of government activities.
iii.                To foster rapid and even social-economic development of the country.
iv.                To promote education
In an attempt to achieve therefore goal successively, government had made various efforts, which were not enough to establish an independent local government council as the colonial, regional and states government failed to find the new system of governance.  Increased responsibilities bestowed on local government coupled with substantial growth in their number, calls for improved financial capabilities for them to meet the challenges of their new roles and being able to recount and return qualified staff as well.
With the extensive administration restructuring the revenue (101 to 151, to 201) and responsibilities of local government would necessitate indent study of the various source of budgetary control system and this impact formed the background to the nation-wide reform of the local government in 1976 by the military government of Murtala Obasanjo regime.  The final phase saw the disbarment of state ministries of local government in 1988 October and the regulatory function were transferred to the office of the government becomes autonomous.  Military government provision known as the local government (basic constitutional and traditional provision decree 1989).
Local government function
i.                    Formulation of economic planning
ii.                  Development scheme for collection of rates and insurance of radio and television licenses.
iii.                Naming of roads and streets with houses.
iv.                Registration of all birth, deaths and marriage.
1.2              STATEMENT OF PROBLEM
The accounts of the local government are characterized by a lot of in adequacies.  The researcher has therefore, taken pain to highlight some of the easily identifiable ones like.
i.                    Improper maintenance and keeping of accounts and other records.
ii.                  Lack of satisfactory system of internal control in operation.
iii.                Failure to comply with financial memoranda in the treasury and other departments of local government.
iv.                Limitation and inadequate training opportunities for key treasury or supporting staff.
v.                  Lack of experienced officers to tackle onerous and vital duties of the revenue collection.
vi.                Late release of grants to the council by federal and state government.
vii.              Recruitment and placement of unqualified accounting staff to key positions.
viii.            Payments made without authorization and in most cases without availability of fund.
The purpose of this study is to established area of importance in the accounts of local governments currently being neglected by treasury department of the various local governments which will assist in reducing or minimizing the enormous sum of money that are lost annually from misappropriation, negligence and errors of commission.
The objective of the study however, intended, to evaluate and highlight some of the various constraints inhibiting an efficient financial management in the local government.
Since the local government system in Nigeria is still in a development process.  The study will help in achieving the following.
a.                   Given generally, guidance and advice to the councils on all matter pertaining to the treasury and conduct of the councils business.
b.                  Ensure that proper system accounting is being maintained in all the councils.
c.                   Ensure that the council discharges its responsibilities by the supervision of its finance.
d.                  Enable prospective employees know in advance what record are kept.
e.                   Compare the ways records are kept in business environment and that of local government.
1.5              General statement of hypothesis
This research work will test the following hypothesis which when analyzed, interpreted, evaluated, will from the basis of conclusion and recommendation.
Hi:       Revenue accounting services as a measure of efficiency in the local government
H0:      Revenue accounting services as not a measure of efficiency in the local government
Hi:       Public sector accounting is in variance with the private sector accounting.
H0:      Public sector accounting is not in variance with the private sector accounting.
Hi:       The accounting in local government is necessary for adequate record of financial activities of council.
H0:      The accounting in local government is not necessary for adequate record of financial activities of council.
Hi:       That almost all the department of local government make use of accounting information.
H0:      That not almost all the department of local government make use of accounting information.
1.6              Scope and limitation
i.                    Indept study could only be carried out in some of the department of the local government visited.
ii.                  Some of the staffs were unable to divulge to me some important facts and data for fear of victimization.
iii.                Some of the copies of the account kept by the local government council were not given to me and this prevented me from including them on appendix.
iv.                The flow of necessary information from key official were hindered by the enormous official duties by the members of this local government council.
1.7              DEFINITION OF TERM
REVENUE:               Additions to assets or decrease in liability always give rise to increase in the residual equity in a fund.
EXPENDITURE:     Outflows of working capital include those charges relate to the current fiscal period.


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