MPACT AND PROSPECTS OF MANAGEMENT ACCOUNTING SYSTEM; AN APPLICATION OF THE REVISED FINANCIAL MEMORANDA (A CASE STUDY OF OYI LOCAL GOVERNMENT AREA)
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IMPACT
AND PROSPECTS OF MANAGEMENT ACCOUNTING SYSTEM; AN APPLICATION OF THE REVISED
FINANCIAL MEMORANDA
(A
CASE STUDY OF OYI LOCAL GOVERNMENT AREA)
ABSTRACT
The essence of this research is based
on the impact and prospect of management accounting tools on the local
government accounting system by studying the application of the revised
financial memoranda and recommending the ways improvement can be made with a
particular reference to Oyi Local Government Council. Though the local
government council were visited for the purpose of correlation in writing this
research oral interviews and personal observations were used. This study
is as a result of historic survey of the origin of the local government and the
financial memoranda as the source of decision making. The finding showed
that the local government areas applying the financial memoranda in management
decision still needs improvement of the application of all fact of decision
making organs of the local government council. The chapter one of this work
covers the introduction review the various literature on the subject matter
discuss about the methodology to be employed during the course on the presentation
and analysis of data as would be obtain during the course of the research. This
study will be terminated at chapter five as at gives the summary of findings
made in the study, conclusion. The research will also in chapter five
make recommendations on further studies.
TABLE OF CONTENTS
CHAPTER ONE
Introduction
Background of
the study
Statement of the
study
Objective of
the Study
Scope of the
Study
Limitation
of the Study
Significance of the
Study
Research Question
CHAPTER TWO
Literature Review
The local Government Emergencies
Local Government Financial
Guideline
Revenue Allocation and Control
Functions of Principles Bodies and
Officials
CHAPTER THREE
Research Design and
Methodology
sources of Data
Research Population
Sample Technique
Sample Technique
Research Instrument
Method of Data Analysis
CHAPTER FOUR
Data Presentations
and Analysis
Presentation
and Analysis Of Data
CHAPTER FIVE
Discussion of
Findings, Recommendation and Conclusion
Summary of Findings
Conclusion
Recommendations
References
Appendix
CHAPTER ONE
INTRODUCTION
Background of the
Study
Financial memoranda is a document with
codified set for roles and regulations which provide detailed guidance and
instrument on the financial accounting and stores procedures to be followed in
the administration of financial affairs and material management of each local
government in Nigeria. The financial memoranda in use in the country
today have a long standing history and tradition. Since the inception of
native authorities / administration in Nigeria government have always provided
detailed guidelines to regulate the financial operations of these authorities
up to the local government reforms of 1976 each state issues its own financial
memoranda for use by its constituent native authorities / local governments.
The 1976, local government reforms however state the need for uniform set of
rules and regulations to guide the conduct of financial affairs in the new
local government systems. Thus, the federal government appointed a
committee of experts in 1977 to review the various financial memoranda use in
federation. This committee submitted its report in May, 1978 with a draft
financial memorandum designed to replaced the three separate volumes inherited
from the three regional government. The draft harmonized financial
memoranda was issued as model financial memoranda to each state subject to
minor amendments, mainly to reflect local peculiarities.
The 1979 model financial memoranda which was given enabling jurisdiction effect
by the state government was in use up to 1990 when major development in the
structure of the country’ local government system occasioned in large part by
the application of the 1988 civil service reforms to local government service,
and the extension of the logic of the presidential system of government to
local government necessitated a review of the model, financial memoranda.
Consequently, a
committee was appointed in July 1990. The committee report currently
constitutes the reviewed model financial memoranda. The revised financial
memoranda officially issued in December 1991 by the (then) Vice President of
the republic of Nigeria, Adimiral A. A. Aikhomo who in his forward to the
revised edition among other things, expressed the hope that the provisions of
the model financial memoranda would be faithfully implemental (emphasis mine) in
such a way as to foster natural culture of public probity and accountability
beginning from the grassroots.
Management is
essentially concerned with planning and control of the resources of an
organization with a view to the attachment of set objectives.
Planning is concerned
with a determination of goals and the formulation of a decision model for
selecting means of achieving these goals. Control on the other hand is the
regulations of the activities within an organization so that they are in accord
with expectations established in policies plans and target. Crucial of
the planning and control decision of management is information good decision
are based on information that is timely, relevant, properly, presented, problem
soling and forward looking.
Management accounting is concerned with the application of accounting and
statistical techniques to the specific purpose of providing and interpreting
information designed to assist management in its function of promoting maximum
efficiency. The techniques applied for the analysis are both statistical
and accounting in nature budgeting and budgetary control in the local
government estimates and project of cost analysis. It is in the light of the
above stated realism that the federal government decided to harmonize the
financial memoranda of the them regional memoranda, applicable to all local
governments in the country.
It
is now 20years sense the revised edition came into being. Signals and
information across the country however reveals that the implementation of the
provisions of the memoranda is far from satisfactory. The main objective of
this research is to appraise the impact and prospect of the revised financial
memoranda as a management accounting tool in the local government accounting system.
Determine the factors that have continued to constrain the effectiveness of the
revised financial memoranda and finding ways and means to address these
constraints. O overall the overriding objective is to strength financial
management practice and making local government more responsive, responsible
and accountable to the aspiration of the people.
Statement Of Problem
The essence of local government
accounting is to provide information. Its objective is to serve management by
providing the information its objective is to serve management by providing the
information through recording, measuring and analyzing data which emanate from
the financial transaction of the local government.
The accounting system thus, measures and reports on the performance of a local
government the extent to which its organizational goals have been met, its
financial position and the performance of its principal officers. It also
generates an essential part of the management making.
The accounting functions of a local government constitute a sub- system within
its management information system. The main function is the systematic
according of financial transactions for purpose of providing financial
information that well facilitate effective and efficient management of a local
government.
In
the light of the foraging, the following problems are inherent in the system:-
a)
lack of adequate accounting information for use by management for the purpose
of planning, control and decision making.
b)
Non –availability of detailed information on accountability for public funds,
especially on collection of revenue, disbursement of funds and the discharge of
the functions of the local government by its principal officers.
c)
Non-Production /publication of monthly and annual financial accounts summarized
the operations of a local government for a time period and its financial
position at the and of the period.
d).
Lack of continuity in policies programmes and objectives due to political
instability, the constant, posting of principal functionaries militate against
management by objectives. It is against this background that the
researcher is against this background that the researcher is seeking to find
out the impact and prospect of management accounting system. An
application of this financial memoranda.
Objectives
of the Study
The 1976 local government reforms which
gave birth to the first edition of the model financial memoranda was open and
frank acknowledgement that a responsible and response government at the grass
root level is an indispensible prerequisite to a stable and lasting government
at the national level. These consideration motivated the federal
government to seek ways and means and means of establishing and reforming the
government at the grass root level. This process necessarily entailed a
significant decentralization of certain functions of eth state government to
local government and the allocations of funds from the federation accounts to
local governments in order to harness local resources for rapid development at
the local level.
A
close look at the 21 local governments Anambra State of today reveals that the
intensive of the federal government is far from reality in consideration of the
huge financial allocation made to local government one can easily concluded
that non performance of local government is due to mismanagement.
The question now arises of what help is that financial memoranda to the local
governments.
The objective of the researcher is:-
a.
To ascertain if the local government is to apply the provisions of the financial
memoranda and to what extent.
b.
To find out problem they do encountered their bid to apply the provisions of
the financial memoranda.
c.
To find out what contributions do the application of the financial memoranda
play towards the harnessing and better management of resources.
d.
To find out if there is need to improve the management accounting tool of local
government, the provisions of the financial memoranda.
e.
To ascertain if lack of development project an rural communities is as a result
of inadequate management accounting tools.
Scope of the Study
The impact and prospect of the revised
financial memoranda as management accounting tool in local government
accounting system is a verse topic. Given the limitation in time and
resource constraint, this little researcher will not just be enough. To say
that all that is required has been exhausted for the researcher only focused
attention on Oyi and Ihiala local government of Anambra State Nigeria in
analyzing the developmental efforts, the resource availability and the
application of the relevant laws rules regulations guiding the use of public
funds.
Significance of the
Study
These studies will be of immense
benefit to the local government and people of Oyi local government as it will
and in crying the tremendous merits in apply the revised financial memoranda.
It
will also be very useful to all academician, lecturers and students who which
to undertake a research on this topic or other related topic.
This study will and in the effective allocation of local government revenue
from the federal government to all the 774 local government of the federal
republic of Nigeria.
Finally, it will and all local government administrations to effective usage of
the revised financial memoranda towards making proper use of finance. As
a result, this study will go in a long way and effective use of local
government finance geared towards grass root development, the study will be of
immense importance to the ministry off finance and importance to the ministry
of finance and all financial stakeholder and other public sector accountant.
In
all, thus study is a major plus to public sector accounting.
Research Question
The research questions which this study
answers are as follows:
i.
Do Oyi local government need to revised application of the financial memoranda.
ii.
Can local government effectively apply the provision of the financial memoranda
units accounting system.
iii.
How does the local government to their revised financial memoranda during
economic depression.
iv.
How would you rate Oyi local government accounting system before now.
v.
Do you think its is capable of revolution the Oyi local government accounting
system.
vi.
What effect do you think the application fo the revised financial memoranda
will have on the accounting system of Oyi local government.
vii.
Do you known abut the revised financial memorandum.
viii.
Can the local government be responsible and accountable to the aspiration of
the perble.
ix.
Can you identify any short comings associated with the application of the
revised financial memoranda.
x.
Do you really think that there is any need fro the revised financial
memoranda.
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