THE ACCOUNTING SYSTEMS IN LOCAL GOVERNMENT (A CASE STUDY OF OBINGWA LOCAL GOVERNMENT AREA ABIA STATE)
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THE ACCOUNTING SYSTEMS IN LOCAL GOVERNMENT
(A
CASE STUDY OF OBINGWA LOCAL GOVERNMENT AREA ABIA STATE)
ABSTRACT
Various accounting system is being used
by different organizations or firms to speculate and analyse their financial
statue.
However, for an organization to know
the system of accounting they will adopt depends on the kind of
transaction/business or activities such organization engaged Nigeria my
country. The problem of adopting a particular accounting system especially
among the various local governments in the states, has always been taken into
consideration to ensure good control and efficient management of government
operation. To a reasonable and considerable extent. This has been achieved, but
due to the complex system of our local government accounting, there has been
some set back.
Against this background, this project
is designed to point out the ways and systems through which the revenues and
expenditures of local Governments are accounted for.
The accounting system of Obingwa Local
Government Area will be used as a reference point to unravel this problems, and
as well their solutions. Also, this project will identify the nature and
purpose of L.G.A accounting and financial control.
Chapter one of this work is designed to
show the introduction of the case study with the various reforms to its scope
of operation. It also term’s to consider the problems facing the local
governments accounting system in Nigeria, chapter two of this research work
attempts to explore in details the related literature on the topic, review of
local government accounting system will regards to Obingwa L.G.A. Also, is the
L.G.A system of accounting for capital expenditure, recurrent expenditure and
stores.
Chapter three will tend to examine the
research design, the sample and instrument of data collection and the method of
analysis. These items are moreover most important because the validity of the
study is relative to the ability of the researcher to reach those directly
concerned with the problem of the research.
Chapter four is designed to analyse the
responses of the respondents of Obingwa L.G.A workers at various levels.
Chapter five of this research work will
tend to summarize, draw a conclusion and make recommendations that will
adequately make effective impact in the maintenance of local government
accounting system that will be devoid of any immaterial facts, so as to
maintain a true financial position at any point in times.
TABLE OF CONTENT
CHAPTER ONE
1.1
Introduction
1.2
Statement of the problem
1.3
Objectives of the study
1.4
Significance of the study
1.5
Methodology of research
1.6
Scope and limitation of the study
1.7
Statement of hypothesis
CHAPTER TWO
2.1
Review of related literature
2.2
Accounting system
2.3
Local government accounting system
2.4
Nature and purpose of local government accounting and financial control
2.5
Local government basis of accounting
2.6
Books of accounts and accounting records in local government systems.
2.7
Accounting for capital expenditure
2.8
Accounting for recurrent revenue
2.9
Stores accounting
2.10
Sumamry
CHAPTER THREE
Research methodology
3.1
Population of study]
3.2
Sample design
3.3
Sources of data
3.3.1 Secondary sources of data
3.4
Research instruments
3.5
Methods of data analysis
CHAPTER FOUR
Data Presentation and analysis
4.1
Questionnaire distribution & rate of return: Table 5.1
4.2
Classification of respondents
4.3
Section B: Capital receipt / expenditure
4.4
Section C: recurrent/expenditure
4.5
Section D: stores
4.6
Section E: General assessment
4.7
Testing of hypothesis
CHAPTER FIVE
Summary of findings and recommendation
5.1
Summary of finding
5.2
Recommendations
5.3
Recommendation for further studies
5.4
Conclusion
Bibliography
Appendix I
Appendix II
Appendix III
Appendix IV
CHAPTER ONE
INTRODUCTION
1.1
LOCAL GOVERNMENT IS THE THIRD TIER OF THE THREE TIERS OF GOVERNMENT
The nationwide local government reform
launched with reference to the 1999 constitution gave birth to the making of
local government a third tier of government. However, the 1999 constitution
gave it a fulk legal recognition and ever since then, it has enhanced the
grass-root participation at local government and thus enlarged the
responsibilities and roles of local government authorities.
The local government council as spent
out in the fourth schedule of the 1999 constitution of the federal republic of
Nigeria section 7 has the following as its functions
a)
The economic development of the state particularly in so far as the affairs of
the council and the state are affected and proposals made by the said
commission or body.
b)
Collection of rates, radio and television license
c)
Establishment and maintenance of centuries burial grounds and homes for
the destination or firm.
d)
Licensing of bicycle, trucks (other than mechanically propelled trucks),
canoes, wheel barrows and cars.
e)
Establishment maintenance and regulation of slaughter houses, slaughter slabs,
markets, motor parks and public places.
f)
Construction and maintenance of roads, streets lighting drains and other public
highways, parks, gardens, open spaces or such public facilities as may be
prescribed by the state assembly.
g)
Naming of roads and streets and numbering of house.
h)
Provision and maintenance of public convenience sewages and refuse disposal.
i)
Registration of all births, deaths and marriages.
j)
Assessment of privately owned housed or tenants for the purpose of leaving such
rates as may be prescribed by the house of assembly of a state.
k)
Control and regulation of:
i.
Out-door advertising and hoarding
ii.
Movement and keeping of pets of all description.
iii.
Shops and Kiosks
iv.
Restaurants, bakeries are the place fore food sales to the public.
v.
Licensing and
vi.
Licensing, regulation and control of seller f liquor.
2. The
function of a local government shall include the participation of such council
in the government of a state as respect to the following matters:
a)
The provision and maintenance of primary, adult and vocational education.
b)
The development of Agriculture and national resources other than the
exploitation of minerals.
c)
The provision and maintenance of health services, and
d)
Such other functions as may be conferred on a local government council by the
house of assembly of the state.
e)
The attainment of creating local government will be reached which is to bring
socio-economic development of the local government populance. Proper accounting
system should be installed to take care of both the existing and newly created
revenue basis. Such accounting system should be capable of ensuring local
government revenues and expenditures are well kept.
1.2
STATEMENT OF THE PROBLEM
first, with reference to Obingwa local
government, the main problem of this study is to examine the weakness and
limitations that may exist in the accounting system of local governments in
Nigeria. Manu scholars have criticized Nigeria local government accounting
system following the inherent weakness in the system thus requiring a study of
this nature to critically assess these weakness and highlight their attendant
implications on financial statements of local governments in Nigeria.
Secondary, there has been a problem
presently a financial statement that could reflect the true and fair view of
the financial position of the Nigerian local government.
Thirdly, abnormality in the treatment
of expenses and other items, e.g. treatment of capital expenditure as revenue
expenditure. Other abnormalities include the addition of cash basic of
accounting instead of the rational accrual basis, which is easier and
convenient to operate. Others include inappropriate description of accounting
terms haphazard and wrong classification of balance items or what is known as
the statement of affairs in the local government. The aforementioned
abnormalities render the financial statement of the local government greatly
misleading. Such financial statements hide the inefficiencies of the people
under whose custody the resources of the local government were entrusted.
Thus, the need to ensure proper public
accountability especially at the local government gave birth to this research
work.
1.3
the objective of the study
This study is to evaluate the
accounting system in the local government with a view to ensuring that they
meet up with the standard Board (NASB) etc.
The Internal control is carried is
carried out or applied in order to eliminate errors and possibly fraud, and
finally to suggest possible ways of improving the system in operation.
1.4
SIGNIFICANCE OF THE STUDY
The significance of the study is that
it will help in improving the accounting procedures and systems in operation in
the Obingwa Local Government Area of Abia State and possibly other local
governments sharing the same features in the preparation of their accounting
information and statements.
1.5
METHODOLOGY OF RESEARCH
A clear examination of some books of
account of Obinagu local government was done. This was to rarity if proper book
are kept, accounting standards maintained as it relates to local government,
management policies and accounting conventions adhered. Questionnaires were
also sent to different calibers of staff to prove the truthfulness of the
findings and its weaknesses. Also, personal interviews with top officers were
done. This is in inquiring more to get background information about the local
government and its accounting system and procedure. Also, related texts like
accounting textbooks, journals and other publications of professional
accounting bodies were also consulted.
All of the above were analyzed
critically to arrive at the conclusion.
1.7
STATEMENT OF HYPOTHESIS
Consignment upon the above mentioned
objectives, which this study is set out to achieve the following hypothesis,
were postulated and should be tested in course of the study. The hypothesis
are:
HYPOTHESIS I
Ho: The accounting
system of local government (using Obingwa local government as a case point)
does not allow for the preparation of financial statements that reflect the
true financial position of local government.
Hi: The
accounting system of local government (using Obingwa local government as a case
point) statement that reflects true financial position of local government.
HYPOTHESIS II
Ho: The accounting
system of local government (with particular reference to Obingwa local
government) is not adequate to design.
Hi: The
accounting system of the local government (with particular reference to Obingwa
local government) is adequate to design.
HYPOTHESIS III
Ho: The accounting
system of local government (using Obingwa local government as a case point) is
not effective in operation.
H1: The accounting
system of local government (using Obingwa local government as a case point) is
effective in operation.
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