PROBLEM OF REVENUE SOURCE IN LOCAL GOVERNMENT ADMINISTRATION (A CASE STUDY OF ANINRI L.G.A ENUGU STATE)

CHAPTER ONE

1.1     BACK GROUND OF THE STUDY

It is generally believed that man is a political being. In his effort to organize his society in ordering manner man evolved system or government. The problem o a workable system of government is the pivot of human political activities.

Nigeria as a sovereign nation operates a federal system of government. In its federal character Nigeria is divided into three levels of government viz: - the federal government, state government and the local government councils.

These three levels of government are involved in a co-operative venture geared towards improving the life style of the citizens.

Onwo (1992) Observed that each level of the three tiers of government derive its powers not from the magnanimity of the central government but from the constitution each level of government has defined responsibilities assigned to it by the constitution. The implication of this is that the three segments of governments are mutually interrelated in a unified effort to make life worth – while for the masses.

Local government councils are generally perceived as the grassroots government. This in effect shows that the government closest to the masses.

Olawale (1980) was emphatic on this when he said that local government councils can be referred to as government at local level and this enable local people to govern themselves in certain specific areas. This arrangement is essential the central government connect possible attend to every detail of local administration; hence it delegates local functions to local government. The local government reforms introduced by the federal military government in August, 1976 were meant to bring governmental services at the doorsteps to rural dwellers. In deed, the creation of local government councils depicts the pragmatic efforts by different regimes to reach the people at the lowest ladder of the society.

Aninri local government area was created out of Awgu local government in October 1996 by the late head of state General Sani Abacha. As one of the new local government councils, it is facing a very serious crisis of development since its creation. Some problem ms facing the councils are insufficient office accommodation, staff quarter and office infrastructures. These problems seem to be insurmountable.

Indigenes of the local government are desirous of enjoying modern facilitating, improved means of transportation, such as good road net work and mass transit transport services. These desire are in line with stated objectives of the local government reforms as sponsored by the federal military government in 1976. The Nigeria year book, of 1983, outlined the aims of the local government system in the country. According to that document, one o the cardinal aims of the local government system is to make appropriate services and development activities responses to local wishes and needs by delegating authority to local representative bodies.

The citizens expect the council to excel in developmental activities. They want the influence of the communities in the local government area via the provision of functional feeder roads and public utilities.

The council administration in the other hand complain of inadequate finances to meet up with the numerous responsibilities yearning for attention. They always complain that staff salaries alone drain a high percentage of the monthly allocations financial experts postulate that money is at the centre of developmental projects. Acquisition and proper accountability of funds are the pivot upon which a successful local government system revolves.

From the foregoing, it seems that an empirical study into the revenue base of the local government system at this harsh economic period is not only vital but imperative.

It is therefore against this background that this project work is being undertaking with a view to discovering the problem of revenue sources in local particular reference to Aninri local government area of Enugu state.

1 .2    STATEMENT OF THE PROBLEM

The relevance of the local government councils as the government at the grossroot is measured by the quality of services rendered to the rural dwellers.

          For the council to render meaningful services, in form of provision of basic amenities, construction and repair of roads and bridges create employment opportunities for the citizens and pay staff salaries as and when due, money is undoubtedly required.

In fact, money is generally recorded as the hallmark of any visible developmental project. Without the availability of revenue, the council will not only be incapable of serving the people but will undoubtedly crumble;

1. 1. 1. One of the fundamental problems in local government financial administration is the issue of revenue generation. Aninri local government council may have its unique problems that militate against its financial administration.

1. 1. 1. Another outstanding problem is that of inadequate federal allocation as a source of revenue.

1. 1. 1. Furthermore, the problem of financial administration in form of improper utilization of the revenue, either internally generally or allocation from the federation account.

1. 1. 1. Another problem is that of generation revenue internally by the staff of Aninri local government area.

1. 1. 1. the problem of security loans from banks as a source   of revenue to the council

1. 1. 1. Again, the problem of improper and inadequate machinery for financial accountability.  

1. 1. PURPOSE OF THE STUDY

The central focus of the study is to critically analyze and appraise the problem of revenue source in local government area as a case study.

1. 1. The study therefore is meant to identity major revenue source in Aninri local government.

1. 1. To find out the subsidiary revenue sources open to the local government.

1. 1. To find out how the revenue meet with the councils expenditure

1. 1. To find out possible avenues for generating funds internally.

1. 1. To ascertain the problems that confronts the council administrators generating revenue for their services.

1. 1. To investigate the system of financial control in the local government council.

1. 1. To identify the prospects of the revenue sources to Aninri local government council.

1. 1. SIGNIFICANCE OF THE STUDY

The significance of any human endeavour is measured by its relevance to solving human problems.

The project will be of benefit, first and foremost to the Aninri Local Government administrators as it will expose to them potential sources of generating of revenue internally. Secondarily, it will help the council to strengthen it financial base as this study would highlight some identified problem hampering the generation of revenue in the council.

It is useful to the general public especially the indigenes of Aninri local government to co-operate with local council administrators to enable the build a viable local government by paying their taxes and rates promptly.  

1. 1. SCOPE OF  THE STUDY/DELIMITATION

The study will concentrate on the finance department of Aninri local government whose duty, it is to administer its finances. In doing so efforts is being geared towards identifying the problem associated with revenue encountered by revenue enforcement officers and the prospects of the revenue potentials of Aninir Local Government Area.

It does not concern itself with the general administrative set up like day to day personal administration, health management and works department of the local government.

1.6     RESEARCH QUESTIONS

The following questions were postulated:-

1. What are the major sources of revenue of Aninri local government?

1. what are the subsidiary revenue sources of Aninri L.G.A?

1. What systems of financial control measures are used by council administratiors?

1. What are the problems associated with the revenue sources of Aninri L.G.A?

1. Does the stated joint allocation committee of local government revenue hamper the revenue sources of the council?

1. What are the prospects of the sources of revenue to Aninri L.G.A?

1.7     DEFINITION OF TERMS

          Some concepts and terms requires proper explanation or definition to enhance our understanding of the theme where necessary opinions of scholars will be cited to illustrate the terms.

Democracy

          The Ancient Greeks defined democracy as a government of the people, by the people and for the people. This political arrangement allowed every adult male citizen to participate in government activities.

          Dare (1981) postulates that modern democracy is a system of government which gives to individual maximum freedom and periodical opportunities to choose their leader and programmes. Multiple party-systems are a vital characteristic of a democratic government.

Pragmatism

The term pragmatism is derived from the Greek from which practical action arise. It could simply be referred to as philosophy or practical consequences or result orientedness. In our context, it is used to describe political programmes aimed at betternece living standard of the masses.

Rural Development

Rural development is a strategy designed to improve the socio-economic life of the rural dwellers. It involves extending the benefits of development to the less privileged in the society. When applied to local government councils as a third tier of government, in the county, it means conscious efforts by the government, to carry government programmes to the village level. In so doing, deliberate actions are initiated to improve the lot of the rural population.

Accountability

Accountability as a concept connotes different professionals. Accountability when used by financial experts  like accountant and Auditors, simply means the use of a specified sum of money in accordance with laid down rules and regulations it could mean judicious spending of financial resources for the items they are meant for. It is the opposite of recklessness in financial management. In this wise, prudence is the watch word. 

This is the process of examining financial records of income and expenditure in an organization, to ascertain the according or entries made there in. it is used here to refer to devices by which local government resources are being controlled. An individual who specializes in auditing is referred to as auditor.