THE ACCOUNTING SYSTEMS IN LOCAL GOVERNMENT: A CASE STUDY OF OBINGWA LOCAL GOVERNMENT AREA ABIA STATE

CHAPTER ONE
INTRODUCTION
1.1   BACKGROUND OF THE STUDY
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 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 as 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 sewage 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.
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 populace. 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       OBJECTIVES 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.  
1.6    THE SCOPE AND LIMITATION OF THE STUDY
This study deals with areas like internal controls system and how they are being put to practice in local government it deals with areas like adherence to professional accounting standard and the provision of the law as it concerns recording, analyzing and interpretation of accounting information. The use of accounting principles and conventions and their application in the preparation of accounting information was also examined.  
Finally, the management policy and role in the allotting information in the local government was considered. There are certain limitation which include the vastness of Nigeria and the financial implication of going to different local governments to collect data. Also time factor is included in the limitations for this reasons, the study was restricted to Obingwa local government of Abia state.   On the final note, access to certain information which are necessary e.g. statistical data and some vital books of account which were almost turn out and also faded out. Also in same cases, there were no adequate statistics and in others they were in shamble and therefore current be relied upon.  
1.7    STATEMENT OF HYPOTHESES
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.          

REFERENCES 
1.      Oloyede P.A “Nigeria administrative law” (Ibadan University press PLC: 1991) pp 126 – 127.  
2.      Babangida I.B “watershed on our national revolution” 1992 ludget address to the nation on January 1, 1992.  
3.      Constitution of the federal (republic of Nigeria 1979)  
4.      Willson A.U. “Government and public sector accounting” (Enugu: Immaculate publications Ltd. 2001) p. 22.