AN APPRAISAL OF FINANCIAL CONTROL TOOLS IN THE LOCAL

GOVERNMENT ADMINISTRATION

(A CASE STUDY OF SELECTED BANKS IN IMO STATE)

BY

ONUKAFOR GOODNESS CHINAZAEKPERE

2018/HND/ACC/82475

A PROJECT WORK SUBMITTED TO THE DEPARTMENT OF ACCOUNTANCY,

SCHOOL OF BUSINESS AND MANAGEMENT

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF

HIGHER NATIONAL DIPLOMA IN ACCOUNTANCY

JANUARY, 2021
 CERTIFICATION

This is to certify that this research project titled “An Appraisal of financial
control in the Local Government Administration (A case study of Ngor
Okpala Local Government Area) was carried out by ONUKAFOR GOODNESS
CHINASAEKPERE with registration number 2018/HND/ACC/82475 in partial
fulfilment of the requirements for the award of Higher National Diploma
(HND) in the Department of Accountancy, School of Business and
Management Technology, in Imo State Polytechnic, Umuagwo-Ohaji

…………………………………….. ……………………………
Mr. Obinna Okere. C. Date
(Project Supervisor)

………………………………….. …………………………….
Mr. Anthony Amaefula I. Date
(Head of Department)

………………………………… …………………………….
Dr. C.C Chima Date
(Dean of School of Business)

…………………………….. …………………………..
External Examiner Date
 DEDICATION

This project work is dedicated to the Almighty God, the creator of Heaven
and Earth and the giver of life for his infinite Mercies, the source of all
Wisdom and the foundation of all Knowledge and Understanding to
complete this work. Also to my lovely parents, Elder and Mrs. Clement
Onukafor who kindly financed this project till the end. May God bless you.
 ACKNOWLEDGEMENTS

I am grateful to God Almighty for granting me the priviledge, giving me the

Wisdom, good Health and Understanding throughout my stay in school.

I also thank my Supervisor, Mr. Obinna Okere C. who through his fatherly
and friendly advice and correction sees me through during the time of my
project work. Sir, I really appreciate your supervision and assistance.

I acknowledge my HOD, Mr. Anthony Amaefula I. and also recommend my

Dean of study Dr. C.C Chima and my able lecturers who have contributed
their own quota in making this dream come through.

I want to thank my sweet Parents, Brothers, Sisters and my entire relatives

for their prayers, Financial and Moral support towards my studies, May
they live to eat the fruit of their labour.

And to my friends and Well wishers; in the name of Simon Nora

Nkechinyere, Destiny Dakup, Ohaekelem Kingsley Uchenna and
Umunnakwe Chikodi, Osuji Francis Okechukwu for their support,
encouragement and advice throughout my education, may God grant their
heart desires.

I will not forget to acknowledge my irreplaceable sister Miss Oluchi Hope

Onukafor who have been there for me all through my stay in school, I am
so proud to have you as my elder sister, May my God continue to bless you
abundantly above your equals.
Above all, I thank and appreciate God for keeping me alive throughout my
pursuit of Higher National Diploma (HND) and to the end of this
programme, I say may His name alone be praise, Amen.

ABSTRACT

This research investigates financial control in the local government

administration using Ngor Okpala LGA as a case study. Different Literatures
relating to the study were reviewed. A sample size of 133 staffs was drawn
from the organization with a population of 200 staff using Yaro Yamen
method. Questionnaires were used to collect relevant data which was
presented, analyzed and interpreted with simple percentage and tables and
the hypothesis formulated was tested using the Analysis of variance
(ANOVA). Based on the analysis, the following findings were brought to
light. There is a system of internal control in the local government, the
local government make use of financial control tools in decision making.
The local government adopt the concept of auditing and sound financial
control system. Therefore, the following recommendations were made;
Review of the internal control system, Recruitment of qualified personnel
as well as training and retaining of staff.
CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Workers in the civil service especially those involved in government

financial operation are well acquainted with financial control. This such
terminologies like cash control, capital expenditure warrant, budgetary
control, fund control are not strange to moist of these public servants. The
aim of the budgetary control as a tool is to make possible format basis for
monitoring the progress of the organization as a whole toward the
achievement of the objectives specified planning budgets

Therefore in order to achieve the set target for any budget period,control
measures ae necessary. The effectiveness of the financial tools in the
realization of the above highlighted objectives of the local government
therefore, constitute the pivot of this research work.

HISTORICAL BACKGROUND OF NGOR OKPALA LOCAL

GOVERNMENT AREA

Ngor Okpala is a local government area of Imo State, Nigeria, its

headquarters is in Umuneke Ngor. It has an area of 561km 2; it has a
population of 159,932 at the 2006 census. It is a notable place in Imo
State because of the LGA’s locational position. It connects Abia and Rivers
States of Nigeria.

The postal code of the area is 460. There are many communities in Ngor
Okpala, they include, Umuowa, Obiangwu, Ntu, Alulu, Amala, Oburu,
Obokwe, Eziama, Ohakelem, Nnorie, Umuhu, Ihite-Okwe, Obike, Elelem,
Umuohiagu, Umuhu, Imerinwe, Nguru-Umuaro, Orishieze, Upe,
Umuekwene, Logara, Umukabia-Ogodo and many others.

Imo Airport officially called Sam Mbakwe International Cargo Airport is

situated in Ngor-Okpala with its business Junction at Umuowa along Owerri
Aba road.

Ngor Okpala is one of the fastest developing local government in Imo

State. The LGA is blessed with natural and mineral resources which have
not been fully tapped.

In Ngor Okpala is a popular town of Okpala. Okpala is one of the vilages.

Ama-Asaa, due to the popularity of the name it takes over the name “Ama-
Asaa” “Okpala Junction”. Okpala the central of the seven vilages has four
kindred which include Amankwu, Amaube, Amanwaebo, Umuokereke, and
Umuodah.

1.2 STATEMENT OF THE PROBLEM

Financial control in the local government administration is faced with

problems which are stated below:

1. Poor keeping of internal accounting record.

2. Failure to understand the financial regulation and instruction.
 3. Use of expenditure in excess of authorization.
4. Lack of effective internal control and audit system.
5. Not paying adequate attention to the collection of debits and
revenues it is in the light of these problems that the researcher sets
out to analyse the problems in other to find solution.

1.6 OBJECTIVES OF THE STUDY

The main objective of the study is the Appraisal of the financial control
tools in local government administration. The specific objectives of the
study are:

1. To ex-ray the financial control of the mechanism in the public sector.

2. To appraise the adequacy of the financial controls.
3. To find out whether the staff works in line with the laid down
financial rules.

1.4 REEARCH QUESTIONS

The following questions were put forward to guide the study.

1. To what extent do the audited financial report and internal control

assist the local government administration.
2. How does local government administration adopt the concepts of
auditing and sound financial control system.
3. How do the local government make use of financial control tools in
decision making.
4. To what extent do financial controls help in effective management of
the local government.
1.5 RESEARCH HYPOTHESIS

Ho: The local government do not make use of financial control tools in
decision making.

Hi: The local government make use of financial control tools in decision on
making.

Ho: The audited financial report and internal control do not assist the local
government administration.

Hi: The audited financial report and internal control assists the local
government administration.

1.6 SIGNIFICANCE OF THE STUDY

The study will assist the local government chairman and the entire
management staff to be aware of increasing need and usefulness of
financial control system. It will also serve as reference materials to those
who would be conducting research in the same subject matter or topic.

It will assist the general public to understand financial control tools in the
local government Administration.

The study will help the organization which does not have any idea of a
financial control to start initiating them into practices.

1.7 SCOPE OF THE STUDY

The scope of this study is restricted to Ngor Okpala local government area
including impact of accountant general’s office in the government.
It will still look into the government sources of funds and how theyare
expended in the expenditure procedures and control involving line of
authorization within the local government.

1.8 LIMITATION OF THE STUDY

1. lack of Time: Often deadlines are reason why your study and research
might not be complete. When we get a task, we have a limited amount of
time to do it. To get a good grade, we need to submit the assignment prior
to the deadline.

2. Financial resources: Sometimes we need some equipment or additional

software to conduct the research. This might be a problem since we don’t
always have the sum we need.

3. Data Collection: There are different ways to collect data; interviews,

surveys, questionnaires, etc. the way you collect data might be a real
limitation since the answers and the results vary.

1.9 DEFINITION OF TERMS

1. Budget: A budget is a financial statement of the total estimated revenue

and the proposed expenditure of an entity with a given period of time
usually a year.

2. Accountability: Accountability is an assurance that an individual or an

organization will be evaluated on their performance or behavior related to
something for which they are responsible.
3. Financial Control: Financial controls are the procedures, policies, and
means by which an organization, monitors and controls the direction,
allocation, and usage of its financial resources.

4. Government: This is a political organization comprising the individuals

and institutions authorized to formulate public policies and conduct affairs
of a state.

5. Internal Control: Internal control, as defined in accounting and auditing,

is a process for assuring achievement of an organization’s objectives in
operational effectiveness and efficiency, reliable financial reporting and
compliance with laws, regulations and policies internal control involves
everything that controls risks to an organization.

6. Government Finance: Government Finance is the deliberate manipulation

of revenues and expenditures of the government. It is the financial plan of
the government.

7. Administration: Administration is defined as a process of mapping out a

procedure to do something and then carrying people along in order to
achieve the stated objective depending on the lasted procedures.

8. Local Government: This is a termed as third tie of government, which

helps to educate the rural areas on the operation of the government.
CHAPTER TWO

LITERATURE REVIEW

2.1 Conceptual Review

This institution of local government has long been in existence in Nigeria

and any other part of the world, but mode of operation and the
nomenclature differ from one’s political system to the other. Hence, most
writers on local government pay little attention to the issue of its definition.
This, however, does not allow for uniform agreement on the definition of
the concept. The absence of mutually agreed definition may not be
explained as arising from vegueness of the idea conveyed by the concept
but more significantly because of the series of postulations regarding the
reason for the existence and objective/purpose of local government
(Marcellus, 2009). Hence, public administrators and scholars have tried to
define it to suit their perception and purpose.

Local government as a form of decentralization can be viewed from two

perspective, which are de-concentration and devolution. When a local
government is seen as de-concentration or local administration, it lacks the
financial autonomy on its budgetary decision, most of the key officials of its
administrative machinery are appointees of state or central government
and are accountable to it and for most of the period of its existence do not
have council that is democratically elected by the people at the local level.
For many year’s especially before 1976 local council in Nigeria were runs as
a mere administrative outpost of the regional (later states) and federal
government. In this arrangement local government were merely
appendage of superior level and local administrative units. This means that
those who exercise power under this system were serving higher superior
authorities either state or central government. Thus, there was no
autonomy to enable officer to be innovative and creative. This was the
state of local government in Nigeria before 1976 reform and under the
recent democratic dispensation where some state operates a caretaker
committee system as against the democratic elected council that was
recommended by 1976 local government reform.

Devolution however refers to decentralization of both political and

administrative powers. So, while local administration refers to purely and
only administrative aspect, local government refers to both political and
administrative capabilities. In short, whereas the former lacks initiative, the
later has it. Local government in this regards can be seen, as that unit of
administration with defined territory and power as well as administrative
authority with relative autonomy.
Local government administration in Nigeria has undergone series of
metamorphosis. The system has been restructured and recognized
depending on the regime in power either military or civilian administration.

An effective local government administration rests majorly on the

availability of human and material resources which the nation could
mobilize and harness for local governments development. In 1976, the
federal military government then issued guidelines on local governments
reforms. The reforms which gave recognition to local governments as the
third tier of government whereby government activities at the local level
were taken care of. In 1988, another reform of local government was
established this gave a substantial and unprecedented reform of autonomy
to the local governments in the country. With this autonomy, greater
responsibilities centers on the local government therefore, became a
common knowledge that most of the local government are finding it
difficult to cope with the present level of responsibilities.

According to Akpan (2008), Local government administration refers to the

breaking down of a country into small units or localities for the purpose of
administration in which the local inhabitants of different units or localities
concerned play a direct and full part through their elected representatives
who exercise power or undertake functions under the general authority of
the national government.

ROLES AND RESPONSIBILITIES OF LOCAL GOVERNMENT AREAS

The fiscal federalism approach treats a local government area as a

subordinate order in a multi-tiered system and outlines principles for
defining the functions or responsibilities of the different tiers of
government. Available literature provides a normative framework for
assigning responsibilities to local government (Sabari, 2003). The
assignment of public services to local metropolitan or regional governments
can be based on considerations such as economics of scale, economics of
scope, cost benefit, spill over, proximity to beneficiaries, consumer
preferences, and budgetary choices about the composition of spending. In
Nigeria, the roles and responsibilities of local government areas as
enshrined under section 7(5) of the 1999 constitution of Nigeria provides
as follows: the functions to be conferred by law upon local government
council shall include those set out in the fourth schedule to this constitution
which are as followed: the economic development of the state, particularly
in so far as the areas of authority of the council and the state ae affected,
and proposals made by the said commission or body, collection of rates
and licenses, establishment and maintenance of roads and other public
facilities as may be prescribed from time to time by the House of Assembly
of a state.

GOVERNMENT FINANCIAL REGULATION

Government financial regulations are a body of rules designed to achieve

probity and accountability in government. Example of the rules deal with
the opening of bank accounts, cheques and the collection of revenue.
Financial regulation define the duties and responsibilities if finance officers
of government (Okwoli, 2004). Financial authorities are the legal
instruments that empower and guide all public officers in carrying out
government financial transactions. Such financial transactions include the
receipt, custody of and accounting for government revenue; the
procurement, custody and utilization of government stores and assets, and
the disbursement of funds from the major government funds. These
mechanisms are embedded in the financial regulations.

In Nigeria, the mechanisms are embedded in the 1991 Revised Financial

memoranda for local Government. The financial memorandum stipulates
the generation and judicious management of funds for the benefits of the
entire community. Buhari (2001) defined “Financial Regulation” as the
process of ensuring the cash and other financial resources of government
are in accordance with the legislation, regulation and accounting manual
which constitute legal and administrative framework of a particular entity.

Anayofo (2004) defined financial regulation as a process of assuring that

cash is used properly and for authorized programmes that involves
observation and measurement by comparing actual performance against
the planned and correcting variances.

According to Adamolekun (2003) the local government versions of financial

regulations are the financial memoranda. According to the author, the
objective includes: professionalization of civil service, decentralization and
delegation of authority, accountability and probity in government and
enhancement of effectiveness, efficiency and speed of operation.

In view of the above, financial regulation is very important in an

organization’s operations because it is concerned with the steps taken to
ensure maximum safe custody of financial resources, adhering to financial
regulations also helps to become financial discipline. Financial discipline is
the judicious allocation of utilization of scarce resources to ensure that
benefits accrue from any activities undertaken. It focuses on ensuring that
funds are only expanded on activities (projects) from which benefits
accrue. The essence of financial discipline is to ensure accountability and
prudent utilization of scarce financial resources. Without a discipline
financial set-up, businesses are bound to fail. Financial discipline entails the
following; prudence in spending, ensuring proper expenditure regulation,
blocking all leakages and eliminating all sorts of malpractice associated
with funds management, ensuring value of money, accountability, strict
adherence to budget, review of budget and financial allocation from time to
time (Johnson 2006; Damagun 2003; & Sani, 2009).

FINANCIAL ESTIMATES REGULATION FOR LOCAL GOVERNMENT

ADMINISTRATION

Financial estimates regulation are statement of the objective of the local

government’s working plan for the year. The activities of the local
Government must be conducted with the financial framework prescribed by
the estimates, as they are approved, unless and until supplementary
estimates are approved which vary the original framework. As the
estimates are financial plan of action for the year. The formal approval in
accordance with the provisions of the law is the legal sanction for the
expenditure envisaged by the estimate. Any expenditure must be covered
by a provision in the annual appropriation estimates, failing which it is
unlawful. Having established a financial framework for action, the
estimates are then to be used as a mechanism for ensuring that adequate
controls are maintained over expenditure and revenue. Because the local
Government accounting system is organized in the heads and sub-heads of
the estimates, when the amount spent under any sub-head gives an
indication of being likely to exceed the approved estimates, the control
arrangements must be such that prompt steps are taken either to obtain a
supplementary authorization, or to contain the approved estimates. The
estimates must reveal, taking the expenditure and revenue figures
together, the estimated financial position of the local government at the
beginning and end of the appropriate financial year, on the assumption
that revenue and expenditure procee on the basis set out in the estimate.
This enables the soundness, or otherwise, of the financial position of the
local government to be gauged. The estimate must be realistic and be a
function of expected revenue profile of the local government councils. In
line with this, Anyanwu (2007) points out two (2) main instruments of
financial management in the local government are as follows:

 Budgeting
 Auditing

Budgeting is the nerve centre in the management of financial resources in

both public and private organization. A budget is a financial plan that
shows in detail the proposal estimate of revenue and expenditure for a
defined period, usually one year (Onah, 2005; Adamolekun, 2003). Budget
estimate is achieved in the local government by means of annual
estimates which are attainable.

Budgetary regulation can be said to be the process of comparing results

with budgeted or planned results and reporting on the variations.
Budgetary regulation is concerned with set target with the aim of putting in
place corrective measures that will ensure the actual result achieved are in
conformity with the planned or budgeted results (Lekarchman, 2007 and
Mueller, 2008).

Budgeting and Budgetary regulation is another means of managing and

controlling local government finance in Nigeria. An effective budgetary
regulation mechanism ensures the existence of a sound financial planning
and regulation which is a pivotal for sustainable growth and development
in Nigeria especially at the grassroads.

Auditing is an independent examination of, and the expression of an

opinion on the financial statements of an enterprise by an appointed
auditor, in accordance with his terms of engagement and the observance
of statutory regulations and professional requirements (Danaago, 1990)
and (Mainoma 2007). This definition clearly stated that there must be
someone (auditor) responsible for expressing an opinion on the entire
financial statement of an enterprise. The auditor should be approved and
must have personal and operational independence in order to perform his
duty effectively.

REVENUE COLLECTION PROCEDURE IN LOCAL GOVERNMENT

ADMINISTRATION

The amount of money to be collected as revenue depends on the

assessment and allocation machinery. One thing is to know the sources of
revenue; another thing is the ability to collect revenue appropriately and
effectively. The organ charged with the responsibility of collecting and
mobilizing revenue in the local government is the finance department
headed by the treasurer. It is stated clearly in the financial memoranda
that the finance department is to see that all revenue due to the local
government are collected promptly and properly paid into the local
government bank account.

The term revenue has been defined by various authors in different ways.

Adam (2004) defined revenue as the fund required by the government to

finance its activities. These funds are generated from different sources
such as taxes, borrowing, fine, fees etc. it is also defined as the total
amount of income that accrues to an organization (public or private) within
a specified period of time (Mueller, 2008).

The revenue collection procedures are concerned with the guideline set up
to ensure the collection of revenue of governments through properly
identified sources, the proper monitoring of such collections and ensuring
that collected revenues are accounted for properly. The process is initiated
through the finance bill which is the request to parliament by the executive
to seek authorization for the collection of annual revenues from identified
sources.

FINANCIAL STATEMENT PROCEDURE IN THE LOCAL GOVERNMENT

ADMINISTRATION

Financial report are the document and records put together to track and
review how much money is received and expended for purpose of
administration. According to the federal government of Nigeria (2009),
long-term financial plan developed and adopted for the purposes of section
122(19) of the act must include (a) estimated financial statements with
respect to the period of the long-term financial plan, which must be
presented, other than notes and other explanatory documentation in a
manner consistent with the model financial statements; and (b) a summary
of propsed operating and capital investment activities presented in a
manner consistent with note in the model financial statements entitled
uniform presentation of finance; and (c) estimates with respect to an
operating surplus ratio, a net financial liabilities ratio and an asset
sustainability ratio presented in a manner consistent with the note in the
model financial statements entitled financial indicators.

All local government must prepare and submit to the office of the auditor-
general for local government annual financial statements. The financial
statements must be submitted within three months of the following year.
The financial statements must be submitted within three months of
following year. The financial statements consists of the following
statements of assets and liabilities, revenue and expenditure, actual
revenue, actual expenditure, advance account balances, statement of
suspense account balances, statement of reserve fund account balances
and statement of external loans outstanding.

2.2 THEORETICAL REVIEW

Managers use series of control methods and systems to deal with differing
problems and elements of their organizations. The methods and system
can take many forms and can be intended for various groups. However,
financial statements provide insight into an organization’s performance and
long-term prospects. (Stoner, Freeman and Gillbert, 2003) Financial control
focuses on finding the best operation decisions. Financial control focuses
on an overall assessment of how well operations control is working to
improve financial performance. Financial control information singles when
operations control is not working well and, hence, needs to be evaluated
and improved. There are useful tools for financial control, they are
budgetary control, statement of cash-flow, financial ratio and Accounting
system. If actual performance is different from their forecast once the
budget variance is discovered, the last two steps of budgetary control can
then be taken in order analyzing the causes of the variance and taking the
appropriate course of action to connect the situation.

BUDGETARY SYSTEM OF LOCAL GOVERNMENT ADMINISTRATION

The statement of cash flows shows the cash inflows and cash outflows
from operating, investing, and financing activities.

Statement of Cash Flow: Summary of an organization’s financial

performance that shows where cash or funds came from during the year
and where they were applied (Stoner, Freeman, and Gilbert, 2003).

Financial statements are used to track the monetary of goods and services
into and out of the organization. They provides a means for monitoring
three major calculates various financial ratio using his accounting records
to help him gauge the returns and risks of the company. He uses these
ratios to gain a better insight in to the financial performance and stability
of the company. Ratio analysis involves the selection and interpretation of
relationships among various balance sheet and income statement items at
a given point in time.

Besides budgets, there are other accounting and financial concepts and
techniques which are used as control devices. These include responsibility
accounting, cost accounting, standard cost approach, and direct costing
and ratio analysis. Cost accounting helps to provide information and control
costs. This approach deals with detail analysis of cots and show the cost of
providing particular product and operating particular departments. Cost
accounting uses standard costs as a meansure in its approach. Standard
costs are estimates for each product prior to production and after
production they are compared against actual costs. Thus, they save as
control devices. Analysis through the use of ratios are also utilized by
managers as control mechanisms.

ACCOUNTING SYSTEM OF THE LOCAL GOVERNMENT ADMINISTRATION

Accounting system is a set of records and the procedures and equipment

used to perform the accounting functions. Manual system consists of
journals and ledgers on paper. Computerized accounting systems consist of
accounting software, computer files, computers, and related peripheral
equipment such as printers.

a. Annual Administration Report

The major shall, as soon as possible after the close of each financial year,
prepare a detailed report of his administration during the previous year,
with a statement showing the nature and amount of receipts and
disbursements on accounts of the local government fund during that year.
Such report and statement shall be submitted to the council with any
resolutions and may be passed there on by the council and shall be date,
when the same were first submitted to the council.

b. Audit of Accounts

The Accounts of every local government administration shall be sudited by

the auditor-general or by such officer as may be authorized by him, and he
or they shall maintain a continuous audit of such accounts for the purpose
of any audit and examination or accounts under this ordinance, the auditor
or auditors appointed by or under section 219 may be summons in writing,
require the production before him or them of all books, deeds, contracts
vouchers and other document and the papers which required they may
deem necessary and may require any person holding or accountable for
any such books, deeds, contracts, account vouchers documents or papers
to appear before him or them at any such audit and examination or
adjournment thereof, and to make sign a declaration with respect to the
same. The Auditor or Auditors submit a monthly report their audit to the
council and shall also submit an annual report of audit to the council and a
duplicate of such annual report to the minister as soon as possible after the
close of the financial year.

2.3 EMPIRICAL REVIEW

The study assessed the extent of local government financial management

impact on effective and judicious use of public financial resources; the
influence of financial planning and regulation on quality delivery of public
services’ and the practice of public financial management in local
government administration to enhance transparency and accountability in
the use of public financial resources.

Adiogu (2013) carried out a study to ascertain the effects of accountability

and transparency in financial management of Nigerian Local government.
The objective of the study was ascertain whether accountability and
transparency has put to check the circumvention of due process in financial
and non-financial activities of the local government council in Nigeria. The
study also reviewed the influence of execution of financial conventions on
revenue utilization in local government areas and Nigeria’s experience of
level of voluntary compliance.

SUMMARY OF LITERATURE REVIEW

An extensive review of related literature on the extent of compliance with

government financial regulation in local government administration was
carried out. The review covered the following areas; local government
which is a political subdivision of the Federal Government System which is
constituted by law and has sub-national control of local affairs including the
power to impose taxes or to extract forces for prescribed purposes: Local
government administration which is concerned with the determination of
the corporate policy, the coordination of finance, and operational
performance of routine office tasks, usually internally oriented and reactive
rather than proactive. The literature revealed that in the local government
administration, administrators are those saddled with the responsibility of
managing both human and material resources in order to improve the
people’s standard of living.
The literature reviewed showed that financial regulation are a body of rules
designed to achieve probity and accountability in government. Examples of
rules deal with the opening of bank accounts, cheques and the collection of
revenue.

Financial regulations measures are contained in the 2009 Revised Financial

Memoranda of the Federal Republic of Nigeria. It was also revealed from
literature that financial estimates regulations have been established to
include the planning and controlling of organizational finances towards the
attainment of stated objective. Budgeting and Auditing was the two main
instruments of financial estimate. The authors reviewed argued that
revenue collection procedures provides guidelines on how revenues are
collected and utilized for proper accountability and how to collect from
different sources such as taxes, borrowing, fine, fees and allocation from
the federal government. Furthermore, literature revealed that the
procedures for expenditures made on the procurement of goods, salaries,
and for the day-to-day running of the council’s affairs; and financial
statements, are important means of demonstrating how the public sector,
both at individual level and government level meets its financial
management responsibilities.
CHAPTER THREE

RESEARCH METHODOLOGY

This chapter deals on the procedures adopted in this research work. The
researcher made use of unique data gathering techniques such as
questionnaires and oral interviews. These techniques specifically relate to
the specific nature of the subject matter. The researchers believe that
ordinary classroom works and reading textbooks, Journals and other
periodical would not be enough to achieve a thorough and standard
solution to the problem at hand. Thus, the researcher decided to use some
special method that will help them find solution to the problems and arrive
at purposeful research findings.

3.1 RESEARCH DESIGN

The research design for this study is survey research method. Survey
research method is used for gathering the data from the sample drawn
from the population.
Questionnaires were administered to respondents and necessary
information collected. Moreover, the design serves as a plan presenting the
method that will be applied in the entire study.

3.2 POPULATION OF THE STUDY

Population of this research is the totality of all elements or items study for
this research work. Thus, the population of this study covers the staff of
Ngor Okpala Local government area. When the study was carried out, the
researcher found out that the population of the staff was 200 and out of
200 questionnaire distributed, 133 were returned while 67 were not
returned.

3.3 SAMPLE/SAMPLING TECHNIQUE

Sample can be viewed as a portion of element from the total population.

Yaro Yamane method will be used in the determination of the sample size
using the method is as follows:

n = n + N(e)2

OR

1 + N (E)N

Where:

n = Sample size
N = Total population size

E = Significant Level of error (0.05)

1 = Constant level

Therefore:

n = 200

1 + 200 (0.05) 2

n = 200

1 + 200 (0.0025)

n = 200

1 + 0.5

n = 200

1.5

n = 133

From the population of 200, sample size of 133 was for data analysis.

3.4 METHOD OF DATA COLLECTION

The researcher makes use of primary and secondary sources of data and
these sources are discussed below.

1. PRIMARY DATA: This is the data collected by the researcher afresh

for the first time for a particular statistical investigation. This sources
 has a high degree of reliability. It include Questionaires, oral
interview and observation.
2. SECONDARY DATA: This is a second hand information gotten from
figures initially collected by another person. It is less reliable than
primary. An example of this source used in this project is Textbook,
Journals, Newspapers, Magazines, unpublished works of other
researchers.

3.5 METHOD OF DATA ANALYSIS

In analyzing and presenting the data collected, the researcher employed

the use of tables and simple percentage while Analysis of variance
(ANOVA) was used to test the hypothesis formulated.

Analysis of variance (ANOVA) is a statistical technique for determining the

existence of difference among several population means.

The formular for ANOVA as derieved by Sir R.A Fisher in the 1920’s is given

Thus;

F = MSTR

MSER

Where;

F = Anova Co-efficeint/Ratio

MSTR = Means Sum of Square due to treatment

MSER = means sum of square due to error

The following steps are involved in arriving at F – value above.

1. Calculate the correction term (C.T)

CT = (GT)2

Where GT = Grand Total

N = Total No of observation (NXK)

2. Calculate the total sum of square (TOSS)

TOSS = ΣΣX12 - C.T

Where ΣΣX12 = the summation (total) of the sum of square of the X

values.

3. Calculate the treatment sum of square (TRSS)

TRSS = Σ (ΣX1)2 - C.T

Where Σ (ΣX1)2 = the summation of the square of the total of X values

n = sample size for groups.

4. Estimate the Error Sum of square (ERSS)

ERSS = TOSS – TRSS

5. Set up ANOVA table

Sources of DF Sum of Mean sum of F – values

variation Square square
Treatment K–1 Σ(ΣX1)2 - CT TRSS MSTR
DF MSER
Error K(n-1) TOSS – ERSS
 TRSS DF
Total N–1 Σ(ΣX1)2 - G

K = No of Group

N = Total Number of observation

DF = Degree of Freedom

The analysis of variance = it is derived by dividing the treatment mean

square by the error mean square.

F – value = MSTR

MSER

The calculated F – value is then computed with the tabulated F – value.

F – table = F : df

Where = level of significance

df = degree of freedom = (K – 1); K(n – 1)

Decision rule

1. If the F – calculated value is less than the F – tabulated we accept

the Null Hypothesis Ho
2. If the F – calculated value is greater than the F tabulated we reject
the Null hypothesis Ho

Decision Rule
CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND INTERPRETATION

4.1 DATA PRESENTATION

In this chapter, the data collections are presented, analyzed and

interpreted using tabular form and simple percentage analysis method,
which is aimed at identifying the distribution of responses to each question.

The rate and response were generally encouraging out of Two hundred
(200) persons were interviewed, one hundred and thirty-three (133)
respondents returned and sixty-seven (67) respondents did not return their
questionnaire.

SECTION A

Responses Frequency Percentage

Managers 15 11.28%
Accountants 2 1.50%
Decision makers 2 1.51%
Senior staff 45 33.83%
Junior staff 69 51.88%
Total 133 100%

From the above table out of 133 respondents, 15 of them are managers, 2
accountants, 2 Decision makers, 45 senior staff and 69 Junior staff in the
organization.

4.2 DATA ANALYSIS

Question 1: Do the local government make use of financial control tool in

decision making?

Table 4.2.1

Responses Frequency Percentage (%)

Agreed 100 75
Disagreed 0 0
Undecision 33 25
Total 133 100
Source: Field Survey, 2020

The above table shows 75% of the respondents agreed that the local
government make use of financial control in decision making, 0%
disagreed while 25% were undecided.

Question 2: Do the local government administration audit financial report

and internal control?

Table 4.2.2
 Responses Frequency Percentage (%)
Agreed 110 82.71
Disagreed 8 6.02
Undecision 15 11.27
Total 133 100
Source: Field Survey, 2020

The above table revealed 82.71% of the respondents agreed that the local
government administration audit financial report and internal control,
6.02% disagreed while 11.27% were undecided.

Question 3: Is there a system of internal control in the local government?

Table 4.2.3

Responses Frequency Percentage (%)

Agreed 69 51.88
Disagreed 10 7.52
Undecision 54 40.60
Total 133 100
Source: Field Survey, 2020

The table above shows that 51.88% of the respondents agreed that here is
a system of internal control in the local government, 7.52% disagreed
while 40% were undecided.

Question 4: Do the local government adopt the concept of auditing and

sound financial control system?

Table 4.2.4

Responses Frequency Percentage (%)

Agreed 107 80.45
Disagreed 20 15.4
Undecision 6 4.5
 Total 133 100
Source: Field Survey, 2020

The table above shows that 80.45% of the respondents agreed that local
government adopt the concept of auditing and sound financial control
system, 15.04% disagreed while 4.51% were undecided.

Question 5: Do financial controls help in effective management in the local

government?

Table 4.2.5

Responses Frequency Percentage (%)

Agreed 120 90.23
Disagreed 5 3.75
Undecision 8 6.02
Total 133 100
Source: Field Survey, 2020

The table above shows that 90.23% of the respondents agreed that
financial control helps in effective management in the local government,
3.75% disagreed while 6.02% were undecided.

4.3 DATA INTERPRETATION

Testing of Hypothesis

Statistically the hypothesis table which relevant to issues reason on the

hypothesis was utilized.

Using Observed Frequency table Q1, Q2, Q3 & Q4

Table 4.3.1

S/N Agreed Disagreed Undecided Total

Q1: Do the local govt makes 100 Nill 33 133
use of financial control in
decision making?
Q2: Do the local govt. 110 8 33 133
administration audit financial
report and internal control.
Q3: Is there a system of 69 10 54 133
internal control in the local
government
Q4: Do the local government 107 20 6 133
adopt the concept of auditing
and sound financial system
ΣX 386 38 108 G.t
2
ΣX1 38310 564 4266 4314
N = n x k = 3 x 4 = 12 Row x column

1. Compute the correction Term (C.T)

CT = (GT)2 = (532)2 = 283024

N 12 12

CT = 23585

2. Compute the total sum of square (TOSS)

TOSS = ΣΣX12 - CT

= 43140 – 23585

TOSS = 19555

3. Compute the treatment sum of square (TRSS)

 TRSS = Σ(ΣX1)2 - CT

3862 + 3822 + 1082 - 23585

= 162,104 - 23585

= 40526 – 23585

TRSS = 16941

4. Compute the Error Sum of Square (ERSS)

ERSS = TOSS – TRSS

= 19555 – 16941

= 2614

ANOVA TABLE

Source of Degree of Sum of Mean of square F – values

variation freedom square
Treatment 3-1-2 19555 19555 = 9778 9778
2
Error 3{4-1} = 9 2614 2614 = 290 2614
9
Total 12 – 1 = 11 = 33.72

F = tabulated = F.., df
DF = (K – 1), K(n – 1)

F – tab = F …. 0.05, (K – 1), K(n – 1)

If F-cal > F-tab reject Ho

Therefore,

F-tab = F0.05 (3-1); 3(4-1)

= F0.05; = 2, 9 = 4.26

Therefore, F – Cal = 33.72

F – Tab = 4.26

Decision Diagram

Decision

Since F – calculated of 33.72 > F – tab of 4.26, we therefore reject the Null
hypothesis and accept the alternative (Hi) and conclude that there is
efficient use of financial control in Ngor Okpala Local government.
CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 SUMMARY OF FINDINGS

This project was carried out to determine the appraisal of financial control
tools in the local government administration. And careful presentation,
analysis and interpretation of data in the following fact were brought to
light.

1. It was discovered that there is a system of internal control in the

local government.
2. The local government makes use of financial control tools in decision
making.
3. The local government adopt the concept of auditing and sound
financial control system.
4. The financial control helps in effective management in the local
government.
5. The local government administration audit financial report and
internal control.

5.2 CONCLUSION

Conclusively, it is clear that there is a system of financial control in Ngor

Okpala Local government area Imo State. However, it is likewise seen that
the system is grossly inadequate.

There is no doubt of accounting, budgetary and auditing failure in the local

government. Delay in publishing financial reports hampers accountabilityas
often. There are no bases of assessing performance of individual workers
as well as their various units in the local government administration.

5.3 RECOMMENDATIONS

To remedy the inadequacy of the financial control of the local government

administration, the following actions are recommended by the researcher:
 Review of the internal control system:- There is need to install a
sound system of internal check. Duties should be properly
segmented, clearly defined and assigned to different person/units,
such duties includes; Authorization, Disbursement and Recording.
 Recruitment and Training:- It is recommended that the director of
personnel shall ensure that qualified workers do jobs they re qualified
to do, it may involve recruiting new workers who are versed in
accounting and other fields relted to management of public fund. A
qualified or chartered accountant should be employed to head a
strategic department unlike the internal and it unit. It will enhance
general performance and guarantees are liability on government
information. The local government should organize workshops,
seminars at intervals to prove on the job training for all members of
the relevant legislation and other changes in accounting techniques.
 Review of the Law:- There is need to educate the workers on the
provision on the law; some of the laws (E.g) the civil service reforms
concentrated on the director of financial and supplied (DFS).
The commissioner should from time to time make sure that there is
compliance with relevant Legislation and other internal guides (E.g)
Government accounting code and manual.
REFERENCES

Abada, I.M. (2007). Local Government Autonomy in Nigeria; An appraisal

Journal of International Politics and Development Studies 3(1), 78-93.

Adamolekun, L (2003), Public Administration: A Nigerian and Comparative

Perspective. York: Longman Inc

Adams, R.A. (2002). Public Sector Accounting and Finance, 3 rd ed. Lagos:
Corporate Publishers Ventures.
Adams, R.A (2004). Public sector Accounting and finance, 2 nd Edition: yaba,
Lagos Nigeria Corporate Publishers Ventures.

Adeyemo, D.O (2010), Optimizing local government finance through public-

private-partnership in grassroots development. Paper presented at National
workshop on the local government structure and potentials for socio-
Economic Development, Ibadan, 28th – 30th July.

Adiogy, C.J (2013). The effects of accountability and transparency in

financial management of Nigeria local government (A case study of Bende
local govt.) An unpublished master’s thesis of the Department of
Accountancy, Faculty of management and social science Caritas University,
Amorji Nike Enugu.

Agba, M.S Ogwu, S.O & Chukwurah D.C (2013). An Empirical Assessment
of Service Delivery Mechanism in Idah local government Area of Kogi State,
Nigeria (2003-2010). Mediterranean Journal of social sciences, 4(2), 621-
635

Agi S.P.I (2002). Local govt. as a third tier of govt administration and
grassroot democracy in Nigeria, Calabar: University of Calabar Press.

Akpakpan, B.A (2002) An Introduction to Auditing and Investigation

Nigeria: Publishing Co. Kaduna.
 APPENDIX
Department of Accountancy,
Imo State Polytechnic Umuagwo,
P.M.B 1472 Owerri,
Imo state.

Dear Respondents
 I am a student of the above named institution in
department of Accountancy, I am carrying out a research study
on the topic An Appraisal of financial control Tools in the local
Government Addministration, with a particular reference to your
organization. As a requirement for the award of Higher National
Diploma (HND).

I promise to treat your responses or the information

provided with confidential as it is for academic purpose.

Thanks for your co-operation

Yours faithfully

Onukafor Goodness C.

APPENDIX 11

QUESTIONNAIRE

Please tick [ ] where appropriate

SECTION A

1. Name: ……………………………………………

2. Gender: Male Female

3. Marital Status: Single Married

4. Position held?

a. Manager

b. Accountant

c. Frontline Manager

d. Senior Staff

e. Junior Staff

5. Length of working experience?

a. Under 5 years

b. 6 -10 years

c. 11 – 15 years

6. Age of respondents

a. 21 – 25

b. 26 – 30

c. 31 – 35

d. 36 – 40

e. 41 – above

7. Educational Qualification

a. OND/HND
b. Bsc

c. MBA/Phd

d. Others

8. Staff Position

a. Senior staff

b. Junior staff

SECTION B

9. Is there a system of internal control in the local government?

Yes No

10. Do the local government make use of financial control in decision

making? Yes No

11. Do the local government adopt the concepts of auditing and sound
financial control system? Yes No

12. Do the financial controls help in effective of the local government?

Yes No

13. Do the local government administrations audit financial control and

internal control? Yes No