ACCOUNTING SYSTEM AND EFFECTIVE MANG. OF LOC. GOVT

Abstract

CHAPTER ONE
1.1 INTRODUCTION
Accounting is a process of identification, selecting and analysis the measurement processing, evaluation and communication of financial information to facilitate the decision regarding activities and resources. The word accounting basically categorize in to two types which include:
A. Social or government accounting.
B. Enterprises accounting.
The social accounting or government accounting it would deal with control and stewardship of receipt and payment. The related activities in the public sector, to do so is a peculiar nature of social or government accounting transaction makes it desirable and mandatory to treat them in accordance with specific principles but cohesive and measurement of standardized rules and regulations.
There is need to seek for formal procedures for approval on the estimated revenue and expenditure to be incurred before the conversion of the budgeting which largely determines the structure of the government accounting.
It is a fact to mention that the federal, state and local government suitable found it necessary to demo crate and segregate sometimes, its resources into specific special purpose compartment receipt and payment and the procedures of accounting adopted in regarding and measuring each compartment it referred as fund accounting.
The peculiarity of this system is maintained on cash basic. Therefore this system provided a satisfactory approach on matter of stewardship accounting and cash programming accordly.
In view of the balance sheet which is monthly reconciliation of accounts to show whether surplus or deficit statement is regard to the assets and liabilities in the local government the information does not contain of the physical fixed assets such as freehold premises plant and machinery, building and so on, on the misconduct of the people whether means the fixed assets are not properly account for, in the accounting principles of assets, the local government specifies register which are kept on permanent basis for the purpose of controlling fixed assets and register are known as plants register or inventory records.
In view of all the social or government accounting is mainly concentrates on the measurement of al social or government accounting activities carried out in the public sector with a view determining the efficient and effective utilizations of the resources in the provision of social services for the members of the society, while the enterprises accounting concerned with the measurement of economic events and conditions with a view to determining the profit or loss of a given organization.
The differences that coexist between the social and enterprises that government spends two or more millions of naira on road construction and reliabilities on project for the well being welfare of its citizens, it will be embarrassed to say that the values of the road should be and entered as an assets in the balance sheet of local government while the enterprises accounting is that for example, if a warehouse for manufacturing purpose such expenditure will considered as an assets in the balance sheet of the company i.e. if the company is to fold late, the warehouse will be offered for sale.
1.2 BACKGROUND OF THE STUDY
Nguru local government was established in 1976 out of the defunct of Borno state native authority in keeping with the recommendations of the 1976 local government reforms, long before this period, the town was enjoying the status of a distinct head quarters with some of the basic socio economic intra structures already in place, as can back as 1960s. the extensive of the railway line from Kano to Nguru town contributed immensely in urbanizing the area. Free interaction with Kano city helped in on small measure as also did the rapid growth of trade and other commercial activities among the local inhabitants.
According to the census figures, Nguru local government has a population of about 137,402 made up of 71,181 males and 66,221 females. The Mangawa are the predominant tribes followed closely by the Hausa Fulani and other ethnic groups. Hausa language is widely spoken in Nguru town but Kanuri predominate in the rural area.
Subsistence agriculture and commerce are the two major occupations of the communities followed by cattle holdings. A part from rainy season farming, the communities also participate in rice and wheat production by means of irrigation along the Hadejia river basin which passes through the area. Millet, guinea corn, groundnuts and beans are abundantly produced.
The major market of the local government includes Nguru, Balanguwa, Jajimaji, Jajeri, Wachakal and Karasuwa. Because of its high level of urbanization, large scale trade flounshes in all the markets. Shopping centers exist displaying a variety of infrastructural in the local government includes a stadium, on abattoir and motor parks in addition to cinema halls, hotels and motel stabilized by private individuals. All business ventures such as transportation, cinema, printing press etc are to be run in exactly the same way as private enterprises. The accounting requirement is similar to that of private commercial firms, and the accounts have to be kept separate from those of local government main account.
Below is an attempt to discuss carefully the revenue potentials of some of the commercial service that may be rendered by the local government.
Markets: Nguru local government as earlier mentioned has the following major markets established in its area of jurisdiction. They are stated below with their revenue capacity per week.
This table shows that the 6 major markets have the capacity of generating N2, 784,000.00 annually. Going by the current speculation that actual remittance is by far below the amount realized, the local government can realized a lot from the market operation.
Decisive steps must be taken therefore not only to ensure total collection and total remission but also a radical over haw of the machinery of collection. If this is done, Nguru local government, can earn up to N5 million from markets alone per annum.
1.3 STATEMENT OF THE PROBLEMS.
To continue with this project research may wish to prepare solutions to the following problems:
1. The operation accounting system will enhance effective management of local government finance in Nigeria. By the operation of accounting system transaction are recorded as they occur on numerous business forms such as purchase invoice, checks, balance deposit tickets and pay roll cards. These document serve as input that is entered in to some types of journals as a chronological records of the transaction of the local government. Periodically the debits and credits in the journal are posted to a general ledger through the accounting system which represents a permanent files classified as assets and liabilities equity revenue and expenses of local government.
2. the operation of accounting system will improve the financial problem of insufficient of finance in the local government through the accounting system the local government will prepare its financial reports such as an income statement, a balance sheet at the end of the year and other special reports in the general ledger. These reports provide useful information concerning the financial positions of the local government to the state or federal government.
3. the operation of accounting system will also improve the facilities in the local government like medical (i.e. health), transport and education etc. as the local government grows and engage in different activities as we mention explained above, then the accounting system must be revised frequently to accommodate a larger volume of transaction and changes or improve the living conditions of the people by providing them sufficient and adequate facilities to the local government. Therefore, the design of an accounting system is not a one time Endeavour; rather it requires continuously development and improve the facilities of the local government.
4. Finally, the application of accounting system will lead to reduction of fraud and irregulations in the local government. Accounting system practice in local government is not only to control or improve the facilities, but also to reduce or control fraud and irregulation by identifying the financial records which should be prepared by each section or department of the local government in order to supervised whether the top officials are mismanaging or embezzlement to the local government in committing gross misconduct in the performance of their duties.

1.4 RESEARCH QUESTIONS.
In order to get necessary data and information about the research topic the following question needed to be asked.
A. What are the books of account that each local government is expected to keep?
B. Does Nguru local government keep all these books of account?
C. What are the qualities out put processed by the system?
D. What are those duties expected from the internal auditors and do they perform as expected?
1.5 AIMS AND OBJECTIVES OF THE STUDY.
The aims and objectives of the study to enable the researcher to understand the present accounting principle. Therefore, the accounting system has some accounting objectives as designated to it.
i. Would provide a details cost of individual establishment service and project to enable the cost so ascertained to be used for controls purpose with a view to eliminates the excessive expenditure, losses and wastages.
ii. The principles would also provide a monthly statement at the end of the year statement and period statement for specifics purpose summarizing the financial transaction of the local government for the appropriate period and indicating the financial transactions of the local government for the appropriate period and indicating the financial positions stand at the end of the period.
iii. It would provide a management accounting service to the councils its committees and department in order to facilitates the prompt policies and management decisions on the basic of accurate and comparative financial information.
iv. It would also provide financial accounting service by means of accurate and appropriately analyzed records of funds lawfully received by the local government and a details analysis of how these funds have been expended in discharging its functions to the local communities.
1.6 SIGNIFICANCE OF THE STUDY
The researchers feel that this piece of research work will be of great importance to the Nguru local government council Yobe state as a whole, because it may among others provide a means of determining the responsibility of all departure from plan and will supply information on the basis in which the necessary correctives actions may be taken.
It is intended that this research work will be also be of great benefit to:
1. The educational horizon of the researchers on issues general that is not only that of Nguru local government council Yobe state.
2. Other local government, it may aid them in future guidance of their works.
3. Other researcher and students who may have interest in the accounting system.
1.7 SCOPE AND LIMITATIONS OF THE STUDY.
Since the local government transaction varies the scope of this project is base on the financial implication of local government. It would insist to confirm whether the local government accounting principles is in accordance with the laid down rules and regulations. More so in fact to deal with how raise it revenue and how to spend such revenue. The custody of accounting books and when such book to expire does.
It is more often that local government is divided into six memories department each headed by a heads of department and each department is sectionized into different unit and each is headed by sectional head.
The researcher therefore, morrow down himself to only one section unit in the local government of the scope of studying is limited to finance unit Nguru local government Yobe state to having relevant information/data.
1.8 DEFINITION OF TERMS.
In writing this project certain terms have been used which may be different from their literal meaning, thus the following terms be defined and explained.
1. ACCOUNTING SYSTEM: this is identifications and recommendations of financial information to facilitates decisions regarding activities and resources to ensure that the principle procedure to carry out transaction is in accordance with the guarding principle of accounting techniques.
2. EFFECTIVE MANAGEMENT: this is a process of produce good result with regard to the guarding, controlling coordinating, directing and supervising the affairs of the organization toward achievement of its goals desire at the reasonable time to facilitate implications more efficiently.
3. LOCAL GOVERNMENT: this is a third tier of government in which established by constituted authority to carry out its functions accordance with laid down rules and regulations to closer citizens to it development and progress for well being of the messes.
4. FINANCE: the funds available to the government or the private organization to carry out their transaction over the given period usually a year (i.e. 12 month).