LOCAL GOVERNMENT FINANCE AND UNDERUTILIZATION OF FUNDS IN NIGERIA (WARRI-NORTH LOCAL GOVERNMENT COUNCIL AS A CASE STUDY)

TABLE OF CONTENTS 

Title page i

Declaration ii

Certification iii

Dedication iv

Acknowledgmentsv

Table of contents 

CHAPTER ONE: INTRODUCTION 

1.1A Brief history of Warri-North Local Government Area1

1.2The study setting 2

1.3Statement of problems 3

1.4Research questions 3

1.5Purpose of study 4

1.6Significance of study 4

1.7Scope of study 4

1.8Definition of terms 4

CHAPTER TWO: LITERATURE REVIEW 

2.1Local Government 6

2.2The factors responsible for poor utilization of fund: 

(A case study of Warri North Local Government) 7

2.3What is Fund 8

2.4Sources of fund in a local government 8

2.5Internal Revenue 9

2.6External Revenue 9

2.7Poor utilization of fund 10

2.7.1Improper Planning 10

2.7.2Lack of feasibility studies before awarding contracts 10

2.7.3Poor location of project12

2.7.4The Execution of wrong choice project 13

2.7.5Inflated prices of contracts and materials 14

2.7.6Over-staffing 15

2.7.7Agricultural project 16

2.7.8Mismanagement of fund by the top management staff17

2.7.9Political instability 18

CHAPTER THREE: RESEARCH METHODOLOGY 

3.1Introduction 20

3.2The study design 20

3.3Sampling method 20

3.4Data collection instrument21

3.5Validity and reliability of instrument 21

3.6Statistical analysis of data 21

3.7Observation 22

CHAPTER FOUR: ANALYSIS OF RESULTS AND INTERPRETATION 

4.1Introduction 23

4.2Population of the study 23

4.3Test of hypotheses 23

4.3.1Oral interview schedule 31

4.4Discussion of results/findings 34

CHAPTER FIVE: SUMMARY, RECOMMENDATIONS AND CONCLUSION 

5.1Summary 35

5.2Recommendations 35

5.3Conclusion 37

Bibliography 38 

CHAPTER ONE 

INTRODUCTION 

1.1A BRIEF HISTORY OF WARRI-NORTH LOCAL GOVERNMENT AREA 

The Warry North Local Government Area has its administrative headquarters at Koko. It came into existence following the federal government creation of more local governments in September 1991. When the defunct Warri local government was divided into Warri South and Warri North local government areas.

The local government has a population of about 186,426 as reported in the 2007 census carried out by the federal government. It is bounded on the north by Ovia south and Oredo local government areas, on the east by the Ethiope west local government area and on the west by the Ilaje and Ese-Odo local government in Ondo state.

Apart from the fact that the area is a rural setting, all other towns and villages within it except Koko and Ajabodudun are accessible only by the means of river transportation. In other words, the local government is not only rural but also riverine. 

The above therefore, call for government’s intervention in providing basic amenities such as health facilities, electricity, provision of portable water, jetties, etc to bring the much-needed relief to the various communities.

The local government is made up of mainly the Itsekiris and the Ijaws. The Warri traditional council in which the Olu of Warri serve as the chairman of the council. The Itsekiris, popularly called Iwere, are one people, having one language, one kingdom and the same law and custom. They are generally formed just a little above the medium stature and of a light complexion. The tribal mark for both men and women are usually; three small cuts on each side of the face just below the eyes, this is called Ilaju.

They are tastefully dressed. The men dress in a long sleeve silk or lace material and a judge or other fine quality wrapper which they tie round their waist down to their feet with fine quality pair of shoes to match. They top this with a hat, trinket or coral beads round their neck and also a walking stick. While the women dress with lace or other fine material blouse, a pair of wrapper mostly judge, head-tie, trinkets or coral beads and a pair of shoe to match also.

The Itsekiris have such cultural festival as Olu of Warri coronation yearly (Oye Ekoro), the Oreomi or river goddess in every three years in Koko, the Company or Masquerade festival also in Koko and the Okere juju festival each year in Warri.

They also have different cultural dances like, the Alala, Omoko, Eguen etc which involve the male and female folks. The Abeli is just for the male folks and the Alala for the female folks. The Itsekiris are good natural people whose standard of courtesy in everyday life is high.

1.2THE STUDY SETTING 

A major cause of slow and poor development in Nigeria has been the neglect of the rural areas by successive administrations. A good number of Nigerians (seventy-five percent) live in the rural areas, and are hardly included in the scheme of development.

The decision made by the Armed Forces Ruling Council (A.F.R.C) under General Babandiga’s administration was a confirmation of the Federal Government commitment to the development of the rural areas in Nigeria. this commitment gives rise to the raising of fund to the local government level. for example, the Directorate for Food and Rural Infrastructure (D.F.R.I), and Better Life for Rural Dwellers programme were initiated.

In the same vein, the local government council are now granted about seventy-five percent (75%) of the Federation Account as against sixty-five percent (65%). These bold attempts by the Federal Government are to promote development at the grassroots level so as to ensure funds are available for the development of the rural areas. The Federal Government pays the said twenty-five percent grant directly into the local government Federation Account. However it has been observed that some of the local government councils have failed to utilize the funds met to carry out expected developmental projects in their areas jurisdiction.

It is believed that the Local Government practitioners and research students examine the factor responsible for the poor utilization of funds by the Local Government Councils. Therefore, this research hope to carry out a survey of factors responsible for poor utilization of funds by Warri North Local Government Council, Koko. 

1.3STATEMENT OF PROBLEMS

This study is planned to determine the factors responsible for the poor utilization of funds in Local Government Councils. The sub-problem of this study includes:

To identify the factors responsible for utilization of funds;

To determine the status of funds in terms of whether or not they were properly utilized in the local government; and 

What factor is responsible for the influence of poor utilization of funds.

1.4RESEARCH QUESTIONS 

The following research questions are therefore set for this study:

What are the factors responsible for the poor utilization of funds by Warri North Local Government Council?

Were the funds properly utilized by warri north local government council?

What are the factors that influenced poor utilization of funds by local government council?

1.5PURPOSE OF STUDY 

The purpose of this study is to facilitate the understanding of the causes of poor utilization of funds by Warri North Local Government.

1.6SIGNIFICANCE OF STUDY 

This study hopes to accumulate valid information to enable local officials and public in general understand the nature and status of the factors responsible for poor utilization of fund by Warri North Local Government Council.

The significance of this study therefore, is basically to enhance the understanding of the causes of the factors responsible for poor utilization of funds by the Warri North Local Government.

By t he same token, the findings and recommendations made in this report will enable Local Government officials and the general public in Nigeria learn about issues and related factors, likely to affects the factors responsible for poor utilization of fund by local government. Such knowledge and understanding will enhance their capacities in the solving of problems associated with the factors, which are responsible for poor utilization of fund at the grassroots levels.

1.7SCOPE OF STUDY 

This study is limited to the factors, which are responsible for the poor utilization of funds by Warri North Local Government Council, Koko.

1.8DEFINITION OF TERMS 

Fund: This simply means, a sum of money put aside or subscribed for a special purpose.

Expenditure: This is the sum or the amount budgeted for the execution or money meant to be spent on development for a year or for a period of time.

Local Government: This simply refers to the local government council. In other words, it simply refers to warri north local government, Koko.

Inflation: The act of inflating of credit of currency for a particular project or job to be done.

Finance: This simply means, a management of money affairs or the method of raising and controlling public money.

Execute: This simply means to construct or to build. 

B.O.Q.: This means the bills of quantities. In other words, it is a schedule of materials prepared for the purpose of which the fund is granted for project work.

Tender: This means to show one’s certificate in order to know whether he/she is qualified to execute a project.