A Social Accounting as a Method of Assessing the Impact Of Development Activation


Much has been written extensively on local government accounting and finance despite its new nature. The writer therefore deemed it necessary to review some similar work of other writers. In the course of doing so, a review of government accounting, statutory base of government finance, sources of local government expenditure Patten and finance will be examined. The above hence formed the theoretical background of the study.


Government Accounting is the oldest form of accounting long before business enterprises emerged in whatever form, government has been in existence and had maintained records of taxes collected, these resources had been disposed off by their treasuries, (logician, 1992). This is so because government more over tends to keep and preserve   financial records longer than other entities. Hence, those records excellent examples of government accounting form early period.

Accounting in a general sense may be considered as a process in which the transaction and events in an operating entity are recorded for the purpose of accounting and providing financial information essential to the good conduct of the activities of such an entity,.


Ostrisam and Deam (1984), defined government accounting as: the process of recording, analyzing, classifying, communicating and interpreting financial information about government un aggregate and in details reflecting all disposition of government funds and propriety. The purposes and to demonstrate the propriety of transactions and their conformity with established rues to give evidence of account ability for the stewardship of government resources and to provide useful information. For the control and efficient management of government operation.


Government Accounting as a process of identifying mean and commutating public sector economic information in  monetary terms prints informed judgments and   decisions customs and procedures associated with the accounting for local , state and national government units.

The in story of government of government in Nigeria dates back to time immemorial. This is because even before the ardent of colonialism, great ancient kindred of Hansa knd, Igbo knd, Kanuri land and Yoruba land had existed. Then, there had been some systems of tribute taxes to the ruling monarchies.


The nature of government accounting is such as to satisfy the unprofitable nature of government. Government is an institution for the exercise of administrative and political unit or people (ostracism and Dean 1984). Therefore, contrary to commercial enterprises, government has no profit making motive that an enterprise is not profit oriented does not mean that the enterprise operation if the organization makes a profit, it is ploughed back to enhance the objective for which the organization is established. In as much as the motive of government is to satisfy social needs, the nature of government accounting is similar to that of ‘’not for profit enters rise (Anyafo, 1994). Government   accounting is tailored to emphasizing the use of funds provided to accomplish objectives designed in the best interest of taxpayers.



In his words, Aborisade (1986), maintained that accounting for local governments indirectly tailored towards ensuring that ample control is employed in the receipts, custody and disbursement of the funds allocated to the local government. Also, local government accounting ensures that there is proper account ability for transaction carried out involved in by the local government. The necessary documents records used for stating the transactions should also be produced, updated, timely and provided in such a way that the parties needing then would find them useful and accurate for their own consumption


Therefore accounting for local government has the prime purpose of enabling the authority to demon strata full public accounting. The essence of the forgoing discussion is that a local government should be able to demonstrate sound stewardship in the conduct of the financial affairs of the community, which it serves.

The financial memoranda out line the objective of local government accounting system as follows;

  1. a) To provide management accounting services to the council, its committee and the departments in order to facilitate the reaching of prompt and management decision on the basis of accurate and comparative financial information
  2. b) To provide a financial accounting services by means of accurate and appropriately analyzed records of fund lawfully received by the local government and a detailed analysis of how these funds, have been expenditure in discharge the function of the local government .
  3. c) To provide monthly statement, the end of the year statement and periodic statement for specific purposes, summarizing the financial transaction of the local government for appropriate periods and indicating the financial situation at the end of the periods.
  4. d) To provide detailed casts of individual establishment, serviced to enable the costs so ascertained to be used for control purposes with view, inter alia, to eliminating excessive expenditure losses and Wastage.


At different stages in the evolution of local government in Nigeria since the colonial era to the present day, there have been ordinances, Acts, Decrees or other laws regulating  the sources of financial for the rooming of the local government   in Nigeria. A closer examination of the financial local government as provided by the various colonial states could convince one to conclude that during the colonial era, local authorities got their financial form taxation but     ADEBAYO ADEJI (1979) opened that apart from the revenue from taxation, such statues also severally to some extent empowered the local governments to receive from special rates, fines and fees, government grants and a number of less important sources.


After independence, the ordinances of the colonial government repealed and repealed by the indigenous legislations and decries which under went various modification and amendments before the emergence of the national wide local government reform of 1976.

Prior to 1976 but after independence, the local government depended heavily generated funds; supplemented although with grants- in- aid from the state government for health; education, road construction and rural water supply.


The period was marked by an inconsequential rise of finds from the federal government for the maintenance of the local government.


In line with the guidelines on local government reform of 1976, the 1979 constitution for the local government in addition to the revenue generated by it from other sources.


Section 7(6) of the 1979 constitution and 7(8) of the 1989 constitution of the federal republic of Nigeria provides thus:

  • The National assembly shall make provision for statutory allocation of public revenue to the local government in the federation and
  • The house of assembly shall make provision for statutory allocation of public revenue to the local councils within the state.


Again, section 162(1) of the 1989 constitution provides that the federation may make grants to a state or local government to supplement the revenue of that state and that of local government in such terms and conditions as may be presented by the National Assembly.



According to Lawal (19882), it has been generated agreed that no central government can satisfactory conduct administration wholly from the capital through the civil servants based at the headquarters. It logically follows, therefore, that there is the need for a form of decentralization such as will enable government to reach out to the people at the local level. The local authorities are set by the central government to administer local areas they will rule and the functions by the local authorities include the followings:

(a)     Prevention of crimes and maintenance of Law and order:  Local authorities are expected to protect crimes and to see that laws and orders are maintained in the areas of jurisdiction. By-laws could be made to prevent people from caring weapons or to prevent people from hawking along major streets and motor parks.

(b)     Provision of services:

Local authorities provide a lot of services for the people in their areas of jurisdiction; large urban and municipal councils provide city transport services such as Nsukka local government mass transit. Udenu local government mass transit and a lot of others. Besides transport services, most local governments build market stalls, which are rented out. Fees are charged on such stalls, motor parks, dispensaries and maternity centers-schools are also build by local governments.   They also maintain minor roads and build or repair minor bridges


Local authorities do perform some legislative functions. They are allowed to make bye-laws required the provision of the central or state government before they became effective. These byelaws are usually made to control markets, buildings plane must be submitted for approval for the plans to start off. Also, it is compulsory to obtain bicycle license and in some places license are obtained for dogs, wheelbarrows and trucks. These who break these bye-laws are punished by the local councils.



In N Nigeria, some local authorities provide local courts. These courts deal with local matters such as divorce of marriage done according to traditional laws and custom, minor traffic offences, setting of minor land disputes and thee lots of others. Most of their courts officials do not legal knowledge but they are some what trained for the job.


It has been stated that local authorities perform a good number of services such as health services, education services, maintenance of local roads, construction of market stalls and motor parks, construction of bridges, and roads and lots of others.

But in order to carry out these functions, local authorities need money. Therefore the sources of local governments revenue can be classified under two broad heads viz:


(a)     Internal and External sources of Revenue, these include:

  1. Taxes

ii        Rates

iii       Local license fees and fines

iv       Rent on Government property

v        Interest payment and dividends

vi       Reimbursement

vii      Miscellaneous income (slaughter fees, etc)

viii     Earning from community undertakings


(b)     External sources of revenue income:

i State allocation

ii Federal allocation

iii Donations/Government grants/loans

iv Miscellaneous income.

For want of space, the writer narrows down his discussion only to the internal sources of revenue.


Internal sources of revenue refers to those revenue that local governments are empowered by the law to administer and collect within their areas of jurisdiction. It is the firm belief of government that internal sources of local government authorities revenue can be appreciably increased if more efforts are put into actual collection and the staff display greater degree of honesty. Close supervision of staff coupled with speedy diplomacy measures and public cooperation will definite improve the situation. The main internal sources of local government revenue areas.



(a)     Internal sources of revenue, these include:

I         Taxes

ii        Rates

iii       Local license fees and fines

iv       Earning from community undertakings

v       Rent on local government property

vi       Interest payment and dividends

vii      Reimbursement

viii     Miscellaneous income (slaughter fees, etc)



(b)     External sources of revenue include:

i         State allocation

ii        Federal allocation

iii       Donations/Government grants/loans

iv       Miscellaneous income.

For want of space, the writer narrows down his discussion only to the internal sources of revenue.


Internal sources of revenue refer to those revenue sources that local governments are empowered by the law to administer and collect within areas of jurisdiction. It is the firm belief of government that internal sources of local government authority revenue can be appreciably increased if more efforts are put into actual collection and the staff display greater degree of honesty.


Close supervision of staff coupled with speedy disciplinary measures and public co-operation will definitely improve the situation. The main internal source of local government revenue areas follows;



It is seen as one of the very rich internal sources of local Government. Revenue and should, in the meantime, be restricted to urban areas. All the urban areas, exchanging rural community councils there in for the meantime, should develop property rating as a source of revenue property rating, to be effective, needs not only be comprehensive but also requires up to date valuation, with quin-quinnial revaluation. The main limiting factor in the extended application of property rating is valuation. Urgent attention will therefore be paid to the improvement of valuation capacity. The whole yield of property rates in urban local government areas in Enugu and Onitsha including subventions in lieu of rates on government property will accrue to such local authorities.  However, in subordinate urban council areas, 10% of the revenue from property rates should be made available to the relevant local government council. Undeveloped plots used for commercial purposes could attract appropriate levies, whether by rating or by licensing of their use. In some urban areas, especially the new ones, tenements rates may be introduced as a step towards property rating. Tenement rate is the paid by the occupants of buildings either in form of residence or business area. It is also the type paid in any property of permanent nature. It could be in form of capital assessment, rental value/ location value or flat rate assessment.



The yield of development rates and other general levies should belong to the local government of the area, which will make subventions to the subordinate council.

Local government markets motor parks; Fees from these projects and all proceeds are paid into the local government revenue purse. In this regards, rural local governments should endeavor to establish divisional markets and motor parks. The proceeds from community council markets/motor parks go to the community council revenue purse. Local government councils and subordinate and urban and community councils undertake joint projects in this respect.



Revenue from licensing of bicycles, canoes, wheelbarrows, etc. should be retained by the subordinate council. The licensing authority should be the local government council.

Liquor Licenses:

This source of revenue will accrue to the local government council with the public and health authorities representing in the licensing Boards.



Some other fees that are collected by the local governments because of their services to people within their areas of jurisdiction are as follows:

Domestic animal license fees, Religious places establishment permit fees, customary burial ground permit fees, public convenience sewage and refuse disposal fees, mobile sales promotion fees and rates, Right of occupancy fees on lands in rural areas, excluding those collected by the federal and state government and revenue from investment.

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