Strategies For Enhancing Financial Accountability In The Local Government System In Nigeria.


 The Webster international dictionary third edition defined accountability as this quality or state of being accountable responsible or liable to pay or make good in the case of loss, liable to be called account for or answerable to superior.

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Financial accountability, can therefore be easily discerned to be the process of making everybody both the leaders and the led to be responsible for their actions, goals and so on, utilizing available control measure.

Financial accountability can also be said to mean, being responsible and accountable for any finance one is entrusted to.  This is a typical issue of great concern that no head of state or state governor concludes his budget speech without mentioning accountability.  It is no overstatement to say that many people do not understand fully what the work accountability entrants for this reason, they could not maintain or practice accountability.

Crabb, (1974), English synonym views accountability as a pledge given for this performance of some act, or the fulfillment of some engagement which may be financial or otherwise breach of which subjects the default to fall punishment or disgrace.

A person is accountable to his employer or superior for the manner I which he has conducted any business transaction entrusted to him.  Accountability can also be said to mean rendering accounts of stewardship or performance.

Oladele, (1984), in his own way aid that accountability in the corporate setting primarily originate in the procedures and guidelines which the individual firm device as a means of ensuring the control of cost product quality and other financial mattes.

Financial accountability is geared towards ensuring that there in control over fraudulent practices, defalcation and embezzlement.  This equally includes ensuring that the responsibilities and obligation of all individuals in the establishment are carried out in the right manner.

The word accountability as defined in the early stage of the chapter shows the kind of responsibility, which is imposed on the individual in his day-to-day activities.  Here there is no accountability in an organization, the financial position of the enterprise will not be sound.  This will reduce the profitability and returns on revenue.  But if there is accountability, there will be continuity of the organization or business were other factors that can disturb it’s function do not come to play.  His will increase employment and many workers returned I their jobs and they save for more investment.

Kohler, (1975), defined accountability as the obligation of employees, agents or other person to supply satisfactory report often periodic of action or failure to act following delegated authority.  He went further to state that it is a measure of responsibility to another person in terms of money, units of property or other predetermined basis of accounts.  This shows that when one is assigned with some responsibilities, he is expected to give account of how he carried out the assigned task.  He is equally expected to account for assets and other things put under his custody.  Also, that the report given by the employee or agent should be satisfactory one.  Accountability helps the establishment to achieve it’s desired goals.

Accountability implies that every individual in a organization is held answerable for the manner in which he has utilized and managed financial and human resources available for the achievement of desired results (that is the organizations desired objective).  This shows that for the organization’s desired objective to be achieved, accountability must be emphasized.

This involves  a continuous review of individual operations and performance evaluation.  Deviation from the expectations of the establishment can in this way be noticed and corrected in time.

The very first step is any establishment to see that there is accountability is to make sure that the duties that are performed by individual are defined.

Pratt, 1989), contributed that a dearly defied organizational structure is prerequisite for accountability unless duties are  defined and allocated to specified persons, unauthorized actions become difficult to detect.  The statement emphasizes the need for segregation of duties for effective control.

Financial accountability suffers in cost local government system due to the followings:

  1. Inadequate Relevant Edict governing Revenue Generation: It does appear that the laws governing collection of revenue in our local government system are the ones inherited either from Enugu or Abia State that constitute the Ebonyi State local government system.

The absence of these bye-laws also contribute to revenue leakage in the system.

  1. Lack of proper checks and balances When all revenue officers who are entrusted with the collection of public fund did not ensure that the following prescribed forms designed to guard against fraudulent practice are used:
  2. Book 6A revenue receipts book
  3. use and unused form
  • revenue collector’s paying-in form 15A

in addition, non submission of revenue cash book for checking where all these were not complied with, room for embezzlement has been created.


  1. Non-compliance with financial regulation governing revenue collection: There is this verified belief that in any system that lacks law and order, nothing works there.

This statement is true for:

  1. Administrative sector
  2. Economic sector and even
  • The social sector

Therefore, for us not to comply with the relevant laws governing revenue collection in the local government system, especially the financial memorandum, is a deliberate attempt to create confusion in the local government accounting system, to deny the council areas of their legitimate funds.


  1. Lack of relevant and qualified staff: This is one of the most difficult problems associated with financial accountability in the local government system. Experience has shown tat most accounting staff in the system know little or nothing about public sector accounting.  And if any officer who does not have relevant qualification and experience is to be in charge of revenue collection, the result, certainly will be fund leakage.


  1. Lack of professional Ethics:  Public accountants in the local government system, like any other civil servant, are expected to posses the following qualities apart from their educational qualifications:
  2. Discipline
  3. Honesty
  • Sound value judgement
  1. Courage and patience.

In addition to ensuring compliance with the constitution of the federal Republic of Nigeria, financial regulation, civil service rules treasury/establishment circulars in the discharge of their duties.

Where such lapse have been sensed in the organization, a way of restoring accountability should be sought.

These may include:

  1. Relevant Edict for Internal revenue Collection: The present laws on third tier of government on internal revenue collection appear not to be comprehensive.  There is need for the appropriate body to come up with bye-laws/review the existing rates to help check the present fund leakage in this direction.
  2. Maintenance of proper Checks and Balances: In Public Sector Accounting (PSA), there are specified rule and regulations s prescribed by chapter three of financial regulations in revenue collection apart from the use of:
  3. Book 6A
  4. Maintenance of cash book
  5. Lodging of the revenue into the bank on daily basis
  6. Used and unused receipts form
  7. Paying-in form 15A and
  8. Bank reconciliation statement which revenue officers, showed comply with, in the performance of their duties. Their books of accounts should equally be submitted to thee Auditor, when required for auditing in accordance with the relevant laws governing local government business.


  • Compliance with Financial Regulation Governing Revenue Collection: Revenue officers in the third tier of the government should ensure that they maintain professional code of conduct by possessing the following qualities:
  1. Financial discipline
  2. Honesty
  3. Courage and patience
  4. Sound value judgement in the management of public fund in order to achieve excellence in the performance of their duties for it is only when this is done, that they will be able to comply with the rules and regulation governing revenue collection.


  1. Training and Re-training of Staff: Capacity building is a sure way of reminding ourselves of the need to improve our professional standards, increase our service stand and/delivery to the people we are  accountable to.  This recommended training and retraining of or revenue officers and exposure to the new reporting format with respect to revenue collection in the third tier of government, will help to improve accountability.

Furthermore, from the definition of numerous authors on accountability, is therefore advice all the procedures that head to financial accountability be strictly adhered to.

The system of handling finance mainly must be designed with care.  This is because it is at this point that assets of an organization are easily misappropriated.  Effective accountability implies that every individual is held responsible and made to account for assets and other resources trusted to his or her care.


Internal control is defined by the dictionary of financial planning as “a system undertaken by an economic entity to protect assets against misappropriation and waste, ensure accurate financial data and reliable financial report”.

A second definition of internal control comes from the

guidance to auditing standard No. 1 which defined the internal control system quite explicitly as follows: –

“The whole system of control financial and otherwise established by the management I order to carry out the business of the enterprise in an orderly and efficient manner, ensure adherence to management policies, safeguard the assets and secure as far as possible the completeness and accuracy of the records”.  The individual component of an internal control is system or measure adopted by an organization to act as a check to their internal performances.  This is designed to help the organization to achieve its set objectives through operational efficiency.

The striking thing about the definition is it’s all-embracing nature, and it is clear that internal control is concerned with the way in which individual controls inter-relate which member of management are able to exercise personally, the geographical distribution of the enterprise and many other factor.  The choice of controls may reflect a compassion of the cost of operating individual controls against the benefit expected to be derived from them.

The operating procedures and methods of recording and processing transaction used by small enterprise often differ significantly from those of large enterprises. Many of the internal control, which would be relevant to the larger enterprises, like the multi-national corporations, are not practical, appropriate or necessary in the small enterprises or medium enterprises.  The larger the organization, the move complicated their transactions are meant to be.  This will need extensive systems of internal control.  Management of small enterprises have less need to depend on formal internal controls for the reliability of the records and other information because of their personal contract with or involvement in the operation of the enterprise itself.  This is because they have fewer transactions hence many need less complex internal control system as supervision of the employees is meant to be easier.

However, the following is description of the type of control, which may be found in many enterprises and some a combination of a certain degree of reliance may be placed.






These are controls exercised by management in their day to-day routine of duties.

They include the overall supervisory controls exercise by management, the review of management accounts and company expenditure with budget, the internal audit function and other special review procedures.

At this juncture, it is necessary to state in a summarized from the aim of the establishing internal control.

  1. To increase efficiency of the organization by preventing fraudulent practices and safeguarding assets.
  2. Security the accuracy and reliability of the records.
  3. Enhancing profitability, which is the aim or main objective of every profit, oriented organization.
  4. Reducing the necessity of detailed work of both internal and external auditors
  5. To ensure that any deviation in the way transaction are carried out is sorted out quickly and corrected before further damage is done.

Hornby (1975), defined control as a means of regulation, keeping in order and checking.

These involves the checking of transactions of accounts by an authorized person as a control measure with the organizations.

It should be noted that in some organizations, internal control as a system is lagging behind.

This shows that they do not appreciate the measure.  It is risky to over look the importance of internal control as this will create room for adequate check.

When people’s actions re not checked or controlled the temptation of engaging on fraudulent practices comes in.  it is not only in finance that control should be applied.

Control therefore, should equally be extended to financial records and any other controllable factor.  When this is done, the profit motive of the organization will be achieved.

Robert 91982) opined that control is an element of management task and involves the measurement and correction of the performance of subordinates.

Having sorted the types of internal control available for use by the management of an enterprise or organization, it is also important to say that the achievement o the aims stated above will depend often in the importance to which the management attaches to internal controls. The management objectives in evaluating and testing internal controls is to determine the degree of reliance which he may place on the information contained in the accounting records.  If he obtains reasonable assurance by means compliance test that the internal controls are effectively in ensuring the completeness and accuracy of accounting records and validity of entries there in, he limit the extent of his substantive testing.

In some organization however, the auditor may be unable to determine whether all the transaction have been reflected in the accounting records unless there are effective internal controls.

The principle of internal control as can be seen from different authors is that activities of every staff constitute of control measure in some establishment.  This is enhancing by accounting system, adequate segregation of duties and authorization of transactions.  Each organization should see that designed internal control is strictly adhered to or they do not have any.

Types of management control measure in order to enhance financial accountability are as follows:


  1. SEGREGATION OF DUTIES: Any organization that would want to do well will include segregation of duties as one of it’s control measure.

Segregation of duties sees that no one employee remains in a unit from the start to the end.  If the extent of segregation of duties is not enough these will lead the individual concerned into fraudulent acts.

Pratt (1989) in his own view considered segregation of duties to mean the at different persons should see to initiation, raising of documents, records of transactions.  Organization plan should indicate clearly the department or persons responsible for each functions as purchase, receiving revenue, maintaining accounting records and preparing the payroll.  If the management is to direct the activities of an organization according to play, every transaction should go through these steps: –

  1. Authorization
  2. Approval
  • Execution and
  1. Recording

The sub-division of duties within an organization should be designed so that no one person or department handles a transaction completely from beginning to the end.  When duties are divided in this way the work of one employee serves to verify that of another, and errors, which occur, tend to be detected promptly.  Each  worker will know his area of authority when responsibilities are shared.  This will reduce conflicts in organization, this is because their duties will be defined and no body does another’s job unless when permitted.  Every employee will equally be careful in carrying out his duties, as it will be easy to trace any fault to a person in particular.

The process of responsibility sharing should separate the accounting function from the custodianship of assets.  An employee who has custody of an asset should not maintain the accounting records of the assets.  The person having custody of assets will not be inclined to waste it, steal or give it away if he is aware that another employee maintaining the accounting records has not incentive to falsely the record but if one person has the two functions to perform, there is tendency, opportunity and incentive to falsely the record and conceal shortages.

The following diagram help to illustrate how segregation of duties creates a strong internal control system:

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