AN ASSESSMENT OF TREASURY MANAGEMENT PROBLEMS AND REMEDIES IN LOCAL GOVERNMENTS

ABSTRACT

This study examines the assessment of treasury management problems and remedies in local government using Ado locale government as the case study. Questionnaires were used to collect data and supplemented with secondary data.

The analysis revealed that the problems facing local government authorities are attributed to poverty and dwindling/scare resources (financial, manpower and leadership) relative inelasticity of income and local revenue, lack of administrative and development planning capacity. It is recommended that to get a favourable result in the treasury management, negative attitudes such as fraudulent act, misappropriation, e.t.c. should be changed into honesty and loyally towards the co-existence of the local government.

TABLE CONTENTS

 

Title Page

Certification

Dedication

Acknowledgements

Abstract

Table of Contents

CHAPTER ONE

1.1     Background of the Study

  • Statement of the Problem
  • Objectives of the Study
  • Scope of the Study
  • Significance of the Study

1.6     Distinguishing Between Hypothesis Research Question

1.7     Definition of Terms

End Note

 

 

CHAPTER TWO

2.0     Literature Review

2.1     Essential Characteristic of Treasury Management

  • An Overview of Ado Ekiti Local Government

2.3  Sources of Funds of the Local Government Treasury

2.4     Function of the Local Government as Related to

Treasury Management

2.5     The Management of the Local Government Treasury

  • The Roles of the Treasury

2.7     The Role of Finance and General Purpose Committee

2.8     The Role of the Auditor

2.9     Types of Auditing Work.

2.10   Functions of Internal Auditor

  • Funds Management Committee

2.12   Finance and General Purpose Committee.

2.13   The Executive Committee

  • Board Of Survey at Local Government

2.15   Local Government Audit Alarm Committee

2.16   The Importance of Internal Control System

Treasury Management

2.17   Review of Other Relevant Literature

End Notes

CHAPTER THREE

3.1     Research Methodology

3.2     Research Design

  • Data Collection

CHAPTER FOUR

4.0     Data Presentation, Analysis and Interpretation

4.1     Introduction

4.2     Presentation and Analysis of Data

4.3     Test of Hypothesis

4.3.1  Test of Hypothesis  I

4.3.2  Test of Hypothesis II

4.3.3  Test of Hypothesis III

CHAPTER FIVE

5.0     Summary, Conclusion and Recommendations

5.1     Introduction

  • Summary of Findings
  • Conclusion
  • Recommendations

Bibliography

CHAPTER ONE

1.1     BACKGROUND OF THE STUDY

          Local Government in any nation like Nigeria is an entity through which government and its policies are carried to the grassroots. The governing body is selected or otherwise elected. It constitutes an integral part of country’s overall political structures.

The creation of local government is made by the law of a state government with the intention of bringing government to the people. It is clearly understood that even if the machinery of the state government stops functioning, law and order will still prevail if local council in Nigeria continues to exist.

According to Okoli (1998) local government exist to fill the gap which the national government is too far away or too remote to fill, it brings the national government closer to the people and makes its impact felt in all the rooks and crannies of the society. The national government through this medium caters for those in the grassroots. Local government plays vital roles in the development of the country.

According, attempts have been made out different stages of the country’s political life to modify the local administrative system and to make them perform their roles and functions. But in spite of these efforts, the local government continue to exhibit evidences of poor performance, this had led to the federal government direct intervention in local government affairs eventual entrenchment of the system in the country’s constitution.

It can also be maintain that they are the overall authority and it is through them that the provisions of all social services and maintenance of law and order can be realized.

According to Gboyega (2001) local government can be defined as an entity through which government and its policies are carried to the grassroots. It was stressed that during the early stage of local government in Nigeria (GOWON’S REGIME) which lasted from 1967 – 1975, different states operated different system of local government. In the Northern states, the emirs retained some of their power and influence because the councilors appointed by the military governors were traditionally and spiritually expected to defer to the authority of the emir. The Eastern state and mid exist state abandoned the councilor system adopted in the 1950s for development administration modeled after the French system. In the West states, the governor who had initially posted sole administration of local government were forced by the tax revolts of the late 1960s to re – introduce local government participation.

Mustapha (2003) local government also became a conduct pipe for looting of national treasury, for instance, the Association of local government of Nigeria (ALGON) chairmen reportedly mandated the military leader to deduct local government funds for the purchase of two Toyota Jeeps for all local government chairman, while the other belong to the police to facilitate effective policing and combat of armed robbery.

Harriman (2006) Local government is not a creature of state government but one of the tiers of government of the country. Every effort should be made to allow local council to operate with prestige and not as beggars.

Therefore, the provision of funds and its disbursement in a local government area is a measure that enables the local government to perform its stated roles. So, the importance of sound and effective management of the treasury of a local government authority cannot be overstressed.

Without effective treasury management, the polices adopted by the local authority in a great variety of field may not be successfully implemented. Comprehensive arrangement are therefore in force in all states for the exercise of internal and external control over the treasury of the local government authority but very little and in some cases, virtually no regard has been paid to the need for effective and progressive management of treasury of local management council. The management of treasury in the local council should be taken as a tool for controlling the activities of local authority in the country since without proper and effective management of funds of local government, the overall affairs of the local government will be poorly managed as there will be no constant payment of staff salaries, maintenance of law and order, provision of infrastructure and execution of capital project. The treasury management is a type of control exercised by the management within an organisation. It is very important where the size of the organization is large and where the government of a state is found. It is very difficult to have direct contact with the routine operations of the organization.

 

  • STATEMENT OF THE PROBLEM

Large- scale misappropriation of fund in public office has now become a common practice in the society and the local government is not exempted. This had led to modification of local administrative system for a better performance in terms of service rendered to the people. Inspite of this modification, there still exist a poor performance which is evident in the case of the local government. This ineffectiveness can be traced to some factors of which poor treasury management is one so in the study we will consider which constitutes an effective treasury management and also how inefficiency in the treasury can avoided.

  • OBJECTIVES OF THE STUDY

This study will make an appraisal of the treasury management policy and practice employed by Ado local government concerned with a view to determine.

  1. The extent at which proper treasury management has helped the local government in performing their specific function
  2. The procedure and techniques employed by the local government in monitoring the effective treasury management.
  3. What principal difficulties are being faced by both the management and lower level staff in treasury management planning and implementation?
  4. What conditions are necessary in a board government to ensure effective treasury management?
  5. What (if any), the possible causes of deviation in the planned and actual operation of treasury management are and how they are re-dressed.
  6. What roles are being played by the treasurer of a local government in treasury management?
    • SCOPE OF THE STUDY

The study focuses on treasury management systems as a means of promoting proper accountability within an organisation with a particular reference to Ado local government. This study will perform test and review the internal control system and the internal check that already exist in the organisation. There will be a careful study of the operation of the following divisions.

Finance/ Treasury Division, Audit Division, Budget Division, Chairman/Sole Administrator.

  • SIGNIFICANCE OF THE STUDY

The outcome of this research work will be useful to the organisation under reference because if the recommendation were adopted, loopholes and other weaknesses in the existing internal control system would be exposed. This will urge the management to strengthen or if necessary build a new comprehensives treasury management, which would promote proper accountability within an organisation.

The research work will also serve as a valuable document for students, business executives, middle management staff and other people who wish to consolidate their knowledge on treasury management. The result will also be very essential to all government offices who are presently witnessing large scale of misappropriation of fund and poor accountability.

1.6     DISTINGUISHING BETWEEN HYPOTHESIS RESEARCH QUESTION

The following are working hypothesis, which would be tested. Null and Alternative hypothesis which are usually by H0 and Hi

 

H0:

  1. That well qualified personnel are not employed as accounting

staff.

  1. That an effective treasury management is not capable of

detecting frauds and error.

  1. That the contribution of the state and federal government is not

sufficient to cover all the capital expenditure of the council.

Hi

  1. Those well qualified personnel are employed as accounting staff.
  2. That an effective treasury management is capable of detecting

frauds and error.

  1. That the contribution of the state and federal government is

sufficient to cover all the capital expenditure of the council.

1.7     DEFINITION OF TERMS

TREASURER:- He is the head of the treasury department, he manages and controls the finance of the local authority he keeps records of all money received and spent.

AUDITOR:- He sees to the checks and balances of all financial transaction of the local government.

VOTE BOOK: It is used in recording all expenditure and liabilities incurred by the vote controller entrusted with the management of fund of the department.

PETTY CASH BOOK: it is a book which is kept to meet the expenditure of items whose payments voucher cannot be presented immediately.

CAPITA PAY OFFICE: responsible for the physical cash and cheques payment of wages and salaries, pensioners and contractors

FINANCIAL ACCOUNT UNIT: involved in preparation of final account as well as other financial statement of local government.

RECEIVING ORDER: responsible for collection of cash from an outsider who makes payment on fines, licenses e.t.c and also revenue collected by revenue collected.

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