Fund Accounting In The Local Government System (a Case Study Of Nsukka Local Government Of Enugu State)

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The role of accounting  in any business profit making or non profit making is of great significance and its life span depends upon how carefully its financial transactions are handed local government being government at local level needs to keep accurate records of all the receipt and payments if the fair of the statement of affairs are to be disclosed.

The problem that is now faced the local government is how to keep accurate records of their funs transactions. This problem prompted  the researcher in to fund accounting of the local government.

The financial memoranda which govern the local government accounting spells out the rules and regulations which the financial activities of the local government must comforts with inroder to produce a true and fair view of the  local government statement of affairs. In spite of these rules and regulation there are some constraints or weaknesses that hinder the effectiveness which the researcher is also going to encounter during work like time factor and financial problem.

Therefore the purpose of the study is to pin point those problems and proffer means of eradicating them completely or at least reducing them to the nearest minimum.              


Cover page

Title page

Approval page




Table of content



1.0 Research  background

1.1            Introduction 

1.2            Statement of problems

1.3            Purpose of the study

1.4            Objective of the study

1.5            Significance of the study

1.6            Scope of the study

1.7            Limitations of the study

1.8            Definition of terms

1.9            Statement of hypothesis



2.0     Literature review

2.1     Fund accounting in the local government system an overview

2.2     Brief history of local governments in Nigeria

2.3     Sources of revenue (funds) for the local government in Nigeria

2.4     Functions of local governments in Nigeria

2.5     Local government expenditures

2.6     Purposes served by local government accounting

2.7     Books of account for recoding financial transactions in the local governments

2.8     Accounting practices in Nsukka local government of Enugu State

2.9     Internal audit unit

2.10   Fund (cash) accounting in the local government



3.0     Research methodology and techniques

3.1            Population of study

3.2            Nsukka local government as a chosen population

3.3            Sources of data

3.4            Method of investigation



5.0     Summary conclusion and recommendations

5.1            Summary of findings

5.2            Conclusion

5.3            Recommendation

5.4            Areas of further research







1.1            INTRODUCTION 

The term “fund accounting”  is as old as the world itself. The origin of fund accounting could be traced to the parable of talents in the holy Bible (Mathew 25: 14-30) about a man who delivered his goods to three of his servants and traveled to a far country two of them traded with their and made profits while the third went and buried his in the ground. When the time for accounting for the fund came they all rendered  their accounts for the activities to  their master accounting has been defined as a discipline concerned with identifying analysis forecasting of income and expenditure and recording of  financial information” generally , it records in monetary terms the flow of economic value between or within entities.

The term “fund accounting’s often associated with either government accounting or non-profit making entities such as clubs societies and churches “ fund” in accounting may connote different meanings.  In private sector it may be used to describe net current asset (current assets less current liabilities) as when used in the statement of sources and  application of funds” it may also be used to describe an asset set aside for particular purpose it may also denote cash or securities.

A very fundamental point to note is that a fund is an accounting entity. A successful organization whether private public profit or non profit making needs to keep proper account of cash inflows and outflows. Therefore the importance of fund accounting in public sector including  local government cannot be over-stressed local government by their nature an concerned with the provision of prescribed services at local level and carrying out certain local functions thus the accounts kept by the local governments is designed to,.

i.                   Provide an analysis of the revenue and taxes raised by the  local government and;

ii.                 Provide an analysis of the extent to which such revenue has been used in providing each separate service and sub-service for which the local government is responsible. Therefore the accounting procedures must be directed towards ensuring that maximum possible benefit is obtained from the limited resources it owns.


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