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Local Government Expenditure Controls

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Local Government Expenditure Controls.


An allegation of illegal expenditures implies the ineffectiveness of barrier controls over local government expenditures. It is against this background that is decided to examine the Oye Local Government Expenditure Control as a case study: the lessons from this study can be applied to the operations of any local government in Nigeria. The study sought to review basic controls over expenditures in local governments.

The findings show that whilst the basic organizational procedural, budgeting and accounting, and administrative controls are in place as specified by various enabling legal documents, there is yet the possibility of beating the control system and exploiting it to satisfy the personal interests of officials through the executive of illegal expenditures or budgetary offences. The qualitative data gathered provides the evidence. The study incorporates basic recommendations to help local governments resolve the operator’s problem of budgetary offences or illegal expenditure. 


Local Governments, the third tier of government in Nigeria, are statutory creations. They derived their powers from the constitution just like the other two levels of government, namely: Federal and State governments. The Constitution of the Federal Republic of Nigeria of 1979 (as amended to date) requires a local government to participate in economic planning and developments of its area.

Local governments (Basic Constitutional and Transitional Provisions) Decree No. 15 of 1989, and the Constitution of the Federal Republic of Nigeria of 1989 have similar requirements. Essentially, local governments exist to cater to local public needs. As Haruna (1972 p. 224) puts it ‘the raison d’etre for creating local government bodies is to cater for local public wants; he then argued that local governments need to spend money to accomplish this goal.

The money which local governments spend is derived largely from Federal and State statutory allocations. They also generate some revenues internally. These amounts (internally generated revenues and statutory allocations) are considered to be very substantial. To ensure optimal use of these revenues, it has been argued by Nuhu (1972 p. 11 245) that there is the need for effective and equally honest public expenditure control.

The control over the expenditure of local governments could be classified into two broad categories namely: internal controls (controls emanating from within the local government) and external controls (controls emanating from outside the local government). These controls are not substitutes, both are complements. Nuhu (1972 p. 251) stresses the importance of the internal and external controls in the following words: “The exercise of a suitable form of internal and external controls over local authority finance is of importance to efficient financial management”.

External controls over expenditure of local governments are exercised by the State government. The State government derived the power to exercise these controls from section 7(1) of the Constitution of the Federal Republic of Nigeria of 1979 (as amended) section 7(10) and 123(3) of the Constitution of the Federal Republic of Nigeria of 198 and section 1(9) and (10) of the local government (Basic Constitutional and Transitional Provision) Decree No. 15 of 1989. 


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CSN Team.

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