Background of the Study

Financial memoranda is a document with codified set for roles and regulations which provide detailed guidance and instrument on the financial accounting and stores procedures to be followed in the administration of financial aairs and material management of each local government in Nigeria. The financial memoranda in use in the country today have a long standing history and tradition. Since the inception of native authorities / administration in Nigeria government have always provided detailed guidelines to regulate the financial operations of these authorities up to the local government reforms of 1976 each state issues its own financial memoranda for use by its constituent native authorities / local governments. The 1976, local government reforms however state the need for uniform set of rules and regulations to guide the conduct of financial aairs in the new local government systems.

Thus, the federal government appointed a committee of experts in 1977 to review the various financial memoranda use in federation. This committee submitted its report in May, 1978 with a dra financial memorandum designed to replaced the three separate volumes inherited from the three regional government. The draft harmonized financial memoranda was issued as model financial memoranda to each state subject to minor amendments, mainly to reflect local peculiarities. The 1979 model financial memoranda which was given enabling jurisdiction effect by the state government was in use up to 1990 when major development in the structure of the country’ local government system occasioned in large part by the application of the 1988 civil service reforms to local government service, and the extension of the logic of the presidential system of government to local government necessitated a review of the model, financial memoranda.

Consequently, a committee was appointed in July 1990. The committee report currently constitutes the reviewed model financial memoranda. The revised financial memoranda officially issued in December 1991 by the (then) Vice President of the republic of Nigeria, Adimiral A. A. Aikhomo who in his forward to the revised edition among other things, expressed the hope that the provisions of the model financial memoranda would be faithfully implemental (emphasis mine) in such a way as to foster natural culture of public probity and accountability beginning from the grassroots. Management is essentially concerned with planning and control of the resources of an organization with a view to the attachment of set objectives. Planning is concerned with a determination of goals and the formulation of a decision model for selecting means of achieving these goals. Control on the other hand is the regulations of the activities within an organization so that they are in accord with expectations established in policies plans and target. Crucial of the planning and control decision of management is information good decision are based on information that is timely, relevant, properly, presented, problem soling and forward looking. Management accounting is concerned with the application of accounting and statistical techniques to the specific purpose of providing and interpreting information designed to assist management in its function of promoting maximum efficiency.

The techniques applied for the analysis are both statistical and accounting in nature budgeting and budgetary control in the local government estimates and project of cost analysis. It is in the light of the above stated realism that the federal government decided to harmonize the financial memoranda of the them regional memoranda, applicable to all local governments in the country. It is now 20 years sense the revised edition came into being. Signals and information across the country however reveals that the implementation of the provisions of the memoranda is far from satisfactory.

The main objective of this research is to appraise the impact and prospect of the revised financial memoranda as a management accounting tool in the local government accounting system. Determine the factors that have continued to constrain the effectiveness of the revised financial memoranda and finding ways and means to address these constraints. O overall the overriding objective is to strength financial management practice and making local government more responsive, responsible and accountable to the aspiration of the people.

Statement Of Problem

The essence of local government accounting is to provide information. Its objective is to serve management by providing the information its objective is to serve management by providing the information through recording, measuring and analyzing data which emanate from the financial transaction of the local government. The accounting system thus, measures and reports on the performance of a local government the extent to which its organizational goals have been met, its financial position and the performance of its principal officers. It also generates an essential part of the management making. The accounting functions of a local government constitute a sub- system within its management information system. The main function is the systematic according of financial transactions for purpose of providing financial information that well facilitate effective and efficient management of a local government.