LOCAL GOVERNMENT FINANCE AND UNDERUTILIZATION OF FUNDS IN NIGERIA

ABSTRACT

Local government finance and underutilization of funds have been a major challenge in Nigeria. This research aims to examine the phenomenon in Ughelli-North Local Government Council as a case study. The study used a mixed method approach consisting of both qualitative and quantitative methods to collect data. Purposive sampling technique was used to select key informants and semi-structured interviews were conducted with them. In addition, a questionnaire was administered to purposively selected respondents from the staff of the local government council and residents of Ughelli-North Local Government Area. The study found out that Ughelli-North Local Government Council receives statutory allocation from the Federation Account, Internally Generated Revenue, and Special funds from the state government. However, the council has been unable to utilize the funds effectively due to various factors such as poor budgeting, inadequate financial management, lack of transparency and accountability, and political interference. The study also found out that there is a significant correlation between underutilization of funds and inadequate service delivery in Ughelli-North Local Government Council. The study recommends that the Ughelli-North Local Government Council should adopt best practices in financial management, develop effective budgeting strategies, ensure transparency and accountability in revenue collection and expenditure, and reduce the level of political interference. The study suggests that government authorities should also provide adequate oversight functions to ensure that local government councils are accountable and efficient in their service delivery. In conclusion, this study contributes to the existing knowledge on local government finance and underutilization of funds in Nigeria. The findings highlight the need for local government councils to improve their financial management practices and ensure transparent and accountable service delivery to meet the needs of the citizens.