This study attempts to present a periscopic view of the management of local government finance in Nigeria. This is with a view to investigating the challenges of efficient and effective management of local government finance. Local Government, as it is presently known, was originally known as Indirect Rule System of Local Administration. It was first tried in the Northern Emirates, and upon the amalgamation of the Southern and Northern Provinces by Lord Lugard in 1914, the system came down to the Southern Provinces. It was assimilated in the Western Provinces but was not so easily in the Eastern Provinces. The Local Government Ordinance, patterned after the English system of Local Government, came into effect in 1950. The first Local Government Law was passed by Western Nigeria in 1952; followed by Lagos Local Council Law of 1953; Northern - 1954; and Eastern Nigeria - 1955. These Laws replaced the Local Government Ordinance in 1950. The 1979 Constitution of the Federal Republic of Nigeria, which has the same Provisions and Schedules as the 1999 Constitution, raised the status of Local Government Councils to the third tier of the government of the Federation, section 7subsection 1. Section 7subsection 6(a) and (b) provide for the sources of revenue to the Councils. As Nigeria marks its tenth National Assembly, it becomes apposite that finances and functions of local governance become paramount in national discourse in order for it to take its pride of place. This is in response to the seemingly neglect that local governance has faced over the years, with the new canon of never again shall its finances be subjected to the whims and caprices of the state governments. The specific objective of this research is to provide crippling constraints on the freedom of the Councils to have direct access, without recourse to the State Governments, the funds allocated to them from the Federation Account. Since the meagre internally generated revenue of the Councils cannot sustain ten per cent of the development needs of the Councils, their inability to have direct access to their major source of revenue accounts for their ineffectiveness in most respects. The methodology adopted to achieve the objective of this paper was a combination of documentary, historical, and descriptive approaches Both primary and secondary data were collected, In the lucid preparation, resort was held to textbooks, journals, articles, and newspaper publications, opinions of essayists, case laws, and the constitution of the Federal Republic of Nigeria. The position of the article emphasized the fact that the importance of proper import of finance makes it sustainable, as it is not surprising that the finance and functions of local governments are next to each other in the Constitution, for both have a symbiotic relationship. Without the finance, the functions cannot be executed, and without function, finance would come to naught. Taken together, both are the main basis of the local government system; the raison d'être of the councils, which ab initio were established to give practical expression to local initiatives. The sources of finance for local government are three: Direct allocation from the Federal and State Governments; internally generated revenue; and loans, grants, donations, interests, etc. This study discovers whether indeed there are, first, enough sources of revenue for local government, second, whether the local governments themselves tap, or adequately tap these sources, and third, whether the accruable revenue is adequate for the execution of their functions. This paper recommends the removal of section 6, subsections 3, 5, and 6from the Constitution. For the Councils to be responsive to the needs of their localities.