Relationship between Local, State and Central Government

(i) The Central Government creates Local Government: The State Government will initiate the creation but ratificationthe act of voting on a decision or signing a written agreement to make it official. More is the responsibility of the central government.

(ii) The Central Government adjust its boundaries if there is a need.

(iii) Central and State Governments give grants to local governments. They can withhold the grant when they default or misappropriate funds.

(iv) The Local Government Service Commission, set up by the state government, approves the appointment of its senior staff to audit accounts, reports, budgets, etc. in order to enhance sound management.

(v) In some countries, e.g. South Africa, the central government has the power to dissolve a Local Government if necessary.