The current financial predicament of Local Government Councils and constant pressure for an increase in the allocation has been on the front burner of the Local Governments Administration in Nigeria. The focus of this research paper examined Local Government Finance in Nigeria using Ife Central Local Government. Data for the study were gathered from face-to-face interviews and available records in Ife Central Local Government. The data collected were subjected to descriptive statistics (simple percentage) and content analysis. The study explored various sources of financing for local governments in Nigeria. It also explained the financial relationship of Nigerian local government vis-à-vis State and Federal Government using the theory of decentralization. The study went further to explain financial management in Ife Central L.G. Result obtained from the analysis shows that financial transfers from the federal government (Statutory Federal Allocation) are the most viable and reliable source of local government revenue and that without Federal Allocation no capital project can be embarked on. Therefore, to arrest this financial situation that local government finds itself in, that is over-dependence on federal allocation, this work submitted that local government should increase their revenue base by laying more emphasis on the internal revenue sources, especially those areas that are hitherto neglected or not been fully exploited.