How to strengthen Nigeria’s audit system, improve public accountability

Experts on Friday discussed challenges, reforms, and the quest for accountability in Nigeria’s audit system.

The experts spoke at the Centre for Journalism Innovation and Development (CJID) Twitter Spaces titled “Addressing Financial Irregularities Arising from 2020 Audit Report of the Auditor General of the Federation.”

The space was organised in collaboration with PREMIUM TIMES on Friday and featured experts including Olusegun Elemo, Executive Director, Paradigm Leadership Support Initiative (PLSI); Ayomide Ladipo, Head, Tracka, BudgIT Foundation; Maria Gowon, Programme Manager, Integrity Organisation Limited and many others who were in the audience.

The 2020 audit report, the latest from the Office of the Auditor General of the Federation, uncovered diversion and misappropriation of public funds and unaccounted public spending in top Nigerian Ministries, Department and Agencies (MDAs) within the year 2020.

Many public institutions, such as the CBN, Supreme Court, and Michael Okpara University, were spotlighted for violating financial regulations in the report.

In a recent analysis of the 2020 audit report by UDEME, a social accountability project in West Africa, 32 financial misconduct issues were identified under the Ministry of Labour during the period under review by the Auditor General.

Read also: https://www.premiumtimesng.com/news/670054-how-nigerian-agency-mismanaged-n3-2bn-monitoring-unexecuted-projects-irregular-payments-audit-report.html 

Speaking on the Space on Friday, Mr Elemo said the time lag of when the auditor-general report comes out has been a big issue that keeps getting worse.

“I think this is one big issue that we have been dealing with. Unfortunately, it’s getting worse and worse. There’s been some sort of effectiveness in that office to the point that we had the auditor general’s report for 2018 released. The 2019 one came out about 23 months after the end of the financial year.

“Now, unfortunately, the 2020 report came out about 36, I think about 36 or 37 months after the end of the financial year so you could see the trend that it’s getting worse and worse and we’ve had this discussion with the committees on public accounts, both at the Senate and the House of Representatives and there was a convergence of opinion on what should be done,” Mr Elemo said.

He said the legal framework by which the auditor general of the federation functions is obsolete.

“The legal framework is obsolete and not just obsolete, it’s terribly, horribly, embarrassingly, obsolete. We have the Audit Ordinance Act of 1956, it’s a pre-independence audit legal framework. That alone, you know, is not sufficient to provide the legal mandates by which that office should function,” he added.

He explained that there’s no timeline on when the accountant general should submit the financial statement to the auditor general.

“Oftentimes, we’ve had the situation where the delay happens from the office of the accountant general, so when that report is not submitted to the Auditor General, there’s nothing you can do but you now have a situation where the law mandates the Auditor-General immediately the report of the accountant general is submitted,” he said.

Meanwhile, he said there’s a law that mandates the auditor general within 90 days, of which he receives the report of the accountant general to present his audit report on that account to the National Assembly.

He noted that there is also the issue of the dearth of human resources within that office.

“So you have maybe less than 2,000 staff you know, having to audit all embassies across the world, all courts, all ministries, departments, and agencies. How do you do that?” he asked.

“There are legal bottlenecks to it. And until we get those bottlenecks sorted before we can begin to deal with the issue of timeliness,” he said.

Also speaking, Ms Ladipo said the audit report gives a comprehensive overview of exactly what scale of misappropriation is going on among MDAs across the country.

She added that it would have been a step in the right direction if the audit report goes all the way to name and shame people individually such that they are narrowed down and called out by their names, rather than just naming the agencies they fall under or belong to.

Lastly, she said narrowing these down would also help the implementation of recommendations that are made to certain audit reports.

She said out of a large chunk of recommendations that were made for the 2019 report, only about 19 per cent of the issues were addressed and this encourages the notion that people can go against financial regulations without getting punished for it, noting that this is completely wrong.

“So people can decide to go against financial regulations, and there will not be sanctions for it. And this continues to happen over and over again,” she said.

Speaking to the fact that very little allocations are made in terms of funding to the auditor general’s office, Ms Gowon said this is a key factor responsible for the kind of performance that the audit report gets at the end of the day.

Recommendations

Asked how the audit process can be strengthened and also how recommendations can be better implemented from the office of the auditor-general, Mr Elemo said the first thing to get done is to put a legal framework behind what the auditor-general does.

“It is not sufficient to have teeth if you cannot bite,” he said.

He added that the office of the auditor-general is unfortunately not built to bite and as such, does not function like other anti-corruption bodies and its reports are also subject to review by politicians who are in the National Assembly.

He said funding to the office of the auditor-general should be a percentage of the budget, adding that the auditor-general’s office is not to be treated like a ministry, department, or agency.

According to him, the supreme audit institution is not supposed to be under the Federal Civil Service.

Asked how the relationship that exists between the Audit office and public offices like MDAs can be smoothened and whether it affects the independence of the audit office, Ms Ladipo responded saying a lot of things are the way they are in this country due to the absence of consequences.

She noted that MDAs have been seen to spend monies that are not backed by appropriation and, as such, cannot be accounted for, the highest form of disregard of the law.

She said the office of the auditor-general has to be empowered to be able to move beyond making recommendations to actually taking actions while noting that the Public Accounts committee should be mandated to publish the names of people who are responsible for these mismanagement.

Asked how a solution mechanism that will address the loopholes that have been identified can be built in the public accounts system, Ms Gowon presented a three-prong solution approach.

“The first of which is establishing a better and a working legal framework, enforcement of this framework has also been described as very critical in the actualisation of the objective.

“The final prong which is monitoring of the process by the public, civil society organisations, by the media and private sector as well.”

She added that independent data gathering can be done by the public and CSOs to drive the message towards meeting the objective of public accountability.