Nigeria’s audit challenge and tardy corruption war

From personal interest to lack of political will, the all-important enactment that would strengthen fiscal laws, provide undeniable evidence of a breach of public trust and effective anti-corruption war, has remained in limbo.

The Federal Audit Reform Bill was introduced to the National Assembly (NASS) as a private member’s bill and went through legislative processes, including a public hearing, passed by the lawmakers, but President Olusegun Obasanjo did not sign it before leaving office in 2007.

During the first term of President Muhammdau Buhari, a second attempt also succeeded in getting the Audit Reform Bill passed by NASS again and transmitted to him in February 2019 for assent, but he ignored it.

The Executive Director, Media Rights Advocacy, Edetaen Ojo, said: “A third attempt is now being planned to present the same bill to the ninth NASS for consideration, but the entire process would be starting from scratch. There is now the need to take a more strategic approach in advocacy to ensure legislative success and Presidential assent,” Ojo said.

At the Audit Capacity Building Workshop, organized by the Centre for Social Justice (CSJ), in collaboration with the Rule of Law and Anti-Corruption Programme of the British Council and supported by the European Union, the civil society and professional groups, renewed their plans to pursue the enactment of the much-sought Audit Bill that has missed Presidential assent twice in the past 12 years.

The Centre for Social Justice (CSJ), with the support of the European Union, is leading the project on improving the effectiveness of the Federal Audit Process and Reforms, designed to achieve three key objectives, in line with international best practices.

These include advocating the enactment of the Federal Audit Service Commission; build the capacity of civil society and media to demand and monitor compliance of MDAs with the Audit laws; and support the office of the Auditor-General of the Federation, Public Accounts Committees and MDAs to improve practice.

The Lead Director of CSJ, Eze Onyekpere, said that after the implementation of each budget cycle, it is the duty of the Auditor-General to review whether the country had value for money and whether the money was spent in accordance with appropriation, financial instructions and regulations, and public finance management laws.

“If you look at audit reports in previous years, you will see a whole lot of money running in billions of Naira, which have not been properly brought into accounts. So it is a weak part of the chain in public finance management and unfortunately, despite the reforms going on, not much has been done in audit reforms,” he said.

But speaking on the travails of the audit reform bill, he said it was not clear what happened in the eighth assembly, in which the bill was passed and duly forwarded to the President for assent, but he neither assented to it nor communicated the assembly to explain what his reasons for refusing to sign the bill were.

Citing a section of the bill, which sought to empower the auditor-general to surcharge and withhold emoluments of any officer culpable of the loss of value in public treasury and refusal to respond to audit query; and power to summon any officer and put same under oath, he said these may not have gone down well with those with vested interest, hence, the intrigues behind the bill’s misfortunes.

“This also creates the impression that somewhere along the line, this bill must have fallen through the cracks. I do not want to believe that the President deliberately does not want to sign the bill, but somebody, somewhere is causing the mischief by not drawing his attention to the bill, otherwise I cannot understand why a President who is leading anti-corruption fight should not be interested in audit bill.

The Chairman of Independent Corrupt Practices and Other Related Offences Commission (ICPC), Prof. Bolaji Owasanoye, agreed that audit report remains strategic in the fight against corrupt practices in the country.

Represented at the workshop by his Director of Finance and Accounts, Toyin Ayeni, he also admitted that if the audit reports were implemented and made to work as it should be, the country would have gone past the stage it is currently, as auditors are well placed, based on their professional knowledge and training, to combat corruption if there is adequate political will.

“Auditing involves the use of auditors’ “Tool Kit”, which is also very useful in fighting corruption. These are Regulatory (Compliance) Audit; Financial Audit; and Performance/Value for Money Audit.

“Regulatory (Compliance) Audit is carried out periodically to ensure that expenditure incurred are in line with the approved budget and in accordance with statutory provisions and extant rules.

“Financial Audit establishes that accounting and financial control systems are efficient and operating properly, such that all financial transactions are duly authorised and accounted for. It is also to establish that the financial statements of the agency represent a true and fair view of the state of affairs for the period under reference.

“Performance/Value for Money Audit is a comprehensive and efficiency audit, which aims at maximising the utilisation of scarce resources, by ensuring that activities and programmes executed are at a reasonable cost and of a very high standard. It is concerned with the efficient, effective and judicious utilisation of resources.

“The Audit function covers more ground than the work of the Anti-Corruption Agencies (ACAs), given that every financial transaction of government undergoes an audit, whereas ACAs can only cover at best a sample (petitioned or detected).

The auditor, therefore, has more opportunity and thus, more responsibility for the eradication of corruption in our public finance system,” Ayeni noted.

A retired Director/Clerk of the National Assembly’s Public Accounts Committee (PAC), Titus Ajina, explained that committee, which has enormous powers over public finances, remains “work-in-progress”, as it is bedeviled with so many challenges till now.

“If PAC is fully active, corruption would have been degraded and the fight against won,” adding that while there are notable changes in its activities, it is still weighed down by poor appropriation and facilities to work optimally.

Speaking on the audit reform bill, he noted that there is a need for increased powers to the auditor-general to ensure compliance by all the agencies of government under its statutory mandate for auditing.

“In some countries, the Auditor-General is powerful. When the auditor invites you, it’s obvious that there is a problem and you dare not fail to respond. We are not there but need to get there.

“In Nigeria, Public Accounts Committee (PAC) is the only Standing Committee of the Legislature established by the Constitution. Sections 85(5) and 125(5) of the 1999 Constitution of the Federal Republic of Nigeria (as amended) states:

“The Auditor-General shall, within ninety (90) days of the receipt of the Accountant-General’s financial statement, submit his reports under this Section to each House of the National Assembly and each House shall cause the reports to be considered by a Committee of the House of the National Assembly responsible for Public Accounts”. S. 85(5).

“The Auditor-General for a State shall, within ninety (90) days of receipt of the Accountant-General’s financial statement and annual accounts of the State, submit his report to the House of Assembly of the State and the House shall cause the report to be considered by a Committee of the House responsible for Public Accounts”. S. 125(5)

Ajina said the purpose of the committee is to have a detailed study and consideration of audit reports of government expenditure as reported by the Auditors – General for the Federation, for a state and Local government; conduct status inquiry of the income and expenditure of MDAs; and referrals from the plenary.

According to him, none of the reports from the auditor-general has received a legislative hearing, which means that the reports would end up on the shelves and not acted upon.