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‘How 265 government agencies violated fiscal, audit rules’


AuGF, Anthony Ayine. Photo: OAUGF

• MDAs in fresh misappropriation of over N300b
• BPE, SEC, CAC, the foreign ministry, varsities involved

About 265 agencies of the Federal Government have violated the fiscal and audit rules governing the operations of government accounts in 2017. This has resulted in more than N300 billion not being accounted for.

This is the position of the Office of the Auditor-General for the Federation which last week released the 2017 report after The Guardian accused it, the National Assembly and the presidency of negligence and continued delayed in unveiling the document nearly two years after the end of the fiscal year.


While 160 agencies failed to submit their audited accounts for 2016; 265 agencies defaulted in the submission of their audited accounts for 2017; while 11 have never submitted any financial statement since inception.

By the provisions of the Financial Regulation 3210(v), chief executive officers of government corporations, companies and commissions must submit both the audited accounts and management reports to the auditor-general of the federation (AuGF) not later than May 31, of the following year of accounts.

The AuGF, Anthony Ayine, said that though there were marked improvements since the last report, “there are still some violations of statutory financial reporting obligations by parastatals.”

Worrisome still is the fact that the MDAs and their accounting officers are not responding promptly to audit observations till now, a situation which is made worse by the government’s refusal to create or sign the already passed bill containing sanctions.

“Stringent sanctions, including withholding financial releases and sanctioning of the chief executive officer, should be imposed on defaulting agencies who do not render timely accounts, as provided in the constitution, financial regulations and other relevant laws.

“A number of major weaknesses and lapses in the management of public funds and resources were identified across several MDAs during the yearly audit,” he said.

Like in 2016, the report’s findings ranged from irregular expenditures to failure to surrender surplus revenues running into billions of naira to the treasury. Also notable was the constant failure in the implementation of the International Public Sector Accounting Standards (IPSAS) and general significant weaknesses in expenditure control, accounting, financial reporting and in the completeness and accuracy of the consolidated financial statements.


The 2017 audit report showed that the majority of the revenue-generating agencies and other MDAs did not remit withholding taxes, value-added taxes, stamp duty, capital gains tax and pay as you earn, among others.

Led by the Bureau of Public Enterprises (BPE) with unremitted N7.59 billion, and followed by the National Examination Council (NECO) and the Securities and Exchange Commission (SEC) with N6.67 billion and N2.29 billion, among others, the default caused significant reduction in revenue accruable to the Federal Government.

Besides, the auditors found that the agencies dissipated funds on overhead expenditure and extra-budgetary expenditure on contracts, thereby reducing their operating surpluses. The BPE was also involved in unauthorised investment of idle funds without remittance of interest/returns to the Consolidated Revenue Funds to the tune of N24.77 million, from N13 billion deposit for privatisation and operational bank account with some commercial banks, in violation of the Treasury Single Accounts (TSA) policy of government in the circular of August 7, 2015.

Also, audit reconciliation of operating surplus revealed that N2.82 billion was placed in various banks as of December 31, 2016, without authority and a provision of ₦183.13 million made for doubtful balances.

“I recommend that a proper strategy to improve the oversight of revenue-generating agencies should be devised and implemented.


“Adequate sanctions should be implemented against the heads of agencies failing to remit appropriately and in a timely manner,” Ayine added.

A review of the payment procedures and policies in MDAs against the standing regulations and policies of the Federal Government showed that several payments worth ₦26.6billion were made with 140 infractions by MDAs.

Specifically, N8.61 billion was expended on 25 infractions without presenting payment vouchers to justify the payments. This is contrary to the provisions of FR 601, which state that “all payment entries in the cash book/accounts shall be vouched for on one of the prescribed treasury forms.

“Vouchers shall be made out in favour of the person or persons to whom the money is actually due. Under no circumstances shall a cheque be raised or cash paid for services for which a voucher has not been raised.”

Also, 10 MDAs embarked on international travels and training without requisite approval from the appropriate authorities as specified in extant circulars, expending N2.66 billion, despite strict restriction, while another N2.79 billion was expended without supporting documents to the payment vouchers in 22 infractions.

Of the violations in the 134 agencies of government, the National Health Insurance had over N7billion and the Ministry of Foreign Affairs had N4.53 billion.

The agency was followed by the Corporate Affairs Commission at N2.92 billion; Plateau State Universal Basic Education Board, N1.61 billion; and Federal University of Technology, Owerri, N1.05 billion, among others.

Again, 51 procurement transactions across several MDAs did not comply with the provisions of the Public Procurement Act 2007, with N27.83 billion classified as waste or loss of public funds.

These violations ranged from ignoring due process, over-invoicing/contracts’ prices inflation, to payments for contracts/services not executed and other forms of deviations from the Act.

Again, NECO was variously involved in more than N13 billion irregularities, while the Nigerian Ports Authority made over N7billion payments for services not rendered and contracts not executed.

MDAs also sustained the disbursement spree reported in the 2016 audit, granting cash advances to staff without regard to relevant rules and regulations, as N1.41 billion remained unretired.

Another N1.19 billion was granted as cash advances by 21 MDAs above the threshold of ₦200,000, which indicates the circumvention of procurement processes and avoidance of tax deductions, while N1.53 billion is now unrecovered loans.

The Security and Exchange Commission was again involved with N1.48 billion, followed by the Federal Capital Territory Administration, N362.48 million and Ministry of Foreign Affairs, N234.62 million.

The Programme Officer, Good Governance, Centre for Social Justice, Victor Emejuiwe, expressed worry over the persistent lack of fiscal responsibility in governance.


He warned that the government revenue drive from taxes would not yield any positive impact if agencies saddled with the responsibility are not remitting accrued revenue.

“The 2017 report shows failure of the MDAs to comply with circulars from the accountant-general and auditor-general on policies that will ensure probity and accountability.

“Therefore, the passage of the pending audit bill will provide sanctions for erring public officers and President Muhammadu Buhari should quickly assent to the audit bill, as this will address some of the issues raised by the auditor-general,” he said.

But Rivers State-based economist, Ucha Wagbo, said the series of reports of misappropriations of the hard-earned public fund and debt proceeds left one with no option than to blame the government for not conducting inquest to unravel the cartel behind them.

According to him, the 2017 report is not different from the 2016 version, where monies were disbursed and others kept without proper accounting, while nobody seems to be answering for the malfeasance committed against a sovereign state.

“The anti-corruption campaign is seriously called to question, when an audit report on the financial statements of the federation is severally indicting agencies manned by civil servants and individuals appointed by the government, yet everything appears normal.

“These funds are not just earned by government, but include borrowed sums, and smartly frittered through negligence, collaboration and misappropriation. We cannot make a headway like this,” he said.


The Partner/Head of Tax and Corporate Advisory Services at PwC, Taiwo Oyedele, noted that a sustained trajectory of fiscal indiscipline would continue to hold down the level of trust between the people and government, which is already low.

“Trust suffers in the absence of accountability and transparency, which is reflected by the failure to prepare accounts by many MDAs and the various infractions noted in the audit report for the federation.

“To achieve the Nigeria we want, there must be a commitment to accountability by government and all MDAs with severe consequences for non-compliance,” he said.

A public affairs analyst, Jide Ojo, told The Guardian that he was not entirely surprised at the revelations from the 2017 audit report, adding that it would “continue to get worse because there is a growing culture of impunity in the country.”

“How many of the MDA’s were indicted in the 2016 report and how many have been punished for non-submission of reports or the infractions committed? There will only be positive change when the full weight of the law is brought to bear on the violators.

“It is very disheartening that a government that prides itself as a ‘government of change’ and whose main campaign slogan is anti-corruption will condone all these corrupt practices by MDAs,” he said.

The Lead Director of CSJ, Eze Onyekpere, faulted the delay in releasing the 2017 audit report 19 months after the end of the financial year to which it relates.

“Overall, the findings were indicative of significant weaknesses in expenditure control, accounting, financial reporting and in the completeness and accuracy of the consolidated financial statements. Responses to audit queries did not improve in the year under consideration.

“Essentially, the report is a litany of woes, evidencing the poor management and lack of accountability of the federal fiscal system. It is pathetic for our country,” he said.


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