BACKGROUND AND CONTEXT
The place of Audit in ensuring effective and efficient management and utilisation of resources in the Public Finance System cannot be over emphasised. This is why we are worried about the apparent systemic neglect of audit and the audit process in our public finance processes.
The audit role though one expected to be performed by autonomous professionals, is as it is currently practiced in our public and civil services, one that is put in a handicapped position. And although all MDAs are expected to, and do have Audit units, the personnel who man them report directly to officers in senior management who are responsible for the processes that these auditors are expected to audit.
Furthermore, these personnel are also expected to clear their reports with their managers before these are shared with the Auditor General’s office. In addition to these, the audit units are often underfunded and do not have access to the requisite resources, human, material, and financial, to enable them carry out their functions appropriately.
The implication of these is that though audit units exist and auditors are employed, they do not enjoy the institutional autonomy and capacity to render efficient and effective service.
The more appropriate, systems strengthening, and institution building approach to take would have been for the audit function to be institutionalised in the civil and public services, with the Office of the Auditor General, which is a constitutionally established office overseeing and directing, including in line management terms the audit functions across board.
In addition to the foregoing, another major gap in the audit process in our public finance is the interface with the legislature. The constitution mandates the office of the Auditor General to audit the public finances annually, to prepare annual audit reports, and to submit such reports to the legislature. The legislature is then expected to consider and interrogate the annual audit report led by its Public Accounts Committee, again a constitutionally established statutory legislative committee.
The lacuna in the effective operationalisation of this processes is seen in the fact that the audit reports are lagging, they get to the legislature late, and the legislature oftentimes does not treat the reports with the seriousness and urgency that such an important matter deserves.
Yet if we are to curb wastages in public finance, if we are to enthrone transparency and accountability, and if we are to fight corruption effectively, the way we organise and treat the audit process must change and be radically transformed.
THE 2017 AUDIT REPORT
It is in the light of the foregoing that we the conveners of Say No Campaign and related anticorruption groups are appalled by the details of the 2017 annual audit report of MDAs in Nigeria published by the Office of the Auditor General of the Federation.
It is disturbing to know that over 160 parastatals in Nigeria failed to submit their financial statement or management reports to the office of the Auditor General, in flagrant disregard to constitutional provision, section 85 of the 1999 constitution and the financial regulation 321 (v), which mandates all parastatals to make such submission annually.
Interestingly, 11 more parastatals were reported to have never submitted their financial statements or audited financial reports, to the office of the AGF since their inception. Yet, they have continued to enjoy resources appropriated by the National Assembly and the office of Budget and National Planning for subsequent years.
We find this highly irresponsible and unacceptable! It directly indicts not just the defaulting parastatals, but also the National Assembly and the office of Budget and National Planning as complicit in this ongoing fraud. The national assembly receives annual audited financial report as submitted by the office of the Auditor General whose remarks indicted the erring parastatals. However, in sheer disregard, the National Assembly pass subsequent appropriation to these MDAs without recourse to the report submitted, and in violation of its Acts, thereby, abetting the obvious impunity exhibited by erring parastatals in ignoring their constitutional duty to be accountable in spending public funds.
The report also revealed acute financial mismanagement by MDAs and their failure to remit surplus funds, in billions, back to the country’s treasury. The overwhelming recklessness of these MDAs and their chief executives have caused this country significant waste of time and resources, poor performance, and set the country back economically and infrastructure-wise. Nigerians deserve better!
This report is coming at a time when the Nigerian government is financially desperate to meet its basic responsibilities, hence accumulating foreign debts, against experts’ advice, and drastically stifling the meagre purse of the ordinary Nigerians in the guise of generating revenue to maintain its high cost of governance that has not benefitted the country in years. Accountability of public institutions is the least the government can offer its people for their continuous sacrifice and torture despite the prevailing economic situation. This acute waste and irresponsibility cannot be tolerated!
The questions, which bug the mind then, is what happened to the unremitted surplus resources in these MDAs? Who are the chief executive officers of these parastatals and why have they not been picked up for prosecution? What are the ministers of these MDAs doing to address these massive acts of corruption going on in their various ministries? How will the National Assembly defend itself for ignoring such damning reports and continue to feed these MDAs fat on the nation’s resources through the years?
This report has the needed potential to transform the anticorruption campaign of the country and bring traction to accountability in public institutions if the anticorruption agencies will leverage it for their investigation and prosecution.
This report has exposed the gaps in our laws, which fails to clarify sanctions for violations. This only weakens government institutions that can only bark but unable to bite, thereby frustrating the fight against corruption. The office of the auditor general does not have the powers to compel MDAs to comply with the law, hence, the disregard.
The report made some Key recommendations including the call to withhold revenue appropriation to these erring MDAs, alongside other stringent sanctions, which must not be neglected. The national Assembly must wake up to its responsibility of adequately representing the people and take seriously its oversight function to ensure full compliance with laws enacted, as failure to do so impact gravely on the people they are meant to represent.
We by this statement are therefore demanding:
- That the names of defaulting agencies and their chief executive officers be published and full investigation to commence by the antigraft agencies.
- We call on the anticorruption agencies to be proactive in responding adequately to these damning allegations and take the necessary actions to hold these officials and their agencies responsible. We demand that Erring CEOs should be sanctioned, and made to submit all outstanding financial reports which should be thoroughly scrutinized by the office of the auditor general.
- That the national assembly; the office of budget and national planning and the Minister of finance commit to thoroughly scrutinize the audited reports and consider the recommendation to withhold further allocations to these defaulting MDAs until they have satisfied all sanctions.
- Pursuant to the foregoing, we also call for the passage of the pending Audit bill to address the concerns raised by the auditor general; and to conduct review of our laws that have failed to clearly specify sanctions on violators, thereby hampering the nations’ anticorruption efforts.
- Furthermore, as we expect that the president should be livid, and rightly so, over this revelation and consider the actions of these parastatals a sabotage to the legacy of his administration to improve governance, we call on President Buhari to caution his ministers, prod them to be responsible, and sanction the ministers responsible for defaulting MDAs. We demand that he direct expedite action by the antigraft agencies over the conduct of these MDAs and their chief executives.
Ordinary Nigerians are daily making huge sacrifices to fund and support the government, yet, cost of governance continue to rise in the country because of the excessive greed of its leaders who have continuously failed the country and its people. We urge president Buhari to make it his legacy to sanitize public institutions, weed it of irresponsible leadership, destroy the chain of impunity and give Nigerians value for their patience and trust!
God Bless the Federal Republic of Nigeria
Peering Advocacy and Advancement centre in Africa- PAACA
Civil Society Legislative Advocacy Centre-CISLAC
Centre for Transparency Advocacy
African Centre for media and Information Literacy-AFRICMIL
Protest 2 Power