The Problem Statement
Globally, auditing is a means of controlling and balancing the financial management of an organization, both public and private.
The lack of financial audit may, however, fuel corruption, misappropriation of funds, and undermine the ability of an organization to fulfil its mandate.
Over the past decades, and so far, the corruption pandemic in Nigeria has weakened public institutions, undermining the principles of accountability and transparency in the management of public wealth.
In the presidential campaign of 2019, the Buhari-led APC, with the ‘Change’ agenda, promised to fight corruption as one of the policy-thrusts.
According to the Chairman Committee investigating allegations of deliberate and reckless refusal by non-treasury funded Ministries, Departments, and Agencies (MDAs), Hon. Oluwole-Oke, 323 MDAs did not submit their audited reports to the OAGF in 2016, compared to 215 unsubmitted reports in 2015; 148 in 2014; 109 in 2013; 85 in 2012; and 76 in 2011.
Worst of all, the 2018 and 2019 Audit Reports are yet to be submitted to the National Assembly.
MDAs are reluctant to submit their audit report to the OAGF for review and verification.
In addition, section 85(3) of the 1999 Constitution (as amended) prohibits the power of the OAGF to audit statutory corporations and bodies.
This act is contrary to the anti-corruption crusade and encourages financial negligence and the depletion of public funds by defaulting MDAs. It is therefore frustrating and hindering development efforts in Nigeria.
Civil Society Organizations (CSOs) such as the Paradigm Leadership Support Initiative (PLSI), the BudgIT Foundation, SERAP, PTCIJ, Step Up Nigeria, and Connected Development (CODE) are at the forefront, calling on the National Assembly to address this huge issue.
The Policy solution
As a policy response, the constitution of the Federal Republic of Nigeria (1999), as amended, provided for the Office of the Auditor-General for the Federation.
The OAGF is mandated to audits all government MDAs and to hold them accountable for their stewardship in the use of public resources.
The Federal Audit Service Commission (FASC) Bill 2019 was sponsored by Sen. Matthew A. Urhoghide, PDP representative of Edo State.
He also served as the Chairman of the Public Accounts Senate Committee.
The Bill entered first reading on 30 July 2019, second reading on 8 May 2019, and third reading on 22 May 2019.
Following a series of reviews by the legislature, the FASC Bill 2019 was passed by the 8th National Assembly and sent to the President, Muhammadu Buhari, for assent.
The Bill, when passed into law, is expected to set up a Commission that would have a chairman and six commissioners from the six geopolitical zones of the country.
According to the sponsor of the Bill, he said: “The Bill is very important to the nation because passing it into law will form the foundation for the fight against corruption, which is one of the main objectives of the administration of Mr. President’s administration”.
In addition, the bill empowers the OAGF to issue audit queries and directs the withholding of emoluments and allowances due to defaulters after 30 days of issuance of the query that the person is deemed to have failed to comply with; summons persons to appear before him orally or in writing and, if the person fails to appear without a reasonable excuse, to give evidence, issue a warrant to the Police for the arrest of such person; and penalizes persons who give false evidence or refuse to take a witness oath or affirmation.
Section 58 Subsections 4 of the 1999 Constitution (as amended) gives the President 30 days to reply to the bills transmitted by the National Assembly.
The Bill, however, failed to be assented to by Mr. President. There was no reason from the presidency why President Buhari withheld his assent to the Bill.
In fact, the Bill did not see the light of the day under the 8th national Assembly. It’s hoped that the 9th National Assembly will liaise with the presidency to revisit the bill for the benefit of the Nigerian people.
NIGAC Constructive Position/Take
The FASC Bill 2019 is a good tool to address the issues of poor governance, waste of public funds, inefficiency, lack of accountability and transparency in the public sector.
The Bill ensures that public officials and institutions are held accountable for the administration of their mandates.
When the bill is passed into law, the Auditor-General shall have additional powers to inquire, examine, investigate and report as he deems necessary on the expenditure of public money and money advanced or granted to a private organization or body in which the Federal Government has control of interest.
However, the FASC Bill 2019 is without a few faulty areas that need to be corrected. The Bill, therefore, needs to be reviewed in order to capture current realities on the ground. First, due to reducing national revenue, there is no need to set up a Commission to carry out the mandate.
Instead, a division carrying out a similar mandate within the OAGF should be empowered by building its capacity to deliver measurable results.
In addition, Federal Government agencies such as the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and other Related Offences (ICPC) have almost the same functions.
Second, considering the presence of highly-ranking ‘cabals’ either in the presidency, the National Assembly or the private sector, the position of Auditor-General should not be appointed by the President or recommended by the Minister of Finance.
It is recommended that the appointment be made independently and, on a merit-based basis, by selecting the Auditor-General who performed so well from any state in Nigeria.
Third, inadequate inter-agency collaborations and the sharing of relevant information undermine the fight against corruption in Nigeria.
Strengthening effective synergies between these agencies would therefore go a long way towards promoting accountability and transparency in the financial audit system.
Without implementing the issues identified above, the heads of the MDAs would continue to undermine Mr. President’s anti-corruption crusade.
In conclusion, key stakeholders, including civil society organizations such as CODE, PLSI, BudgIT, SERAP, PTCIJ, and Step Up Nigeria, should continue to exert pressure on the President and the 9th National Assembly to re-visit the FASC Bill 2019 and make it a top priority.
Continued advocacy by the media and the general public is needed to ensure speedy assent to the bill.
If assented to by the President and ‘gazette’ or passed into law by the Chief Justice of the Federation, it would help to strengthen good governance by increasing transparency, accountability and internal financial control across the federal government’s MDAs.
Revenues leakages in the MDAs would be blocked and finances would be channelled to key sectors such as health, education, and infrastructure projects in the construction of roads, railways, seaways, as well as power and energy development.