The Federal Government failed to comply with the provisions of the Fiscal Responsibility Act (FRA), 2007 and International Public Sector Accounting Standards (IPSAS) with respect to the submission of its Consolidated Financial Statements.
According to the Section 49 (1) of the FRA, 2007, “the Federal Government shall publish their audited accounts not later than six months following the end of the financial year”.
Paragraph 69 of the IPSAS 1 warned about the damage a delay in making available within 6 months the financial statements could cause.
The IPSAS states that:
“The usefulness of financial statements is impaired if they are not made available to users within a reasonable period after the reporting date. An entity should be in a position to issue its financial statements within six months of the reporting date. Ongoing factors such as the complexity of an entity’s operations are not sufficient reason for failing to report on a timely basis. More specific deadlines are dealt with by legislation and regulations in many jurisdictions”.
Despite this, the Accountant-General of the Federation (AGF) submitted the Federal Government of Nigeria (FGN) 2019 Consolidated Financial Statements (CFS) for audit 10 months late.
According to the Auditor-General for the Federation, the CFS for the year ended 31st December, 2019, was submitted to him for audit on May 25, 2021, which is late by 10 months.
Even with the late submission, the CFS was filled with financial errors which may be blamed on unaudited Trial Balance which was submitted to the Auditor-General, giving room for financial foul play and errors. With late submission, the Nigerian government had enough time to prepare an audited Trial Balance but failed to. Whereas late submission of the CFS might have been blamed on Trial Balance audit, the Nigerian government even with enough time to prepare an audited Trial Balance failed to do so.
Unsurprisingly, Dataphyte’s review of the 2019 Audit report revealed varying degrees of discrepancies.
Also, using the 6 months submission timeline as stated in the FRA and IPSAS with respect to CFS and publication of the audited accounts, the government is already in violation of extant regulations given that the 2020 audit report is yet to be published.
In the same vein, the audit report of the N99 billion COVID-19 donation is yet to be released, despite public calls on the National Assembly, Auditor-General and Coalition Against COVID-19 (CACOVID) to do so.
25 MDAs Didn’t Also Comply with Regulations
The 2019 Audit report has also revealed that 25 Ministries, Departments and Agencies (MDAs) did not comply with extant regulations.
Section 85(2) of the 1999 Constitution of the Federal Republic of Nigeria (as amended) states that “the public accounts of the Federation and of all offices and courts of the Federation shall be audited and reported on by the Auditor-General who shall submit his reports to the National Assembly; and for that purpose, the Auditor-General or any person authorised by him in that behalf shall have access to all the books, records, returns and other documents relating to those accounts”.
Paragraph 110 of the Financial Regulations further buttresses this, noting that the Auditor-General is entitled to require and receive from members of the Public Service such information, reports and explanations as they may deem necessary for the proper performance of their functions.
However, it was observed in the Audit report that out of a total 72 MDAs circularised, 25 MDAs failed to respect the circularisation effort, which is an important aspect of the audit process.
With practices like this, the fight for transparency and accountability in government dealings continues to be sabotaged. Reluctance and delays to audit processes are abetters of corruption leaving room for nefarious dealings.
It is important that the Federal Government practices what it preaches by adhering to the stipulations of the law on Consolidated Financial Statements. A clear stance of strict adherence to regulations will send a clear message to other agencies of government that they’re not above the law. The Auditor-General’s regulations and recommendations raised in the 2019 Audit report should be followed to the letter.
Organisations like the Economic and Financial Crimes Commission (EFCC) should pay attention to the Auditor-General’s report and take actions against defaulters.