Says Nigeria still using 1956 audit ordinance
Ndubuisi Francis in Abuja
The Auditor-General for the Federation (AuGF), Mr. Anthony Mkpe Ayine, has observed that there is a correlation between the amendment in the 1999 Constitution, which tempered the powers of the Office of the Auditor-General for the Federation (OAuGF) to audit the accounts of all government agencies (as earlier provided in the 1979 Constitution) and the current lamentations by the federal government that revenue generating agencies are under-remitting to the Consolidated Revenue Fund (CRF).
The National Economic Council (NEC) had last week disclosed that the final report on the forensic audit of revenue accruals by revenue generating agencies confirmed massive under-remittances to government coffers.
The report prepared by KPMG covered 18 revenue generating agencies, including the Nigerian National Petroleum Corporation (NNPC), Federal Inland Revenue Service, (FIRS), Nigeria Customs Service (NCS) and Nigerian Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency (NIMASA).
Others are Nigerian Communications Commission (NCC), Central Bank of Nigeria (CBN), Department of Petroleum Resources (DPR), and the Nigerian Petroleum Development Company (NPDC), among others.
“Let me at this stage point out something which Section 85 (3) has done. In the 1979 Constitution, a provision was very clear. All the parastatals were audited by the auditor general. But in the 1999 Constitution a provision was made in Section 85 (3) which says that auditor general cannot audit government parastatals but rather it provides a list for the parastatals to find their own private auditors. The auditor-general can only do periodic checks. But today, the public may not understand it.
As at 1979, the Auditor-General had the mandate to do full-scale audit but today these parastatals have their own internal auditors. We do just periodic checks on them.
From what we are seeing today, lots of these parastatals are in arrears. When their accounts are audited, they forward to the Accountant-General for review and comments.
“You can only review and comment when the account has been forwarded to you but what happens when the account has not been audited, and that is where you see there are lots of them. Recently, we were discussing with the Public Account Committee of the Senate and they have seen it,†he said.
Ayine believes that had the provisions of the 1979 Constitution, which gave the Office of the Auditor-General for the Federation full powers to audit the parastatals not being eroded in the 1999 Constitution, revenue agencies would not have had the latitude to under-remit to government coffers.
Ayine lamented that Nigeria still uses the Audit Ordinance of 1956, and urged the National Assembly to fast track the passage of the Audit Bill currently before the parliament to conform with global best practices
He applauded the efforts of the National Assembly to pass the Audit Bill, regretting that the country has been losing a great deal, and relegated to the level where it should not be because of the absence of an audit legislation.
According to the AUGF, the absence of a specific audit legislation or act of parliament as is the norm globally, has become a major encumbrance to the growth of the OAuGF as other Supreme Audit Institution within Africa and beyond.
“From the assessment we have been having in the area of capacity building which we have started something significant in that area, there are still gaps which we are working on now. Of course, we also have the issue of the Audit Bill for our Supreme Audit Institution, because as you may be aware, we are still using the Audit Ordinance of 1956, which is not good for us.
“For an audit law which has been on for quite a number of years–about sixty years, a legislation in this regard will be very important. It is one of those few challenges where we are ranked among others (even within African countries); we are marked down because we don’t have a specific audit legislation in existence.
“Yes, it’s true that the Constitution has given us limited independence, but the expectation of the global community is that there should be a specific audit act which we are yet to have and to me, that is the number one challenge that we have. If we are able to have an audit act, it will enhance our rating and I think it will help us very much,†he said.
Ayine noted that the OAuGF has been working with the Senate Public Account Committee (PAC) to ensure the enactment of the Audit Bill, adding that the bill has been passed by the House of Representatives and is before the Senate presently
“I think we have made some progress. I must commend the Senate and the Senate PAC. We have made very significant progress, attended a retreat to review the bill that was passed by the House of Representatives and I think good progress has been made for the passage of the bill. So, we are still interfacing with the Senate Public Account Committee towards the passage of this bill,†he stated.
The AuGF observed that putting in place an audit legislation would confer the badly- needed operational independence and other advantages on the OAuGF, including the power to recruit its personnel as opposed to the extant practice where the Federal Civil Service Commission recruits for the Office.
“Yes, it’s true that the allocation to the Office has been quite low; that is exactly one of those things which the passage of the Audit Bill will help take us out from the current financial challenges we are having. When the bill is passed, we will overcome this significantly.
“It will give us a level of financial independence which is exactly what we are talking about. It will not just give us only the legal independence but also financial independence. We will have a kind of operational independence so that we will help this Office to function more effectively,†he said.
Explaining the desirability of operational independence, he said the coming into existence of an audit act would empower the Office to recruit the kind of staff it needs.
His words: “For instance, you find a situation in terms of personnel, we don’t have that level of independence where you recruit your own personnel. You pass through the Federal Civil Service Commission and you don’t have the opportunity of selecting the quality of staff you need.
“It starts from there because from the point of recruitment, you are supposed to be in a position to know the quality of staff you are looking for, so you have certain criteria in your selection. But here we don’t have that. The staff being recruited at the head office are appointed so it’s like you are having the personnel made available to you and the problem starts from there.
“The quality of staff you have will affect the work you are doing, so when the bill is passed and we have audit commission then we will have the privilege of selecting the quality we want,†Ayine added.
