Mainstreaming audit culture in MDAs | Dailytrust

Mainstreaming audit culture in MDAs

Federal Secretariat

From the report of the Auditor General, Nigeria is yet to recover over N10 trillion  (from Ministries, Departments and Agencies (MDAs) as a result of audit infractions witnessed in more than 265 of them.

These infractions are perpetrated through failure of revenue-generating agencies to remit their operating surplus to the Consolidated Revenue Fund. Other infractions include; unauthorised deductions from the Federation Account, public procurement and disposal infractions, unretired loans and advances, as well as extra-budgetary and unauthorised expenditure.

The 2014-2017 Audit Report indicates that 160 agencies defaulted in submission of audited accounts for 2016; 265 agencies defaulted in submission of audited accounts for 2017; while 11 agencies have never submitted any financial statements since inception.

The constitution mandates the Auditor General of the Federation to conduct a periodic audit of the MDAs as well as appoint certified auditors for government statutory corporations, commissions, authorities, agencies, including all persons and bodies established by an Act of the National Assembly. The list of qualified auditors is to be appointed by the MDAs as external auditors.

The auditor general is mandated to check if accounts relating to public funds have been properly kept, it is also expected to determine in his opinion if all public monies have been fully accounted for, and the rules and procedures applied are sufficient to secure an effective check on the assessment. Also, the AUGF is to determine MDAs’ compliance for collection and proper allocation of revenue.

For MDAs to pass audit assessment credibility, they are required to maintain accurate financial records of their transactions in line with the revenue allocation and expenditure. The MDAs must subject their accounts to internal audit procedures where accurate checks and balances are conducted. A process audit must be mainstreamed amongst the MDAs, this helps to avert fraud and provide early warning signal in fraud detection.

An audit culture also consists of routine performance audit. Before the expiration of the tenure of former President Goodluck Jonathan, he launched performance audit compliance amongst MDAs. The performance audit would help to ascertain the progress attained in relation to revenue received by the MDAs. The performance-based audit is meant to showcase results achieved by the MDAs on a quarterly basis.

On the list is also the Procurement audit. This is another major audit that should be conducted frequently by the MDAs. The Bureau for Public Procurement does a periodic audit of the MDAs. Notwithstanding, the MDAs should engage procurement specialists to conduct quarterly audits of its procurement in order to avert procurement frauds.

Just recently, the Accountant General of the Federation advised the Auditor General to consider embarking on quarterly audit of MDAs. According to him, the quarterly audits would make the duties of the AGF simple and easy to tackle when financial reports are received from the MDAs. It will also curb the pile-ups of financial reports for auditing.

If adequate resources are made available, the view of the AGF should be strongly considered. This would also help mainstream an audit culture in the MDAs. The quarterly routine would contribute to the capacity enhancement of the responsible officers in the MDAs to resolve audit queries as fast as possible and to also comply with the audit process. It will also lead to increased transparency and accountability in the conduct of government business.

To this end, MDAs must subject their processes to internal audits and the recommendations of the internal auditor must be strictly adhered to. It is also worthy to note that the recommendation of the internal auditor is subject to consideration by the National Assembly. According to S85 (7) of the constitution, the AUGF is to submit audit report to the Public Account’s Committees of the National Assembly and bring to the attention of the National Assembly audit queries raised by the internal auditors of the Ministries Departments and Agencies but over-ruled by the CEO of the MDA.

 

Victor Emejuiwe, Programme Officer (Good Governance), Centre for Social Justice, Abuja