The importance of an effective audit regime in promoting probity, transparency
and accountability in the management
of public resources can not be overemphasised.
Audit as the name implies is simply defined as
a formal examination of an organisation's or
individual's accounts or financial situation.
It is the examination or inspection of various
books of accounts by an auditor followed by
physical checking of inventory to make sure
that all departments are following documented
system of recording transactions. It is done to
ascertain the accuracy of financial statements
provided by the organisation.
Indeed, audit is a process that transverse the
entire public finance management cycle from
budget preparation, implementation up to reporting. It provides the empirical basis for Public finance management reforms as well as the
basis for the determination of compliance with
law law and policies .
In Nigeria, the Auditor General for the federation is seen as an agent for accountability by
facilitating legislative oversight over the expenditure and management of public finance as well
as providing citizens with authoritative opinion of how well public finance has been managed.
Section 85 of the Constitution of the Federal
Republic of Nigeria 1999 (as amended) establishes the Office of the Auditor General for the
Federation and the federal audit function.
The implication of this is that the provision
is considered a very high priority and objective of state policy. Audit as a matter of fact is
considered crucial for the entrenchment and
consolidation of democratic principles and
good governance, transparency and accountability, value for money as well as enhancement of development and continuous improvement of living standard.
It is against this backdrop that Centre for
Social Justice Limited by Guarantee (CSJ) a Nigeria non -governmental organization , in conjunction with European Union, Role of Law
and Anti-Corruption (ROLAC) Programme embarked on Audit Assessment Index (AAI) to
portray its commitment toward improving effectiveness of federal audit processes and reforms in Nigeria.
Addressing participants during the Award
event and presentation of Audit Assessment
Index (AAI) held in Abuja recently, lead director, Centre for Social Justice (CSJ) Eze
Onyekpere, said the AAI framework covered
issues around Federal Ministries, Departments,
Agencies (MDAs's) performance in public sector audit.
According to him, it focused on issues as
contained in the Federal Audit Report 2014-2017
relating to MDAs performance in the various
sections of the reports. He explained that the
AAI focused on the operational performance
of audit and follow-up on audit recommendations and was divided into the following seven
"Access to books, accounts and records, extra
budgetary, unauthorized expenditure and failure in revenue generation as well as remittances. Others were public procurement and
disposal infractions, unrestored loans and advances, monetary value of documented infractions and unauthorized deductions from the
He further explained that sixteen Federal Ministry Headquarters which included: Agriculture and Rural Development, Aviation and Education. Others were: Environment, Health, Finance, Mines and Still Development, Power,
Transport , Trade and Investment,
Also, among the Ministries were Federal Ministries of Science and Technology and Water
Resources, Women Affairs, Works and Housing , Youths and Sports Development as well
as Labour and Employment were assessed in
the pilot edition of the AAI.
The other are four agencies namely: Nigeria
Customs Services, Department of Petroleum
Resources, Federal Inland Revenue Services
and Nigeria National Petroleum Corporation
(NNPC). Onyekpere disclosed that the agencies were the revenue generating agencies included in the assessment to underscore the importance of revenue through generation and
appropriate remittance to the Federation Account.
On the methodology used for the assessment,
Onyekpere, a fiscal expert also, the facilitator of
the project said the AAI was designed from the
presumption that the Auditor General for the
Federation Audit reports constituted the best
primary evidence for the assessment of the performance of MDAs and whether they were complaint to the fundamental objectives and demands of financial compliance, value for money
and other audit demands.
According to him, the assessment focused
on the audit reports for the four years 2014 to
2017. It also proceeded from the assumption
that the Audit General for the Federation could
be implemented by information from the proceedings of the Public Accounts Committee in
the Senate and House of Representatives.
He recalled that in preparing and issuing an
annual report, the Auditor General for the Federation had reviewed the financial books, documents and other relevant information of MDAs
, sought clarification, issued audit queries and
reviewed responses before arriving at an opinion. Saying even though audit is not a trial , but
the fundamental rules of fair hearing -getting all
relevant information and affording party the opportunity to be heard and to make a presentation in the proceedings is observed.
Onyekpere explained that in accordance with
the Lima Declaration, the Auditor General for
the Federation gave due consideration to the
point of view of the audited MDAs in its findings, stressing that a further opportunity is also
afforded in the Public Accounts Committee proceedings.
The lead director who admitted that there was
no need for gathering of primary data including
administering questionnaires on MDAs or conducting oral interviews said the benchmarking
and scoring of the Audit Assessment Index were
there based on the annual reports of the Auditor General for the Federation for the years 2014-
2017 focusing on compliance and infractions
that led to remedial and process recommendations by the Auditor General of the Federation
. On how the MDAs emerged victorious in the
Audit Assessment Index, the Centre boss disclosed that using the Audit Assessment Index
Template and Weight Average Scoring Framework, selected Ministries, Departments and
Agencies were assessed with the average computed in relation to 100 percent, adding that the
ranged from 0-100 points, where 100 is the highest level of good audit practice and zero denotes the absence of good audit practice.
Meanwhile, the Federal Ministry of Science
and Technology emerged the overall winner of
the Audit Assessment Index with the highest
score of 95.69 percent on top of 20 Ministries ,
Department and Agencies (MDAs ) selected
on bases of their respective contributions and
importance to economic growth and development of the country.
Followed by the Federal Ministry of Environment with 90.63 per cent, Transport 89.21
percent , Labour and Employment 86.94 percent as well as Women Affairs with 82.16 percent to complete the 5 top performing Ministries.
Others on the list include: Federal Ministries
of Finance, Budget and National Planning, 81.78
percent, Education-68.88 percent, Youth and
Sports- 67.22 percent, Aviation-65.59 per cent
and Water Resources 64.88 percent to complete
the top ten.
While the Ministries of Trade and Investment
scored 59.13 percent, Works and Housing 54.44
per cent and Health with 52.75 percent to obtain the least scores.
Speaking with newsmen shortly after the end
of the event, the Lead Director of CSJ, Eze
Onyekpere said that the Audit Assessment
Index project was aimed at providing further
evidence to be used as an advocacy took in the
efforts to improve the current audit regime in
He explained that the Audit Assessment of
index was anchored on the fact that beyond
the annual reports of the Auditor General for
the Federation and the legislative hearing in
the Public Accounts Committee (PAC) audit was
a closed affair that hardly attracts public attention.
According to him, it virtually starts and ends
with two reports Auditor General for the Federation annual report and Public Account Committee report-as a government initiative. Hence,
the need for an independent civil society intervention that recognizes good performance
while encouraging moderate and poor performing Ministries, Departments and Agencies
(MDAs) to strive for excellence.
He stated that , "although the Audit Assessment Index is an instrument for all times, there
can be no better time to engage in Assessment
and present same to the public than now when
Nigeria has entered a second recession within
Recession , Onyekpere said was coming at a
time of more than "quadruple whammy with
increased national indebtedness , reduced revenue inflow, double digital inflation, reduced
foreign reserves, rising unemployment and
youth restiveness as well as accelerated insecurity across the country.
The lead director who recalled that Nigeria
has been designated the poverty capital of the
world, said there was over N10 trillion in unrecovered and outstanding public monies compiled in federal audit reports. "There is therefore the need to block leakages in the system,
strengthen processes and systems through empirical adherence to rules, guarantee value for
money and make the best use of available resources. Onyekpere added.
Earlier, while presenting the Audit Assessment Index, Fidelis Onyejegbu, Programme
Officer and Public Finance Management, CSJ,
disclosed that the overall goal of assessing federal MDAs using the AAI was to promote rule
and evidence -based public finance management system across federal MDAs in the country.
According to him, through the assessment,
good performing MDAs will be encouraged to
continue in their tradition and even improve on
same while poorly performing MDAs will be
challenged to improve their performance.
"It is a benchmarking exercise where MDAs
share, peer review and learn from the successes
of the best in class. It is a reform tool that encourages a race to the heights rather than the
current race to the bottom. " Adding, that It
seeks to discourage and reverse perverse incentives by demonstrating that Nigerians recognize and appreciate good public finance management practices.
In his remarks, Charles Abana of the Fiscal
Responsibility Commission called for sanctions
against those MDAs found wanting, saying
for how long will we continue with such situation, something has to be done.
According to him, Just four years, 2014 - 2017,
we are talking about trillions of Naira unaccounted for, over spending and unauthorized
spending as well as all manner of things. Adding, that the government needs to step up the
issue of sanction.
The event tagged, "Presentation of the Audit Assessment Index was all about the project,
"Improving the effectiveness of Federal Audit
Process and Practice. It featured Goodwill
Messages, Presentation of the 'Audit Assessment Index' and Presentation of Awards to best
performing MDAs. Participants were drawn
from Ministries, Departments and Agencies in
Nigeria as well as friends and well wishers.