Published in Finance
Despite many criticising MDAs for fund mismanagement, the government remains aloof, ignoring recommendations from the Auditor-General.
September 23rd, 2020
Despite many criticising MDAs for fund mismanagement, the government remains aloof, ignoring recommendations from the Auditor-General.
The Federal Government (FG) is yet to implement recommendations from the 2017 report from the Auditor-General;
For years, the MDAs failed to surrender surplus revenues to the FG, contravening established financial laws and the Nigerian constitution;
FG is looking at how to raise funds through debt instruments, but billions of naira meant for the treasury are in private pockets;
Most of these recommendations, if implemented, could block financial loopholes, reckless spending, and misappropriation.
It is more than a year since Nigeria’s auditor-general submitted a daring report indicting Ministries, Departments, and Agencies (MDAs) of revenue mismanagement worth billions of naira.
The 2017 annual audit report submitted to the National Assembly by the Auditor-General of the Federation highlighted irregular expenditures, failure of MDAs to surrender surplus revenues to the federal government purse and contravening of established financial laws, and the constitution of the country.
Yet, despite critical questions and recommendations aimed at closing the nation’s revenue shortfalls, the Federal Government (FG) continues to turn deaf ears to them. Again, anti-graft agencies of the government are still yet to hold anyone accountable.
For instance, a section of the report raised questions on deficiencies and significant discrepancies in the accounting records of the MDAs, which contravenes the Finance (Control and Management) Act, Cap F26 LFN 2004.
Interestingly, these discrepancies date back to 2014, not just the 2017 audit report. To this effect, the Centre for Social Justice (CSJ) itemised some key issues in the federal audit reports from 2014 to 2017. And not only were the issues repetitive, non-action from the government seems to be constant across the years. Instead, lapses from erring agencies continued yearly.
Out of the 900 MDAs of the federal government, 265 agencies defaulted in the submission of audited accounts for 2017. In 2016, 160 agencies, defaulted, and 11 agencies have submitted no financial statements for audit since inception. Worse, though, is the fact that the Auditor-General cannot enforce compliance to defaulting agencies.
Concerning this, Mr Fidelis Onijejegbu suggested Nigeria get a new Audit Act that would empower the Auditor-General to implement some recommendations. The Programme Officer, Public Finance Management for Centre for Social Justice (CSJ) further questioned the government’s indecision in utilising the missing funds for several deficits in the country. In the same vein, he questioned the government’s hesitation in passing the Federal Audit Bill.
“Civil societies have a lot of roles to play in this. As a nation, we are borrowing to pay salaries, overhead. And the Auditor’s report has highlighted billions of money to be put into the treasury. Why can’t we run after them instead of borrowing?”
With that in mind, Dataphyte looked at some recommendations from the Auditor-General.
The 2017 report from the Auditor General recommended stringent sanctions on defaulting agencies. These penalties rendered to untimely accounts were provided by the constitution and financial regulations. Further, the office advised the Federal Government to withhold financial releases and sanction of the Chief Executive Officer of defaulting agencies and parastatals.
Similarly, provisions from the Financial Regulation 2019 demand that Chief Executive Officers of these agencies submit both the audited accounts and management reports to the Auditor General, not later than 31st May, of the following year of Accounts.
The Auditor frowned at the non-compliance with Accountant General directives. He noted that compliance with the instructions of the Accountant-General was very low. Consequently, the Office of the Auditor called for effective sanctions for non-compliance with treasury Instructions.
Non-remittance or under remittance reduces government revenue and undermines efforts to adequately fund annual budgets. In 2017 alone, the Auditor-General observed over ₦20.67 billion in various taxes (PAYE, WHT, VAT, etc) absent from the Consolidated Revenue Fund.
Thus, the Auditor-General recommended that FG should ensure the implementation of proper strategies to improve the oversight of revenue-generating agencies. It also clamoured for adequate sanctions against the heads of agencies failing to remit appropriately and promptly.
Regarding payment, the Auditor-General proposed that the Minister of Finance ensures all MDAs use only the Government Integrated Financial and Management Information System (GIFMIS) platform.
A Dataphyte report found that some Nigerian public health facilities still carry out activities without issuing receipts; even though patients pay as high as ₦37,000 (about $95).
According to the report, patients paid for services such as bed space, consultancy, HIV test, tuberculosis test, and file movement without receipts for such transactions. Findings by the Auditor-General showed that such infractions cost the country ₦26.6 billion (more than $60 million) in 2017. Also, loans and cash advances were awarded to staff to the tune of ₦4.1 billion without compliance with relevant rules and regulations.
To ensure accurate financial statements, the AG proposed the Accountant-General ensures it discloses all personnel cost budgets. This, however, is far from reach as MDAs and the Accountant-General ignore adequate statements of account and purposes.
In May 2020, Dataphyte noted over 1,000 transactions, all without description of payments. Even more, these transactions amounted to ₦173 Billion from January to April 2020.
In 2019, over nine thousand of such transactions, valued at ₦510.23 billion were ambiguous and lacked adequate description.
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Despite many criticising MDAs for fund mismanagement, the government remains aloof, ignoring recommendations from the Auditor-General.
