Auditor-General Indicts Presidency, EFCC, NASS – TheNigerialawyer

• Accuses agencies of violating accounting rules, failing to
submit fiscal reports
• MDAs without audited reports increased from 148 in 2014 to 323 in
2018
• Financial indiscipline blamed on Buhari’s inaction, failure to
sign anti-graft bills

Almost all Ministries, Departments and Agencies (MDAs) have been
indicted for financial wrongdoings in the latest fiscal assessment
of the country.

The indictment came against the backdrop of the
much-talked-about fight against corruption being waged by the
Federal Government.

Some of the cases of irregularity included improper records of
transactions, unsubstantiated claims and outright non-report. For
instance, an estimated N500 billion was submitted to the National
Assembly. But the money, according to the 2016 report by the Office
of the Auditor-General of the Federation, was not properly
accounted for.

The situation however might not be resolved any sooner because
of a lack of enabling laws that would compel and sanction erring
MDAs that ignore audit queries.

The Auditor-General of the Federation (AGF), Anthony Ayine,
lamented that the gross violation of statutory financial reporting
obligations by government agencies is worrisome.

“Most of the government corporations, companies and commissions
have not submitted their audited accounts for 2016 to me. Only 51
audited financial statements for 2016, and 149 for 2015, have been
submitted to my office as at December 27, 2017, despite the
provision of Financial Regulation 3210(v), which enjoins these
bodies to submit both audited accounts and management report to me
not later than May 31 of the following year of account.

“As at April 2018, 109 agencies have not submitted beyond 2013;
76 agencies last submitted for the 2010 financial year; while 65
agencies have never submitted any account since inception,” Ayine
said.

An analysis of the report showed that government agencies,
despite the anti-corruption campaign, have increasingly become more
reckless with public finance, with 323 agencies failing to submit
reports in 2016. In 2015 and 2014 however defaulters numbered 215
and 148.

Highlighting a breach of transparency and accounting standards,
the report further detailed unremitted deductions worth more than
N3.79 billion involving over 40 agencies including the presidency,
Economic and Financial Crimes Commission (EFCC), and the National
Assembly.

It noted that about N13.96 billion reported as salaries and
wages in the consolidated financial statement of the EFCC were not
in the anti-graft agency’s trial balance submitted for
reconciliation.

Besides, the EFCC was listed as one of the agencies with
“doubtful cash balance” of over N315 million. Others on the list
include the House of Representatives (N291.68 million) and Lagos
University Teaching Hospital (N343.7 million).

The State House, Office of the Chief of Staff to the President,
and EFCC led 62 other MDAs on the list of government offices with
outstanding personal advances estimated at N4.87 billion as at
December 31, 2016.

The audit inspection of accounting records at the Federal
Ministry of Health showed several overdue cash advances of N380.9
million outstanding as at October 2016. Some of these have been
outstanding since 2014, even as multiple others were granted
without retiring the previous ones, contrary to financial
regulations on granting and retirement of advances.

The magnitude of the amount involved suggests the absence of an
effective internal control in respect of advances.

At the Ministry of Trade and Investment, 13 payment vouchers of
N60.39 million were raised for payment of estacode and air tickets
for staff. All were, however, without supporting documents as
required by Financial Regulation 603.

President Muhammadu Buhari has consequently been accused of
encouraging fiscal indiscipline by refusing to assent to sensitive
bills on fiscal governance. He has also been blamed for showing a
lack of concern for the economy by keeping the national budget
perpetually “incapacitated” and subjecting it to a three-month
abuse by delaying the appointment of ministers.

The president who has repeatedly said he would return the budget
calendar to the January-December cycle rejected the Budget
Timeframe Bill and has not come up with a working alternative.
Also, since January 2019, a duly passed Federal Audit Reform Bill
sent to him for assent has not been signed. There has not been any
communication from the presidency about its rejection.

The bills however have lapsed. Since the Eighth Assembly which
drafted them has ended, they would require fresh legislative
exercise, lasting years perhaps, and additional millions of naira
in cost.

The fiscal anomaly meanwhile appears set to continue.

In his reaction, Taiwo Oyedele, Partner/Head of Tax and
Corporate Advisory Services at PwC Nigeria, stressed the need for
fiscal transparency in the country. He cited a national survey by
the Nigerian Economic Summit Group, which showed that about two in
every three adults do not trust government with their taxes, hence
about 83 per cent of individuals and nearly 70 per cent of
businesses do not consider tax evasion as wrong.

“With such a high level of apathy towards tax, it is impossible
to move the needle on revenue generation. Government at all levels
must urgently start taking steps to address fiscal transparency
issues to build the much-needed trust in the system.

“Based on the audit report by the AGF, it was revealed that the
National Assembly, the presidency and some agencies such as the
EFCC defaulted in remitting various taxes, including the Pay As You
Earn of their staff and Value Added Tax (VAT) on payments to their
vendors,” Oyedele said.

He noted further: “This trend unfortunately sends the wrong
signal from the top and further dampens citizens’ tax morale. The
vast majority of citizens and Nigerian businesses are unwilling to
voluntarily comply with their tax obligations mainly because of
lack of transparency and non-commensurate social services.

“This is a key factor responsible for Nigeria’s low tax to Gross
Domestic Product (GDP) ratio. Addressing the problem could easily
raise the country’s tax revenue by over 100 per cent, from the
current six per cent to at least 12 per cent of GDP.”

The Lead Director of the Centre for Social Justice (CSJ), Eze
Onyekpere, on his part, faulted the president’s rejection of the
Budget Timeframe Bill.

He said: “It was clearly evident that the president was misled
and misadvised by his legal and fiscal governance team. In one
breath, he kept repeating the desire of his administration to
return the budget calendar to normalcy but when the opportunity
presented itself on a platter of gold, to walk the talk, he
declined.

“The bill was not an executive bill and he offered no old or new
ideas on how the bill could be remedied, to return to the
January-December calendar,” he said.

Onyekpere noted that the Federal Audit Service Commission Bill
or the Audit Reform Bill received a much colder treatment.
According to him, “The president neither formally declined assent
nor gave assent to this bill. It is customary when the president
declines assent to send a letter to the National Assembly,
indicating his reasons for declining assent. He just acted as if
the bill was not forwarded to him.

“It shows a clear lack of understanding of what is needed for
fiscal governance, transparency and anti-corruption reforms. It
could also be interpreted as a lack of political will on the part
of the administration to implement reforms. The implication is that
the government does not believe in most of what it says. It
believes more in the propaganda of reforms, rather than actually
implementing real reforms.

“There is evidence of lack of capacity and political will on the
part of this administration to timely and properly account for
resource expenditure. Budget Implementation Reports (BIRs) no
longer come on time and no longer reflect what actually
happened.

“Fiscal stability is part of fiscal responsibility and
transparent reporting is a key cornerstone of the two. Therefore
Nigeria cannot be said to be fiscally stable in an environment of
uncertainty and failure to report timelines, coupled with the
administration’s impunity mindset that believes it owes the
citizens no reporting obligation.”

The audit bill was expected to reveal and plug channels of
corruption, compel and sanction MDAs that ignore audit queries,
monitor compliance of MDAs, and make the office of the AGF
independent.

Dr. Titilayo Eni-tan Fowokan said such low-level fiscal
compliance by government offices is obtainable when enforcement is
applied on corporate taxpayers and citizens without commensurate
pressure and oversight on government agencies.

According to the Fellow of the Chartered Institute of Taxation
of Nigeria, “When a country is transparent in reporting its
resource utilisation and demonstrates accountability to the
citizens, voluntary tax compliance is encouraged and the level of
tax compliance vis-a-vis tax revenue generation increases.”

Also, a development consultant, Jide Ojo, told The Guardian it
is disheartening that the president rejected bills that would have
ensured good governance after resources had been expended on their
passage.

“Now that the government has signed on to Open Government
Partnership, it needs to show better transparency and
accountability in governance. This will help in the crusade against
corruption and financial instability,” Ojo said.

In his own submission, Executive Director of Media Rights Agenda
Edetaen Ojo said: “The fact is that our current audit system is
quite archaic and in dire need of modernisation. So, it is very
important that a system that has passed through a participatory and
consultative process of a variety of stakeholders and also responds
to the key concerns of independence and reliability is put in
place.”

According to him, while President Buhari is not an expert on
issues of fiscal governance, the quality of assistance he is
getting from his advisers and other relevant officials is
disturbing.

“As a president who has put anti-corruption as his biggest
preoccupation, this is an issue that has a huge impact on public
sector corruption and should therefore be a priority for him, if he
intends to be effective in his war against corruption.

“It seems to me that the anti-corruption war is deliberately
backward-looking, as it tends to target government officials in the
last administration with good reason, but is extremely reluctant to
institute legal measures to stem or prevent future acts of
corruption, and even more reluctant to go after members of the
administration who have also been accused of acts of
corruption.

“If that is the entire strategy, it is flawed and bound to fail
because such an approach would only serve to politicise the
anti-corruption war and thereby undermine its effectiveness.”

Culled from guardian