A legislative solution to the continued claim by Samuel Ukura, the auditor-general for the Federation (AGF), that the Constitution of the Federal Republic of Nigeria forbids his office from carrying out forensic audit of statutory public corporations or commissions, including the Nigerian National Petroleum Corporation (NNPC), will be a major step towards curbing corruption in government circles, BD SUNDAY investigations reveal.
The AGF had said at different fora, including the Senate Committee on Finance while investigating the alleged unremitted funds by the NNPC into the Federation Account, that the constitution does not empower him to audit certain accounts.
Ahmed Makarfi, the Committee’s chairman had asked whether his (Ukura) office planned to carry out a forensic audit on the NNPC accounts as suggested then by Ngozi Okonjo-Iweala, minister of Finance.
In what appears to be direct powers given to the AGF to audit on one hand, Section 85(2) of the 1999 constitution, provides that the “Public accounts of the Federation and of all Offices and Courts of the federation shall be audited and reported on by the Auditor-General who shall submit his report to the National Assembly; and for that purpose, the Auditor-General or any person authorised by him in that behalf shall have access to all the books, records, returns and other document relating to those accounts.”
On the other hand, however, such powers appear to have been indirectly taken away from the AGF. Section 85 (3) straight away insists: “Nothing in sub-section (2) shall be construed as authorising the Auditor-General to audit the accounts of or appoint auditors for government statutory corporations, commissions, authorities, agencies, including persons and bodies established by an Act of the National Assembly”; with 3 (a) mandating the AGF to provide such bodies with a list of auditors qualified by them to be appointed as external auditors and from which the bodies shall appoint their external auditors. Analysts believe that the limitations may have rendered the AGF “a toothless bulldog”.
Section 85(4) then goes on to stipulate that the AGF shall have power to conduct periodic checks on all Government statutory corporations, commissions, authorities, agencies, including all persons and bodies established by an Act of the National Assembly; while section 85(6), in what appears to be providing independence to the AGF, states: “In the exercise of his function under the Constitution, the Auditor-General shall not be subject to the director or control of any other authority or person”.
Section 85(5) then again compels the AGF to “within 90 days of receipt of the Accountant-General’s financial statement; submit his Report to each House of the National Assembly (The Senate and the House of Representatives) and each House shall cause the Report to be considered by a Committee of the House of the National Assembly responsible for public accounts.”
Robert Ekule, a Lagos-based legal practitioner, said by taking powers to audit corporations like the NNPC from the AGF, and giving ministers and heads of agencies powers to self-appoint auditors to investigate their own ministries and agencies, renders section 85 of the 1999 constitution as one of the greatest fraud in the constitution.
“It is a pity that section 85 of the 1999 constitution was not considered for amendment during the last review exercise. The section is deliberately so; created to shield corrupt leaders because they all know where to steal from. The lack of transparency we see in government sphere today is aided by the section. If the Financial Reporting Council of Nigeria investigates public institutions all hell will lose because the Council is not empowered by law to do so. As it stands now, there is no agency clearly given the mandate to audit and publish findings of corporations like the NNPC. It should be the office of the AGF to detect missing money if empowered; not the CBN governor. I find it hard to believe that Nigeria is one of the very few countries in the world without a functioning Auditing Act. Unfortunately, Nigerians are not asking political parties, leaders and candidates contesting under them the right questions. At the moment, campaign is devoid of these kind of issues you are raising,” he told BD SUNDAY.
Urgent passage of the Audit Act
The AGF had also lamented the non-existence of Auditing Act in the country, noting that even the 1956 colonial provision was removed in Nigeria’s body of laws since 2004, observing that Nigeria is the only country in the world without a functional Auditing Act, an inadequacy, according to him, which has robbed it of the opportunity of auditing international accounts, including that of ECOWAS headquartered in Abuja.
Ukura, who lamented that Ghana audited the United Nations’ account for 30 years, and then passed the baton to South Africa, said Nigeria has been severally denied because the UN is uncomfortable with Nigeria’s lack of auditing law.
Aminu Waziri Tambuwal, speaker, Nigeria’s House of Representatives, had also regretted that the extant Audit Act, which was bequeathed to Nigeria by the colonial masters, does not give the Office of the AGF the required instrument to fight corruption nor allows it to streamline the practice as is done in other countries. He assured then that the new Audit Act before the National Assembly, when it eventually becomes a law, will help create Audit Service Commission, which will in turn allow the AGF the latitude to restructure auditing practice in the country, thereby, subjecting it to modern trends in digital auditing.
Although with limited powers, the AGF is by law expected at the end of each financial year to receive Financial Statements from the Accountant-General showing fully the financial position of the Government.
This in 2012 caused the AGF to query the Office of the Accountant-General (OAGF) of the Federation over loopholes identified in the Federal Government’s financial account for that year even as he complained of delayed response by the OAGF to enable him form an opinion on the said account.
He explained at the time that his office had targeted to vet and comment on 250 agencies of the Federal Government, but had only achieved 31.20 percent of that target as they could do only 78 of these agencies due to non-submission of audited financial statements by some of the parastatals and also lack of funds.
In 2014, an online media platform reported that a 169-page report from office of the AGF indicted a former Head of the Civil Service of the Federation, HCSF, Stephen Oronsaye, over an alleged N123billion fraud allegedly perpetrated during his tenure, generating heated controversy in the public space.
The online medium had claimed that an audit by the AGF which arose from the work of a “Special Audit Team” constituted by the FG in May 2011 to conduct a comprehensive examination of the accounts of the Civilian Pension Department domiciled in the Office of the HCSF, and that the audit, which covered the period 2005 to 2010, uncovered monumental financial irregularities, opaque transactions, irregular and abnormal running costs.
But, in a quick reaction, on September 19, 2014 precisely, the office of the AGF issued a disclaimer of the media reports in some national dailies, stating that no report ever indicted Oronsaye in a N123 billion fraud.
While the Nigerian AGF depends heavily on government funding to sustain its existence with over N5 billion allocated to it in the 2014 budget, the South African AG’s office is a self-funding organisation that bills its auditees-government institutions based on time worked at public tariffs.
Unlike its Nigerian counterpart, the Auditor-General of South Africa (AGSA), which is governed by Public Audit Act, annually produces audit reports on all government departments, public entities, municipalities and public institutions; and does its job in a manner that enables the legislature call the executive (cabinet ministers) to account for how they spent taxpayers’ money.
Dissimilarly to that of Nigeria, Chapter 9 of the Constitution of the Republic of South Africa guarantees the independence of the AGSA, giving the office absolute powers, stating that the AGSA must be impartial and must exercise its powers and perform its functions without fear, favour or prejudice.
FRCN, in an attempt to fill a lacuna, crossed its borders
The Financial Reporting Council of Nigeria (FRCN) is responsible for, among other things, developing and publishing accounting and financial reporting standards to be observed in the preparation of financial statements of public entities in Nigeria; and for related matters, according to its Act No. 6, 2011.
The Senate passed the FRCN Bill on May 18, 2011 and signed it into law on July 20, 2011. It repealed the Nigerian Accounting Standards Board Act and replaced it with a new set of rules which mandates it to promote the highest standards among auditors and other professionals engaged in the financial reporting process.
The council is not statutorily empowered to investigate financial waste in any public organisation and thus its action was seen as illegal, null and unconstitutional during the tussle between it and Lamido Sanusi Lamido, former governor of the Central Bank of Nigeria (CBN), when the FRCN accused the now Emir of Kano of financial recklessness, summoning him to appear before its committee.
Sacked for job well done: the brilliance of Vincent Azie’s 2003 audit report
BD SUNDAY investigation also revealed that the forensic audit report which was anchored by Vincent Azie, then in acting capacity as AGF under former President Olusegun Obasanjo, was the first and last real auditing process ever carried out in Nigeria’s public service space.
Trouble was said to have started for Azie in February 2003 when he perceived that the Nigerian public may never get to read the damning conclusion in the content of his audit report and dared a government whose head was a retired military General by releasing the full findings to the press.
Azie was consequently sacked by the former president, with many Nigerians believing that the decision to sack, rather than retain a man described as the ‘best’ in the history of the AGF was predicated on the derogatory 2001 audit report which incriminated the three arms of government.
The Azie’s reports revealed how billions of naira was collected for phoney purchases, unexecuted contracts and for the supply of what in most cases were simply listed as “various items”.
The brilliance of a strong auditing system was seen in the detailing prowess of the Azie’s reports; making precise references to time, location and occurrences in several instances where irregularities were found.
Instances of such detailing could be seen on the audit of the Nigeria Police Force. At the Nigerian Police Force Area ‘E’ Headquarters in Festac Town, Lagos, one Light Automatic Rifle with number 1694953 was snatched by armed robbers on March 2000. At Isolo Police Station, one Baretta pistol number A063282 was reportedly snatched by armed robbers on April 6, 2001. At Mushin police station, one K.2 Rifle number 061553 with seven rounds of ammunition and one FCN Rifle number 052868 with five rounds of ammunition were snatched by armed robbers on November 25, 2000. At the same station, two K-2 Rifle numbers 61679 and 301067 with 20 and 16 rounds of ammunition each and one Lar Rifle number 1697239 were snatched by armed robbers on September 3, 2001.
At the Nigerian Police Alakuko, Agege, one K-2 Rifle number 302079 with 10 rounds of ammunition, two FNC Rifles numbers 97-045156 and 97-046146 with 20 rounds of ammunitions and one Lar Rifle number 1668406 with 16 rounds of ammunition were lost to armed robbers on November 21, 2000.
At the Makinde police station, Oshodi, one Chief Revolver pistol number 9D42759 issued to an officer on April 8, 2000 and one Wembley Revolver pistol number B.2811 issued to another officer on October 11, 2000 could not be produced for audit verification.
But, Nelson Ekujumi, executive director, Centre for Rights and Grassroots Initiative (CRGI), said by auditing the accounts of the three arms of government in violation of the provisions of the constitution, Vincent Azie committed illegality, hence, the sacked letter he got from Obasanjo was justified.
According to him, the way out of the current constitutional crisis regarding the office of the AGF, was for the constitution to be amended to empower the AGF to audit accounts of public institutions within a given period and external auditors to do same in order to corroborate or expose lapses if there are any.
He further explained that the provisions of section 85 of the constitution was inconsistent with logic and letters of law in the sense that it probates and reprobates at the same time because it confers the power to audit the accounts of public institutions on the AGF and within the same breath of the same section, it takes away the powers, lamenting that the controversial section was with all intents and purposes, a contradiction and illogical.
“Despite the contradictions, Section 85 of the Constitution empowers the AGF to recommend a list of external auditors to do the job from which the government institution shall make a choice, but this is not good enough.
“It is my belief that the office of the AGF is presently underfunded and its constitutional responsibility hamstrung by the contradictions in the constitution, hence, it is powerless and only exist to recommend a list of external auditors in which the office has no control or power to determine or verify the professionalism of the work of external auditors carried out in the public institution that appointed the external auditor,” Ekujumi told BD SUNDAY.
NATHANIEL AKHIGBE & MABEL DIMMA
