Edo State Splits Audit Report into two parts, with one not available for public viewing

By Usman Aliyu

The 2020 and 2021 Audit Reports of the Edo State government do not comply with standards; still, an official of the Office of the Auditor General says the missing components are in sections unavailable for public viewing on the website.

They show the commentary and qualification on the report to government officials and only those whose requests they decide to honour.

The Auditor General must express an independent opinion on the financial statements of the Accountant-General of the federation or a state based on his Audit and in compliance with Section 125, subsection2 of the 1999 Nigerian constitution.

The provision in Section 125-127 spells out the responsibilities of the Auditor General, which 125 (2) states: The public accounts of a State and all offices and courts of the State shall be audited by the Auditor-General for the State who shall submit his reports to the House of Assembly of the State concerned, 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 documents relating to those accounts.

(3) – Nothing in subsection (2) of this section shall be construed as authorising the Auditor-General to audit the accounts of or appoint auditors for government statutory corporations, commissions, authorities, and agencies, including all persons and bodies established by Law by the Auditor-General shall –

(a) provide such bodies with –
(i) a list of auditors qualified to be appointed by them as external auditors and from which the bodies shall appoint their external auditors, and
(ii) a guideline on the level of fees to be paid to external auditors; and
(b) comment on their annual accounts and auditor’s report thereon.

The state governor appoints the A-G subject to the recommendation of the House of Assembly. The Assembly, in turn, acts on the advice of the State Civil Service Commission.

The A-G is primarily empowered to audit the public accounts within 90 days of receiving the financial statement and annual accounts from the Accountant-General. He submits his report afterwards to the House of Assembly for the consideration of the Public Accounts Committee.

A thorough study of the 2020 and 2021 audit reports of Edo State shows that the auditor-general failed to make any recommendations or qualify his account.

Edo State gets plaudits for the timely submission of its information, even as the report avoids what the auditor general ought to state.

For instance, audits for Delta State and Enugu State for 2020 and 2021 contained detailed narratives, identification, and explanation of infractions by different Ministries, Departments and Agencies and queries of erring MDAS, that of Edo State included only the rundown of tables and figures.

Experts bemoaned the format for contravening international best practices.

Experts argue that a comprehensive report for public understanding must come in a style and format that a non-specialist would understand, such as Delta and Enugu’s case.

The experts averred that this action of the Edo State’s Auditor-General negates the principles of accountability and transparency, which the Nigerian constitution seeks to promote.

An accountant and financial analyst in Benin, Mr B. Omenogor, spoke on the audit report requirements at at an Audit Reporting workshop in October 2022 in Benin.

“Public sector auditing can be described as a systematic process of objectively obtaining and evaluating records intended to show the financial condition and result of an operation to provide a basis for an opinion concerning the records’ reliability and authenticity, ” Omenogor stated.

The experienced auditor told journalists at the Audit Reporting Workshop organised by Front Foot Media Initiative under the aegis of the Wole Soyinka Centre for Investigative Journalism, that “Public sector auditing helps to create suitable conditions and reinforce the expectation that public sector entities and public servants will perform their functions effectively, efficiently, ethically and in accordance with the applicable laws and regulations”.

Experts say the audit report typically contains the auditor’s opinions categorised as qualified or unqualified.

An unqualified opinion is “when the auditor determines that the financial records are free of misrepresentations”.

Moreover, “The Auditor gives a qualified opinion in case the financial records are not maintained per GAAP, but the auditors do not find any misrepresentation in the financial reports.

A qualified opinion is also given when adequate disclosures are not made to the financial statements.”

The Edo State House of Assembly has not deliberated on the state audit reports for 2020 and 2021 to draw the attention of stakeholders to the perceived lapses and as the Law requires them to do.

Instructions 108 and 109 of the Edo State Financial Instruction (2017) require the Auditor General to audit the books, accounts and records of State Ministries, Departments, Agencies and other arms of government as well as audit the Accountant General’s financial statement.

Section 27 of the Edo State Audit (Repeal) Law 2021 also requires the Auditor-General (in addition to power conferred by Section 125 of the constitution) to ensure that the concerned persons took reasonable precautions to safeguard the collection of public monies and that all funds appropriated or otherwise disbursed have been expended on and applied for the purpose for which the grants made by the Executive Council of the State and the State House of Assembly were intended, and that the expenditure conforms to the authority which governs it.

Such monies should be spent efficiently and effectively with regard to the economy. The state law contextualises Audit to involve the examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements prepared by the Accountant-General.

Audit accordingly includes an assessment of the significant estimates and judgments made in preparing the Financial Statements and whether the accounting policies are appropriate to Government circumstances, consistently applied and adequately disclosed.

When this correspondent drew the attention of the state Auditor-General to the observable lapses, Mr Wilson Anelu, Director, Final Account in the Office, said there was always a separate domestic report which discussed noticed issues in the government’s account.

He stated, “There is what we call Citizens Accountability Report every July, where relevant Civil Society Organisations (CSOs) and stakeholders would converge and discuss this issue. Then, we write to the MDAs concerned to do what needs to be done.

“There is a separate executive summary too, which is not uploaded on the website; it provides the details of our opinion and evaluation. What you download from the website is just the financial statement analysis, whether or not it conforms with the standards”.

The Director of Final Accounts in the Office of Edo State Auditor General added, “but if you need the executive summary, I can discuss it with my boss and see if you can get it”.

When asked if the executive summary could be incorporated into the report released online, he said the style would have to continue for now.