Timeliness Of Audit Reports

The Constitution of the Federal Republic of Nigeria 1999 in s.85 (5) mandates the Auditor-General of the Federation within ninety days of receiving the Accountant-General’s financial statements to submit his audit report to the legislature. However, the Constitution did not set a time limit within which the Accountant-General is to submit the financial statement to the Auditor-General. Also, the Finance (Control and Management) Act in s.24 merely mandates the Accountant-General to sign and present to the Auditor-General accounts showing fully the financial position of the government on the last day of each financial year. The Act failed to assign a time line for the performance of this act.

By s.13 (1) of the repealed Audit Act of 1956, within the period of seven months after the close of each financial year, the Accountant-General shall sign and present to the Director of Federal Audit accounts showing fully the financial position of the Federation of Nigeria on the last day of such financial year. Assuming that the Audit Act is still extant law, its provision is not good enough since the Auditor-General may receive the financial statements by the end of July and he would not be bound to turn in his report until the end of October.

Literature and practice evidence point in the direction of even further delays over and above the hitherto allowed seven months in the submission of financial statements to the Auditor-General. The Accountant-General’s delays in turning in the financial statements stem from the fact that Ministries, Departments and Agencies (MDAs) fail, neglect or refuse to timely submit their statements to his office. Apparently, there is no effective sanction mechanism to compel MDAs to submit timely statements to the Accountant-General.

The above scenario has led to a situation where the auditing of public accounts has fallen into arrears by several years. In many instances, a good number of public officers who were involved in the transactions of that period have either retired, left service and in some instances have died. Since the commencement of the work of the Auditor-General is contingent on the submission of the Accountant-General’s financial statements, a time limit for the Accountant-General to submit the statement has become imperative. And a three months time limit after the end of the financial year is recommended. For MDAs to turn in their reports to the Accountant-General, a deadline of eight weeks after the end of the financial year is recommended. Stiff sanctions should be provided for accounting officers who fail to timely submit their financial statements. A strict revival of the practice of MDAs providing monthly financial statements to the Accountant-General’s office will facilitate the preparation of the annual statement at the close of the year.

Considering the provisions of s. 49 (1) of the Fiscal Responsibility Act 2007 which mandates the Federal Government to publish its audited accounts not later than six months following the end of the financial year, the three months recommendation makes eminent sense. The implementation of other sections of the Fiscal Responsibility Act will facilitate timeliness in preparing financial statements. These include the Annual Cash Plan by the Accountant General (s.25) and the Disbursement Schedule by the Minister of Finance (s.26), quarterly budget monitoring and reporting by the Budget Office of the Federation (s.30).

For a legislature considering reports of an era when the constitution empowering it to investigate expenditure of public funds had not been enacted, it is doubtful whether it has the power to conduct such inquiry because laws take effect from the date of their enactment and not retroactively. Timeliness in correcting flaws, detection of corruption and waste, and letting the law take its due course where a crime has been committed is very important considering the legal maxim that justice delayed is justice denied.

The legislature and its Public Accounts Committee have no constitutional or statutory timeframe to conclude deliberations on the Auditor-General’s report. The same arguments in support of a time frame for the Accountant-General and Auditor- General are also applicable to the legislature and it’s PAC. The legislature should finish its works and make its findings public within three months of receiving the report. Finally, the Auditor-General’s report to the legislature does not have to wait until the end of the year; statutory provisions can be made for quarterly or special reporting. The idea in quarterly reporting is to enable the legislature have a feedback on a more regular basis of the use of public resources. In special reporting, the Auditor-General reports any major case of misuse of public resources that has come to the knowledge of his office so that immediate steps can be taken by the legislature to control waste and mismanagement of resources.