PRESIDENTIAL ASSENT FOR THE FEDERAL AUDIT SERVICE BILL: STREGTHENING PUBLIC FINANCE MANAGEMENT AND THE ANTI-CORRUPTION REGIME
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May 18, 2026
- Posted by: Center for Social Justice
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1. INTRODUCTION: NEED FOR AN AUDIT ACT
We, the undersigned civil society organisations, welcome the National Assembly’s approval and passage of the Federal Audit Service Bill being a Bill for an Act to Repeal the Audit Ordinance of 1956, and Enact the Federal Audit Service Bill, 2023 to Establish the Federal Audit Service, Provide Additional Powers and Functions of the Auditor-General for the Federation, Establish the Federal Audit Board; and for Related Matters.
The bill has been forwarded to the President for his assent but the assent has been delayed. While the Bill speaks to the repeal of the Federal Audit Ordinance of 1956, it is imperative to note that the Audit Ordinance (Act) of 1956 was not reproduced in the Laws of the Federation of Nigeria 1990 and by S.5 (1) of the Revised Edition (Laws of the Federation of Nigeria) Decree 1990, the Act ceased to be part of Nigerian laws. The Act is not reproduced in the Laws of the Federation of Nigeria 2004. However, no new audit law has been enacted at the federal level since then and audit reports at the federal level have consistently referred to the 1956 Audit Act. As such, there is a lacuna in that area of the law. Assuming without conceding that the Audit Act of 1956 is still extant law, it is outdated, obsolete and needs to be replaced.
The Constitution of the Federal Republic of Nigeria 1999 (“Constitution”) in S.85 (1) and (2) establishes the office of the Auditor General for the Federation (AuGF) with powers to audit the public accounts of all offices and courts of the Federation. Constitutional provisions on the auditing of public accounts are limited to appointment, independence, tenure, remuneration, submission of audit report to the Public Accounts Committees (“PACs”) of the National Assembly and powers in relation to the audit of government statutory corporations, agencies and commissions. The Constitution did not go into the definition of processes and procedures, coverage, ambit and other details of the audit function. These need to be fleshed out by a subsequent legislation.
The Bill seeks to strengthen the last mile of public finance management and the anti-corruption agenda of the Federal Government of Nigeria (FGN). Key reforms have been introduced in the establishment of Federal Audit Service, the Federal Audit Board, appointment procedure and qualification for the AuGF and redefinition of tenure. The functions and powers of the AuGF have been clearly expanded while timelines have been introduced for the performance of statutory functions across board, holding the AuGF accountable, sanctions and penalties for audit infractions, etc.
While the Bill is not perfect, it seeks to position Nigeria’s federal audit system to respond to the demands of the Lima Declaration of Guidelines on Auditing Precepts (adopted at the IX Congress of the International Organisation of Supreme Audit Institutions-INTOSAI) which states that the concept and establishment of audit is inherent in public financial administration as the management of public funds represents a trust. Audit is not an end in itself but an indispensable part of a regulatory system whose aim is to reveal deviations from accepted standards and violations of the principles of legality, efficiency, effectiveness and economy of financial management early enough to make it possible to take corrective action in individual cases, to make those accountable to accept responsibility, to obtain compensation, or to take steps to prevent – or at least render more difficult such breaches.
2. REVIEW OF THE MAJOR REFORMS INTRODUCED BY THE BILL AWAITING PRESIDENTIAL ASSENT
2.1 Establishment of Federal Audit Service and Federal Audit Board
An autonomous Federal Audit Service has been created being a corporate body with perpetual succession and a common seal. Federal Audit Board strengthens the independence and autonomy of the AuGF, especially on recruitment, promotion and discipline of staff, conditions of service and remuneration of the Service.
2.2 Appointment Procedure and Qualifications of AuGF
The Bill provides for a competitive and transparent appointment procedure and for the first time, spells out the qualifications of candidates for appointment to the office of AuGF. This was not available under extant law.
2.3 Supplements the Removal Procedure with Mandatory Fair Hearing Provisions
Fair hearing is now explicitly entrenched as part of the procedure for removal of the AuGF – service of notice of intention to remove with the reasons underlying the removal and fourteen days timeframe to prepare and make a defence either in person or by legal representative.
2.4 Expanded Functions of the AuGF
Now defined in the Bill and not reliant on subsidiary legislation like Financial Regulations and expanded to explicitly include beyond financial audit vis, value for money and performance audit, forensic audit; audit of special funds, classified expenditure, donations, grants and loans, all revenues accruing to FGN, disaster grants and aids, subsidies, performance information, counterpart funded projects, public private partnerships of FGN; special audits, etc. This broad mandate is supported by Principle 3 of the Mexico Declaration vis; A sufficiently broad mandate and full discretion, in the discharge of Supreme Audit Institution (SAI) functions.
2.5 Expanded Powers of the AuGF
Beyond the traditional powers, the decision on the methodology to adopt in respect of an audit and the nature and extent of audit are part of the independence of the AuGF. The following new power have been granted to AuGF:
- Unrestricted access to information.
- To summon and take evidence on oath and resort to courts to compel appearance
- Investigative powers where sufficient prima facie evidence exist to warrant investigation.
- Surcharge the amount of any expenditure which has not been duly brought into the account or the amount of any loss or deficiency incurred and to revoke any surcharge imposed by the Auditor-General.
- Direct the withholding of the emoluments and allowances of any person who fails or refuses to reply to audit queries within 30 days and for as long as the person fails to comply.
- Unrestricted access to persons, books, documents, property, etc., necessary for the discharge of statutory responsibilities.
- Examine accounts and records of individual or corporate bodies where public funds have been traced or suspected to have benefited from illegal transfer of public funds.
2.6 Specific Powers for Collaboration
This power to liaise with a Federal Government office or court on such conditions as the Auditor-General deems fit, for the proper performance of functions of the office opens the door for collaboration with other MDAs especially, other anti-corruption agencies for enhancing the fight against corruption. These agencies include the Police, Bureau of Public Procurement, Independent Corrupt Practices and Other Related Offences Commission, Economic and Financial Crimes Commission, etc. When this power of collaboration is combined with the power to report and investigate fraud, this will improve effectiveness and efficiency of audit operations. Court orders, either ex-parte or on notice could be obtained to enhance audit operations.
2.7 Improvement of Terms and Conditions of Service of Staff of the Service
The terms and conditions of service, remunerations, benefits and allowances of staff of the Service is now to be determined after considering:
- The need to attract and retain quality manpower for the Service;
- Specialised nature of work to be performed by the Service; and
- Salaries paid in similar government agencies to persons with equivalent responsibilities, expertise and skills.
2.8 Submission of Internal Audit Reports to AuGF
To be submitted monthly, quarterly and half yearly by Internal Auditors of FGN offices and courts. This will facilitate the work of the AuGF.
2.9 Express Declaration of Audit Reports as Public Documents
To be uploaded on the website of the Service after submission to NASS. This will facilitate public access to audit documents and aid the work of the media and civil society.
2.10 Mandatory Exit Conference
The Bill now provides for a mandatory exit conference between the AuGF and the leadership of the Auditee. A clean copy of the audit report to be provided to the Auditee. This facilitates transparency of the audit process and provides the opportunity for the Auditee to further respond to the issues raised in the audit.
2.11 Specific Issues to be Addressed in Audit of MDA Accounts
The Bill has explicitly articulated issues to be addressed in an audit, especially as it relates to FGN Corporations to wit;
- The profitability, liquidity, stability and solvency of any FGN Corporation on the capital markets, where applicable;
- Whether there was any delay in payment of the government’s portion of declared dividend into the Consolidated Revenue Fund or the Federation Account;
- Any significant case of fraud or losses and if so, their underlying causes and persons responsible for such fraud or losses;
- Any internal control weakness identified and the general corporate performance indicating-
(i) achievements against set targets and objectives, and
(ii) whether the finances of the Federal Government office or court have been conducted economically, efficiently and effectively.
2.12 Timeliness of Reports and Responses
- Accounting officers of MDAs and Corporations to submit financial reports and audited financial statements respectively, within 90 days after the end of the financial year to the AuGF and Accountant General of the Federation.
- Accountant General to submit financial statements of FGN not later than the 30th of June of the following financial year to AuGF. Recall that the work of the AuGF is constitutionally contingent on the submission of the Accountant General’s financial statement.
- NASS now have 120-150 days to publish the report of their consideration of the AuGF’s report.
- 15 days for responses for submissions or comments on draft performance audit reports.
- 30 days for responses to submissions or comments on any other audit report.
These timelines are missing in the extant audit regime and their absence led to situations of very late audit reports, lack of accountability for audit infractions.
2.13 New Financial Provisions
- A Fund is created to receive all finances due to the Service and from which all payments are to be made.
- The Service shall prepare and submit to the National Assembly, six months to the end of every financial year, the estimates of revenue and expenditure of the Service for the following financial year. This facilitates independence and autonomy of the AuGF in terms of access to resources for the performance of his duties.
This provision anchors one of the key building blocks of the independence of the AuGF which is financial independence.
2.14 Who audits the AuGF?
This has been a long-standing unanswered question which the bill has responded to through the provision for Independent Auditor. The Independent Auditor is to have access to all the books, properties, documents, etc., he needs to carry out the independent audit. The report of the Independent Auditor is to be submitted to NASS. The Bill establishes a three months timeline after the end of the financial year for the Service to submit its books to the Independent Auditor.
2.15 Creation of Offences and Penalties
Law as the command of the sovereign backed by sanctions has no meaning in a regime where infractions are not followed up with penal sanctions. Law as an instrument of deterrence and punishment for offenders has been strengthened through creation of offences and spelling out of sanctions in accordance with the requirements of the fair hearing provisions of the Fundamental Rights Chapter of the Constitution of the Federal Republic of Nigeria 1999 as amended. This has been a big gap under the extant audit regime.
Existing sanctions are mainly administrative and were encumbered through long bureaucratic processes. These provisions facilitate that link between infractions and legal sanctions. The current auditing function appears to be a frustrating exercise in report writing. The AuGF produces a report which is sent to the Public Accounts Committees (PACs) of the legislature. The PACs conduct their hearings, conduct investigations if necessary, conclude their deliberations and produce yet another report. What happens to the recommendations in the first and second reports? Available evidence shows that audit recommendations are treated with levity by MDAs. Despite the provisions of the Financial Regulations, there is hardly a follow-up on the recommendations. This sets the stage for the year after year reoccurrence of the same set of financial felonies and misdemeanours by MDAs.
3. PRESIDENTIAL ASSENT TO AUDIT BILL: STRATEGIC BENEFITS TO NIGERIA
When assented to, the new Audit Law will provide complimentary support to
3.1 Economic Benefits
- Reduce revenue leakages through stronger audit enforcement
- Improve efficiency in public spending (value-for-money audits)
- Enhance investor confidence due to transparent fiscal systems
- Better management of public debt, subsidies, and donor funds
3.2 Governance and Accountability Benefits
- Strengthen anti-corruption architecture
- Improve compliance across MDAs
- Promote data-driven decision-making in government
- Enhance citizen trust through public access to audit reports
3.3 Institutional and Systemic Impact
- Fill a gap, a lacuna because the 70-year-old 1956 Ordinance is no longer a part of Nigeria’s Laws.
- Align Nigeria with global public financial management standards
- Create a credible deterrence system against fiscal misconduct
- Enable real-time detection and correction of inefficiencies
4. RISKS OF REFUSAL TO GRANT ASSENT
Failure to assent to the Bill will:
- The gap and lacuna (beyond the few provisions of the 1999 Constitution) of no law guiding audit continues to exist
- Continued weak enforcement of audit findings
- Undermines anti-corruption efforts and fiscal discipline
- Limit Nigeria’s ability to meet international accountability standards
5. RECOMMENDATIONS
We respectfully urge the signing of the Federal Audit Service Bill into law and to direct the following immediately upon assent:
- Constitute the Federal Audit Board within 90 days and publish a clear timeline for the appointment of the Director-General of the Federal Audit Service;
- Direct the Attorney-General to publish a plain-language summary of the Bill’s key provisions for public communication; transparency on what the law does to diffuse misinformation and build public confidence;
- Communicate assent to the IMF, World Bank, and AFROSAI-E as a concrete governance reform delivery under the Renewed Hope Agenda, and request a brief statement of acknowledgement for the public record;
- Set a public implementation benchmark, the Federal Audit Board seated, and implementation proceeds with dispatch.
SIGNED
Centre for Social Justice
Action Aid Nigeria
Paradigm Leadership Support initiative
Accountability Lab
Africa Network for Environment and Economic Justice
The Statecraft Report
BUDGIT
