Audit of Federation Account

The directive by the Senate Committee on Public Accounts to the Auditor-General of the Federation, Mr. Robert Ejenavi, to audit the federation account and financial books of selected government agencies is, indeed, timely.

It is in keeping with constitutional requirements.
Section 85, subsections (2) and (4), demand for a periodic audit of public accounts, and empowers the Auditor-General of the federation to conduct such checks of all government statutory corporations, commissions, authorities and agencies established by Act of the National Assembly.

Specifically, the corporation, parastatals and agencies listed for audit by the Chairman, Senate Committee on Public Accounts, Ahmed Lawal, include the Nigerian National Petroleum Corporation (NNPC), Nigeria Customs Service (NCS), the Federal Roads Maintenance Agency (FERMA), the National Emergency Management Agency (NEMA) and Universal Basic Education (UBE).

We welcome the audit of the accounts of these aforementioned corporation and agencies, not only because of the constitutional mandate given to the auditor-general of the federation, but because, in the main, every nation is as good as its public institutions. This can be measured to a large extent by the level of transparency, or otherwise, in the eyes of the general public. As a matter of fact, the extent of transparency and accountability of these public institutions can go a long way to either strengthen or weaken democratic institutions in that country. Only last week, President Umar Musa Yar’Adua restated how these public institutions have become vital to his government’s policy thrust.

Unfortunately, despite the critical role of these public institutions, many of them have fallen short of the transparency test, as scams have become their second nature. And the nature and depth of such sleaze are sometimes unimaginable, indeed scary. Three key public institutions – NNPC, NCS, and NEMA have been making the headlines lately, all for the wrong reasons.

Recently, NNPC was indicted by renowned chartered accountants and auditors, Akintola Williams Deloitte and Muhtari Dangana & Co. for failing to remit N374 billion to the Federation Account for the months of October – December 2007. According to the auditors’ report, fixed assets account in the NNPC ledger sharply disagreed with the fixed assets registers and schedules. Also, in 2006, NNPC was indicted for withholding the princely sum of N310 billion from the federation account accruing from oil mineral receipts.

Disclosures of mind-boggling financial malfeasance pervade many of our public institutions such as the Customs and Nigerian Ports Authority (NPA). While the federation account is seeing red, few individuals are feeding fat on the finances of these public institutions. Such is the loss of public confidence in our key public service institutions that currently, the United States government is prosecuting some of its citizens involved in high-profile crude oil scam where some top staff of NNPC have been implicated. One of such scams involves N180 million from the Liquefied Natural Gas (LNG) project executed from 1994 to 2004.

Had periodic auditing of the accounts of these public corporations and agencies been carried out, and had the necessary legislative oversight been done diligently, there would have been a steady rise in public confidence and trust in our institutions by both the citizenry and potential investors. Therefore, the consequence of failure of audit of accounts of public institutions erodes the essence of accountability and public service.

We urge the auditor-general of the federation to carry out this directive by the Senate Committee on Public Accounts with utmost sincerity of purpose. Also, we ask all the institutions slated for this audit - NNPC, NCS, FERMA, NEMA and UBE to open their books without let or hindrance. This is the time to probe what goes beyond the walls of these key public institutions. Our democracy cannot flourish if these essential institutions are riddled with sleaze as a result of lack of transparency and due process.