It is not news that the federal government has been grappling with the challenge of severe revenue shortfalls. A review of budget implementation reports in recent years shows that government has never fully realized its budgeted revenue targets. This has been a serious source of concern to government and as expected, the government is equally taking steps to remedy the situation. Unfortunately, there seems to be one key area which the government has consistently overlooked in a bid to shore up its revenue and that is the area of effective audit. Effective audit has the capacity to save billions of Naira in revenue for the government through routine audit of revenue generating activities of government and follow up measures to plug leakages in the system.
The current reality is that a lot of government revenues are diverted without getting to the treasury. Ministries, Departments and Agencies (MDA’s) owe taxes amounting to tens of billions of naira. These are taxes paid by innocent taxpayers but diverted and embezzled by MDA’s concerned instead of paying them over to the Inland Revenue. The first point to note is that these sums embezzled by MDA’s are not part of their appropriation or capital for statutory corporations. These sums of money came into their hands for the purpose of forwarding same to the treasury.
Also, government owned revenue generating agencies, commissions, statutory corporations andparastatals hardly remit the correct amount of revenue and operating surplus they generate to the government. Most times, they inflate their expenditure so as to reduce the amount due to government.They engage in all kinds of frivolous recruitment and all manner of expenditures that do not add any value to welfare of Nigerians, all in a bid to shortchange the government and embezzle revenue that rightly belongs to government.
Available evidence shows clearly that the accounting officers and leadership of the MDA’s perpetuating these acts are clearly in breach of the Financial Regulations. The Financial Regulations (104) places the safeguarding of public funds and the regularity and propriety of expenditure under the control of the accounting officer (the permanent secretary or the head of an extra ministerial department). He is specifically charged with ensuring that all government revenues are collected and paid into the Consolidated Revenue Fund promptly.
Withholding and spending monies due to the treasury is a criminal offence for which the accounting officers of the agencies involved should be prosecuted. It is stealing, embezzlement or criminal breach of trust which should attract severe sanctions including imprisonment, loss of office and refund of the withheld sums. However, this is not the case as most of these top government functionaries end up getting away with most of these atrocities without any consequences.
This is where the proposed Audit Bill comes in. It will be recalled that this bill had been passed into law by the National Assembly under the Obasanjo administration but he declined presidential assent. The bill was again passed by the 8th National Assembly and forwarded to President Muhammadu Buhari during his first term, again, for reasons best known to him, he declined assent. It is now very crucial that this bill be once again presented to the 9th Senate and sufficient action taken by all stakeholders to see it passed and assented to by the President. Based on the fact that the auditor, has greater opportunity and more responsibility for the eradication of corruption in our public finance system, the bill seeks to empower the Auditor-General to surcharge and withhold emoluments of any officer culpable for the loss of revenue in public treasury and refusal to respond to audit query; and power to summon any officer and put same under oath. With such an Act in place, losses of government revenue through non remittance from government owned agencies, commissions, corporations and parastatals will be reduced to the barest minimum.
The bill also seeks to empower the Auditor General to authorize persons under him to draw attention tothe profitability, liquidity, stability and solvency of all parastatals,corporations and/or agencies of government, whether there was any delay in payment of the government’s portion of any earned revenue into the Consolidated Revenue Fund. The Auditor General is also to draw attention to 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 which were identified and the general corporate performance indicating achievement against set targets and objectives and whether the finances of the body have been conducted with due attention to economy, efficiency and effectiveness, having regard to the resources utilized. The Audit Bill also provides that in the exercise of the powers conferred on him in section 85 (2) of the Constitution in respect of the account of statutory corporations, commissions etc., the Auditor-General shall ascertain whether in his opinion: the accounts have been properly kept; all public monies have been fully accounted for, rules and procedures applicable are sufficient to secure an effective check on the assessment, collection and proper allocation of revenue; monies have been expended for the purpose for which they were appropriated and the expenditures have been made as authorized. The Auditor General is also to ascertain whether essential records were maintained and that rules and procedures applied are in accordance with applicable statutory provisions, stated accounting policies of the government, with generally acceptable accounting practice, and are essentially consistent with those of the preceding year and sufficient to safeguard and control public property.
Finally the bill empowers the auditor general to be able to apply disciplinary measures where there is a breach of any of government financial regulations by any public officials, since the auditor has the primary responsibility of ensuring transparency and accountability in government financial activities, granting him the power to apply disciplinary measures will serve as deterrent to the stealing of government revenue by public officials, this will make it easier for government to save a lot of much needed revenue for development projects by blocking a lot of leakages.
Ofomata writes from Centre for Social Justice, Abuja.