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Audit › Audit Report in Nigeria

 December 20th, 2017  | Audit

The audit report reviews revenues collected by Government Agencies on behalf of the Federation and payments made by the companies operating in Nigeria, such that these transactions follow the international standards and rules. For instance, audit report for oil & gas industry in Nigeria is prepared by chartered accountants appointed by National Stakeholder Working Group (NSWG) in accordance with Nigerian Extractive Industries Transparency Initiative (NEITI) Act of 2007.

Relevant financial transactions are prepared and updated in data collection templates. Separate templates are received from the Government Agencies and the companies. Those templates are then compared and analysed to identify and reconcile possible differences. Financial transactions are primarily carried out in US dollars. Finances received in Naira or other currencies are converted at the average exchange rate for the year.

An independent firm, namely Price Waterhouse Coopers (PwC), concluded a forensic examination of Nigerian National Petroleum Corporation (NNPC) in 2014. NNPC was accused of money laundering. The complete audit report was however unpublished due to Nigerian government’s intervention. There was alleged pressure on the government due to elections. Thus audit reports have apparently significant impact on the political situation of Nigeria.

PwC’s report was finally made public by the Auditor General of the Federation.  The report has vindicated NNPC of failure to remit $1.48 billion into the account of the federation between January 2012 and June 2013. It is a public concern as to why NNPC waited for PwC’s report to detect the anomaly of failure to remittance. NNPC claims to have paid N575 billion in kerosene subsidy. But kerosene is not subsidised in the open market in Nigeria. Therefore, NNPC needs to convince the Nigerians who the beneficiaries of the kerosene subsidy are.

Sustainability study of a company in audit reports is an indispensable feature for a country’s economic progress. PwC’s report recommended restructuring of the NNPC’s operation model. NNPC is a governmental organisation. Hence it should showcase itself as role model for sustainable economic development.

Gavi Alliance (Switzerland) prepared Nigeria’s financial audit in October 2014. The Government of Nigeria has been receiving vaccine and cash-based support from Gavi Alliance since 2002. Gavi performed a Financial Management Assessment in 2009 and an Aide-memoire was signed with Nigeria in July 2012 mentioning conditional cash grants. Nigeria signed a Partnership Framework Agreement with Gavi in December 2013. Gavi Audit revealed that National Primary Health Care Development Agency (NPHCDA) fell short of establishing key control points for grant management in compliance with Transparency and Accountability Policy (TAP). Gavi audit recommended high risk rating for Nigeria’s Fixed Asset Accounting and Management. One reason is that fixed asset verification has not been periodically calculated. It is necessary for NPHCDA to set up a fixed asset tracking mechanism. Gavi has proposed to appoint a Fiduciary Agent (FA) to look after the implementation of cash-based support.  FA’s jurisdiction will include review of all procurement processes covered under Gavi Alliance. Gavi has identified major weaknesses, and hence in due course, Gavi plans to execute full-scale audit of expenses not covered in the present report.

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