Who is afraid of the Auditor-General?, By Dayo Olaide

President Bola Ahmed Tinubu has a critical opportunity to strengthen Nigeria's public finance management and anti-corruption framework by assenting to the Federal Audit Service Bill. This proposed legislation, passed by the National Assembly, aims to grant the Office of the Auditor-General for the Federation (OAuGF) enhanced institutional and financial independence, significantly expanding its powers and functions. The Bill seeks to reduce revenue leakages, improve efficiency in public spending, and foster greater accountability, thereby bolstering investor confidence and giving substantive teeth to the nation's anti-corruption architecture. Its passage into law is anticipated to modernize Nigeria's audit system, aligning it with international best practices and addressing long-standing deficiencies in public sector oversight.

Nigeria stands at a pivotal juncture in its ongoing quest for fiscal transparency and accountability. The Federal Audit Service Bill, having successfully navigated the legislative process in the National Assembly, now awaits presidential assent, presenting President Bola Ahmed Tinubu with a significant opportunity to cement one of the Fourth Republic's most crucial unfinished reforms. This legislative initiative is not merely an administrative update; it represents a fundamental re-imagining of public finance oversight, designed to inject much-needed rigour into government spending and revenue management.

The proposed Bill is poised to be a game-changer for Nigeria's public sector, promising to fortify the 'last mile' of public finance management. By enhancing the independence and operational capacity of the Auditor-General for the Federation, it aims to significantly curb revenue leakages, drive efficiency in public expenditure, and cultivate an environment conducive to increased investor confidence. Crucially, it is expected to provide a robust framework for Nigeria's anti-corruption efforts, moving beyond rhetoric to institutionalise mechanisms for proactive detection and deterrence of financial malfeasance. This article will delve into the existing legal landscape governing public audit in Nigeria, analyse the transformative provisions of the Federal Audit Service Bill, and consider its profound implications for legal practitioners and the broader public sector.

The Office of the Auditor-General for the Federation (OAuGF) derives its existence, powers, duties, and responsibilities primarily from Sections 85, 86, and 87 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended). Under Section 85(2), the Auditor-General is mandated to audit and report on the public accounts of the Federation and all its offices and courts, with unfettered access to relevant books, records, and documents. Furthermore, Section 85(4) grants the Auditor-General the power to conduct 'periodic checks' on all government statutory corporations, commissions, authorities, and agencies established by an Act of the National Assembly. Notably, Section 85(6) enshrines the Auditor-General's independence, stipulating that in the exercise of functions, the office "shall not be subject to the direction or control of any other authority or person."

Despite these constitutional provisions, the OAuGF has historically operated under significant constraints. The existing legal framework, largely underpinned by the colonial-era Audit Ordinance Act of 1956 and the Public Account Committee Act, CAP P35, LFN 2004, has been widely criticised for rendering the office less effective and efficient. A key limitation under the 1999 Constitution is that the Auditor-General cannot directly audit the accounts of statutory corporations but can only conduct 'periodic checks' and comment on reports from external auditors. Moreover, the very title "Auditor-General of the Federation" has led to ambiguities regarding the scope of jurisdiction, sometimes implying oversight over state accounts, which is inconsistent with the constitutional limitations to federal entities. Efforts to modernise this framework have been protracted, with previous legislative attempts, such as the Public Finance (Management and Control) Bill, 2009, failing to be enacted, leaving the antiquated Finance (Control and Management) Act of 1958 as a foundational, albeit insufficient, piece of legislation.

The Federal Audit Service Bill, which has been in legislative gestation for over a decade, was finally passed by both chambers of the National Assembly – the House of Representatives in 2016 and the Senate in 2018. It was subsequently transmitted to President Bola Ahmed Tinubu for assent. However, as of the current date, the President has neither assented to the Bill nor formally withheld his assent, exceeding the 30-day constitutional window stipulated in Section 58(4) of the 1999 Constitution (as amended). This inaction has drawn criticism, with calls for the President to fulfil his constitutional obligation regarding the Bill. Separately, Nigeria also enacted the Public Finance Management Act, 2024, a comprehensive framework for managing public funds, revenues, expenditures, assets, and liabilities at the federal level, which complements the objectives of the Federal Audit Service Bill.

The Federal Audit Service Bill introduces a suite of transformative reforms designed to fundamentally enhance the operational capacity and independence of the OAuGF. A cornerstone of the Bill is the explicit grant of institutional, administrative, and financial independence to the OAuGF, a crucial step towards aligning Nigeria's audit system with international best practices. This independence extends to the OAuGF's ability to recruit, promote, and discipline its staff, thereby ensuring a professional and merit-based workforce free from undue external influence.

Beyond institutional autonomy, the Bill significantly expands the powers and functions of the Auditor-General. It grants unrestricted access to all information, documents, and records necessary for the proper discharge of statutory obligations. Crucially, the Auditor-General will be empowered to summon and take evidence on oath, with recourse to the courts to compel appearance, and to exercise investigative powers where prima facie evidence of financial impropriety exists. The Bill also introduces a potent enforcement mechanism, allowing the Auditor-General to direct the withholding of emoluments and allowances of any person who fails to respond to audit queries within 30 days. Furthermore, the scope of audit is broadened to include value-for-money and performance audits, forensic audits, and audits of special funds, classified expenditures, donations, grants, loans, all federal government revenues, disaster grants and aids, subsidies, performance information, counterpart-funded projects, and public-private partnerships. This expanded mandate addresses previous constitutional limitations that restricted direct audit of statutory corporations.

The Bill also introduces stringent timelines and accountability measures. It mandates that financial statements of the federal government be submitted to the Auditor-General by June 30 of the following financial year, while accounting officers of Ministries, Departments, and Agencies (MDAs) must submit their statements to the Accountant-General within 90 days of the financial year-end. These provisions aim to eliminate the perennial delays in the publication of federal government audited reports, a significant impediment to transparency. To further enhance public access and transparency, the Bill stipulates that audit reports will be uploaded on the OAuGF's website after submission to the National Assembly. The establishment of a Federal Audit Service and a Federal Audit Board, along with redefined tenure and qualification procedures for the Auditor-General, are also key institutional reforms.

While the Federal Audit Service Bill represents a monumental step forward, it is important to note that some constitutional ambiguities, such as the designation "Auditor-General of the Federation" and its potential for confusion regarding state-level jurisdiction, are being addressed through a separate constitutional alteration bill. The new Public Finance Management Act, 2024, provides a broader framework for public financial management, and the Federal Audit Service Bill will operate in tandem with it, focusing specifically on the audit function. The synergy between these two legislative instruments is crucial for a holistic approach to fiscal governance. The Bill also addresses the critical issue of auditing the OAuGF itself, providing for an independent auditor appointed by the National Assembly to scrutinise its accounts annually, ensuring accountability within the supreme audit institution.

The assent to the Federal Audit Service Bill by President Tinubu is not merely a procedural step; it is a profound commitment to entrenching fiscal discipline, transparency, and accountability within Nigeria's public sector. For legal practitioners, the enactment of this Bill will usher in a new era of compliance requirements and heightened scrutiny for government agencies and entities dealing with public funds. Lawyers will need to advise clients on the expanded powers of the Auditor-General, the stricter timelines for financial reporting, and the potential penalties for audit infractions, including the withholding of emoluments. The ability of the Auditor-General to conduct forensic audits and trace public funds to individuals or corporate bodies will also necessitate a re-evaluation of risk management strategies for entities engaging with the government.

Looking ahead, the immediate focus will be on presidential assent and the subsequent implementation of the Bill's provisions. Challenges may arise in terms of adequate funding for the newly empowered OAuGF, capacity building for its expanded mandate, and potential legal interpretations of its enhanced powers. Legal professionals should closely monitor the gazetting of the Act and any subsidiary legislation or regulations that may follow. Furthermore, the interaction between the Federal Audit Service Act and the recently enacted Public Finance Management Act, 2024, will be a critical area of observation, as their combined effect will shape the future of public financial governance in Nigeria. Proactive engagement with these evolving legal frameworks will be essential for practitioners to effectively guide their clients through the transformed landscape of public sector accountability.