FG Moves to Withhold Assent to MDAs’ Budgets over Non-rendition of Accounts

James Emejo

The Executive Secretary/Chief Executive, Financial Reporting Council (FRC) of Nigeria, Mr. Shuaibu Ahmed, has said it is working with the National Assembly and other relevant agencies to make it a rule that the budget proposals of public sector entities in default of filling their Annual Financial Statements (AFS) of the previous year would not be considered and approved for the coming year.

He said in 2021, a total of 120 public institutions comprising of government parastatals, agencies, and government business entities had filed their financial statements with the council, describing it as a modest progress.

He spoke at the opening of a 2-day practical learning and development programme, themed: “Timely Rendition of Financial Statements by Ministries, Departments and Agencies (MDAs),” which was organised by the FRCN in collaboration with the Office of the Accountant General of the Federation (OAGF) and the Association of Chartered Certified Accountants (ACCA).

This came as the ACCA Nigeria’s Country Head, Mr. Tom Isibor, said non-rendition of had implications for Foreign Direct Investment (FDIs) into the country.

He said since the COVID-19 outbreak, there had been new demands on public sector organisations and public financial management to improve transparency, accountability and sustainability.

He said, “And this is primarily coming from investors – people, individuals, organisations and governments that want to bring money into the Nigerian economy but they want to see how we manage our public accounts and want to see what our spending pattern is before they feel confident and comfortable to bring money into the economy.”

Ahmed, however, said plans had been concluded to further impose fines and penalties on those agencies which had failed to comply with financial regulations in line with the provisions of the FRC Act and its extant rules.

He added that most of the financial statements filed with the council are not in timely manager.

The programme seeks to find solutions to all the issues militating timely rendition of audited financial statements among public institutions.

The FRCN boss said a situation where critical institutions of government, some of them apex regulatory bodies, are over two to three years behind in their audited accounts will no longer be tolerated going forward.

He, however, noted that the council was not unmindful of the existing challenges being faced by MDAs in accessing their monthly bank statements on a timely basis from the Central Bank of Nigeria (CBN) since the commencement of the Treasury Single Account (TSA).

The FRCN boss stressed that public sector entities play a pivotal role in national economy as major drivers of productive activities and the largest single business entity in the country.

He said as a bedrock the economy, the importance of quality financial reporting in the national economy cannot be over emphasized, adding that credible financial reports are no doubt critical as they not only support efficient decision making by those charged of governance but also boost the perception index of the country and by extension, enhancing Foreign Direct Investments (FDIs) and Foreign Portfolio Investments (FPIs) inflows.

 Isibor, nonetheless said, “We’ve seen that the activity or inactivity of government around the world is essential for sustainability of any economy.

“That’s the reason why we as a country need to take reporting seriously because if our reporting has been giving us indication of how our spending pattern is and the sort of investment we have been making in different sectors, we will perhaps be able to respond better and faster when we have such crisis in the future.”

He said, “There’s a new demand on transparency, accountability and sustainability around the world and this is primarily coming from investors – people, individuals, organizations and governments that want to bring money into the Nigerian economy but they want to see how we manage our public accounts and want to see what our spending pattern is before they feel confident and comfortable to bring money into the economy.

“And the work you do on daily basis is absolutely critical to delivering that demand…Accountants are custodians of data. It is critical that we are to ensure not just rendition of accounts but the timeliness of it is also critical because it is needed across the world for government to be able to take effective decisions that will impact lives.”