Nov. 6, 2023

Ekiti, Lagos and Osun States have topped rankings in the Institute of Chartered Accountants of Nigeria (ICAN) Accountability Index rating system for states’ compliance with audit rules as of October 2023.

According to the Institute, the assessment of states’ audits focuses on compliance with audit rules and regulations and the quality and timeliness of audit reports, resulting in a rating of Excellent, Good, Fair, or Poor for each state.

Ranking of State by ICAN-AI, courtesy ICAN

The audit report has been one of the dark recesses of governance in Nigeria even as the 1999 Nigerian Constitution mandates states and local governments to submit audited accounts by the auditor general after reviewing the financial statement by the Accountant General.

Political Economistng reports that the ICAN audit rating for states in Nigeria was instituted in 2014, to assess the financial management and accountability of state governments in Nigeria.

The report shows 21 states; Abia, Adamawa, Bauchi, Bayelsa, Benue, Borno, Cross River, Ebonyi, Gombe, Imo, Jigawa, Kano, Katsina and Kebbi, Kogi, Nassarawa, Niger, Plateau, Sokoto, Taraba, Yobe and Zamfara earned a “fair ” ranking.

Speaking on the rankings, Dr. Innocent Okwuosa, the 59th President of ICAN, noted that the rankings suggest an overall trend of improving compliance with the constitutional requirement to audit state and Local Government accounts since the introduction of the Accountability Index.

“However, significant variation still exists among states, highlighting the need for continued efforts to ensure consistent compliance and strengthen accountability practices across all states in Nigeria. The rankings provide valuable insights into the progress and areas that require further attention.”

“Compliance varies significantly among states, as reflected in their rankings. States like Jigawa, Bauchi, Gombe, Edo and Niger have consistently improved their rankings over the years, suggesting a sustained commitment to auditing accounts. However, some states, like Bayelsa and Ekiti, have shown fluctuating performance, indicating the need for more consistent efforts.”

“The rankings suggest an overall trend of improving compliance with the constitutional requirement to audit state and LG accounts since the introduction of the ICAN Accountability Index”.

“However, significant variation still exists among states, highlighting the need for continued efforts to ensure consistent compliance and strengthen accountability practices across all states in Nigeria. The rankings provide valuable insights into the progress made and the areas that require further attention”.

What the rankings mean/criteria

A “Fair” ranking by the ICAN rules means “The state government has a fair level of compliance with audit rules. The audit reports may be submitted late or may not be of high quality. The state government may also not implement all of the audit recommendations.”

Criteria for index are the timeliness of reports, the quality of audit reports and the implementation of audit reports. Assessment of the quality of audit reports is based on three factors of

1.Whether the audit reports are prepared following the relevant accounting and auditing standards.

2.Whether the audit reports are comprehensive and informative.

3.Whether the audit reports contain any findings or recommendations.

The “implementation of audit recommendations” criterion measures how well state governments implement the audit recommendations made by the auditors.

Other marks on the rating are:

Excellent: The state government has a high level of compliance with audit rules. The audit reports are submitted on time and are of high quality. The state government also implements the audit recommendations effectively.

Good: The state government has a good level of compliance with audit rules. The audit reports are submitted on time and are of good quality. The state government also makes an effort to implement the audit recommendations.

Poor: The state government has poor compliance with audit rules. The audit reports may be submitted very late or may not be submitted at all. The audit reports may also be of poor quality. The state government may also not implement any of the audit recommendations.

A past ICAN president, Ismaila Zakari, managing partner of Ahmed Zakari & Co, drew attention to the index at the Audit Reporting Workshop by FrontFoot Media Initiative in Lagos on 25-26 October, 2023.

Zakari who spoke on: Advancing Good Governance and Democracy Through Effective Public Financial Management Systems  underlined the relationship between democracy, good governance and accountability. He asserted that the audit report is one of the steps to ensure accountability in governance.

Other speakers at the Audit Reporting Training include: Mr Tilewa Adebayo, Chief Executive of The CFG Advisory, Lagos and Mrs Onawunmi Omobolanle, partner Assurance at Deloitte Consulting.

Mr. Emeka Izeze, director and partner, said FrontFoot Media Initiative conducts the Audit Reporting Training to contribute to media capacity building and enhance accountability by state and local government officials.

FrontFoot has held audit reporting workshops in Benin, Awka, Abuja, and Lagos.

Reporting by: Theresa Igata