Question Tag: financial accountability

The Federal Government of Nigeria is committed to the principle of transparency and accountability in all its financial activities. The country has diverse sources of revenue which include natural resources, ranging from iron-ore, crude oil, zinc, tin-ore, and coal. In order to enhance its agenda of “zero tolerance for corruption,” the country established, among others, the Nigeria Extractive Industry Transparency Initiative Commission (NEITI) with the sole aim of reducing corruption in the extractive industry. The establishment of the commission was backed by an Act of National Assembly in 2007.

The commission normally carries out annual audits of accounts of companies in the extractive industry after obtaining their statements of accounts on a regular basis. Records available to NEITI revealed that five out of fifty-two companies in the industry failed to render their statements of accounts for the year 2016; another eight companies rendered falsified statements of accounts, while thirty-nine companies rendered accurate statements of accounts.

The records of receipts and expenditures of NEITI revealed total receipts of N2,396,581,900 in 2016, out of which N1,998,500,770 was expended on the commission’s activities up to December 31, 2016.
Further scrutiny of the accounts revealed receipts of gratification by some government officials in the eight companies that presented falsified statements of accounts. There were also expenses on frivolous overseas tours allegedly for attending seminars and workshops.

In line with the Act that established the commission, the audit reports on the financial activities of the companies in the extractive industry have been sent to the President and the National Assembly.

Required:
a. Discuss five actions that should be taken against the companies that failed to render their statements of accounts and those that rendered falsified statements of accounts.
(7½ Marks)
b. Calculate the unspent amount by the commission as at December 31, 2016 and the treatment of the unspent amount.
(4 Marks)
c. Outline five functions of NEITI as contained in the Act that established it and indicate the members of the National Stakeholder Working Group (NSWG) as contained in the NEITI Act, 2007.
(12½ Marks)
d. Explain six procedures for the appointment of auditors and publication of reports as contained in Section 4 of NEITI Act, 2007.
(6 Marks)