Auditing's role in public sector governance: the Nigerian Army

The Role of Auditing in Public Sector Governance - The Nigerian Army in Focus Introduction
Governance is delineated as the assimilation of procedures and systems executed by the board regarding notifying, directing, managing, and supervising the entity's activities towards the attainment of its goals and objectives. Concerning the public sector, governance is linked to how goals and objectives are instituted and realized. It also takes into account activities that guarantee the credibility of an entity in the public sector, institutes impartial and evenhanded provision of services, and guarantee suitable behavior of government officials, thereby ultimately diminishing the risk of public corruption (Goodson, Mory, and Lapointe, 2012).
Auditing is a keystone and foundation of good public sector governance. Through the provision of objective, impartial evaluations of whether public resources are utilized and managed responsibly and efficiently to attain purposed outcomes, auditors assist public sector organizations in accomplishing accountability and integrity, enhancing operations, and teaching confidence amongst citizens and stakeholders. It is imperative to note that the role of the public sector auditor is to provide backing to the governance accountabilities and duties encompassing oversight, insight, and foresight. To begin with, oversight takes into consideration whether organizations in the public sector are carrying out what they are meant to do and acts to become aware of and prevent public corruption. Secondly, the duty of insight encompasses help decision-makers through the provision of an independent evaluation of public sector initiatives, policies, operations, and outcomes. Lastly, foresight pinpoints trends, inclinations, and developing challenges. Auditors capitalize on different tools, including financial audits, performance audits, and investigations, in addition to advisory services to accomplish all of these duties (The Institute of Internal Auditors, 2012).
The Nigerian Armed Forces are made of the army, the navy, and the air force. The Nigerian Army is the largest of the three services and is organized in five different divisions. The administrative leadership of the Nigerian military is delivered by the Ministry of Defense (MOD), directed by the Minister of Defense. Notably, the Ministry of Defense's key function is the creation and implementation of the national defense policy and the scheduling of military spending. The ministry delivers administrative and support services for facilitating the teaching, arming, and combat promptness of the armed forces, permitting them to carry out their missions and functions, both concrete and prospective (Omitoogun and Hutchful, 2006). There continues to be a significant problem regarding how the funds allotted to and disbursed to the Nigerian Army are expensed.
Aim
The purpose of this presentation is to conduct an extensive examination of the role of auditing in the public sector government, with a significant emphasis on the Nigerian Army.
Legal and institutional framework for auditing in the Nigerian Army
In Nigeria, akin to other nations, the office of the Auditor-General is the highest audit establishment and is led by the Auditor General. This establishment, similar to its counterparts across the globe, plays a fundamental contributory role in facilitating public sector accountability. The auditing of the public sector is regulated by several legislations that are dissimilar from those that enforce the regulation of the private sector. The legal framework comprises different sets of laws that encompass the 1999 constitution of Nigeria, the Audit Act Chapter 17 of 1958, the Appropriation Act and Control and Management Act. These regulations and rules give powers to the Auditor-General for the federation to carry out audits of the public accounts (Oladele, 2008).
The institutional framework for auditing practices takes into account the legal, institutional, as well as the professional standards that facilitate the regulation of the public sector accounting. Regarding the Nigerian Army, the International Public Sector Accounting Standards (IPSASs), which is sanctioned by the International Federation of Accountants Internal Public Sector Accounting Standard Board (IPSASB), is perchance the key standard for public sector accounting (Sulaimon, 2014). It is imperative to note that Nigeria is a countersign to IFAC and therefore espouses the pertinent IPSASs that are dispensed by IPSASB. What is more, there is also the institutional framework that is, International Standards of Supreme Audit Institutions (ISSAIs). As a whole and working in tandem, these entities facilitate oversight and supervision of the management of the public sector accounting, which encompasses auditing of the Nigerian Army, to mirror transparency and accountability within the more expansive context of good and effective public governance (Sulaimon, 2014; Izedonmi and Ibadin, 2013).
Auditing process and procedures in the Nigerian Army
The audit process and procedure of the Nigerian Army includes an impartial analysis and investigation of some aspect of the organization's operations to substantiate the magnitude to which the army has complied with the expected benchmarks. The auditor carries out a financial audit in examining the Nigerian Army's financial records to make certain that they are accurate and a true reflection of the company. The audit process also includes a compliance audit, which is intended to make certain that the Nigerian Army is compliant with the applicable rules and regulations. The audit processes and procedures of the Nigerian Army comprise of the following:
1. The audit process commences with the issuance of a sort of notice to the Nigerian Army. This report, in general, specified the main objective of the audit, when such an audit will be carried out, as well as the date and time of a preliminary meeting the auditor would like to plan with the leaders of the Nigerian Army. Furthermore, this notice explicates the list of the kind of documents necessitated by the auditor for examination.
2. The subsequent phase in the audit process is planning the audit. This is undertaken before meeting the leaders of the Nigerian Army to formulate a suitable strategy for the meeting in addition to the fieldwork that will be carried out after that. The auditor will point out the key areas of inquisition and concern, as well as the particular information they plan on investigating to examine such areas. This is also intended to provide the Nigerian Army with sufficient time to gather these necessitated documents.
3. After that, the auditor conducts a preliminary meeting with the senior management of the Nigerian Army. The meeting also incorporates administrative personnel, if necessary. The main objective of this meeting is to provide the auditors with a chance to illustrate the audit process, in addition to providing the Nigerian Army with an opportunity to articulate any practical, strategic, or planning concerns that might exist.
4. The initial active auditing phase of the process is the fieldwork. Usually, a more comprehensive schedule is normally articulated to ensure that the presence of the auditors in the entity does not cause any disruption. The auditor usually conducts interviews with important employees to examine the operational procedures and practices of the army. This phase of the process also encompasses checks of documents to ascertain whether they are sound. The team should be in constant contact with the auditor general to make a clarification of procedures and guarantee proper access to necessitated documents.
5. Once the auditing team finishes the assessment of documents and fieldwork, the following phase is the preparation of a draft audit report. This official document provides a detail of the main objective of the audit, the different procedures utilized by the auditor, the different documents that were assessed, and the findings obtained. The document also contains different initial unresolved problems and concerns.
6. This final document is handed to the senior team in the Nigerian Army for their assessment and response. Through the document, the auditor normally requests them to give a response to every finding provided and also inferences indicating whether they are in agreement or disagreement with the issues indicated, plans and measures to rectify any pinpointed problems and the anticipated date by which all of the problems will have been addressed.
7. The finalized audit report and the document are dispensed to all the different stakeholders, both internal and external such as the Ministry of Defense, the Public Accounts Committee, and the National Assembly (De Aquino et al., 2010).
The role of the auditor in the Nigerian army
There are various roles and responsibilities carried out by the auditor in the Nigerian Army.
1. Financial Audit
One of the fundamental roles played by the auditor is undertaking a financial audit. Every audit cycle commences with the conduct of the half-year audit on every financial year. Part of this role encompasses issuing the Nigerian Army with an audit circular regarding the start of the year-end audit. The auditor also has the responsibility of providing notifications of management discussion and analysis (MD&A) regarding the commencement date of the year-end audit on or before the final month of the year and notifying the Nigerian Army the individuals who will be accountable for the audit and liaison with the army. The audit team leads who will be responsible for the management of the audit and deal directly with the army in the course of the audit and also information regarding the requirements of the supporting documents as well as other audit pieces of evidence (Office of the Auditor-General, 2019).
2. The Auditor-General checks and scrutinizes the spending of public funds and resources allotted to the Nigerian Army by comprehensively examining whether such finances were used for the intended purposes concerning cost-effectiveness and efficiency. These checks are carried out on an annual basis and are intended to call to account all of the individuals within the Nigerian Army entrusted with the management of the resources and finances granted. Therefore, this guarantees decisive authority, oversight, and control over all elements of the army's finances (Office of the Auditor-General, 2019).
3. The auditor plays the role of risk management. Notably, the necessity for proper and effective risk management approaches within the public sector emerges from the intricacy and dynamism of the operating setting, steadily increasing the needs of society in addition to the overall unpredictability sequence and diminishing of resources. The auditor conducts an assessment and oversight of risks that the Nigerian Army faces, providing recommendations of the controls necessitated to alleviate those risks and assessing the trade-offs essential for the army to achieve its strategic and operational goals and objectives. The role of the auditor is to assess risk exposures about the Nigerian Army's governance, operations and information systems concerning the dependability and reliability of financial and operational information, efficacy and efficiency of military operations and programs, protection of equipment and assets and compliance with regulations, rules, policies, processes, and contracts (Mebratu, 2015).

Issues and challenges to effective auditing
Some significant issues and challenges hamper the attainment of effective auditing, especially concerning the Nigerian Public Sector.
Problematic Independence of the Auditor-General
The independence of the Auditor-General is outlined and provided for in the 1999 constitution of the nation. Nonetheless, the independence of the auditor-general in Nigeria is hampered in different ways. First of all, the auditor-general lacks the authority to implement and put in force compliance and approvals on the reports that are presented to the Nigerian National Assembly's Public Accounts Committee. As decreed in the constitution, the auditor-general is necessitated to hand over his report to the public accounts committee. Secondly, there is the challenge that the constitution repudiates the auditor-general the rights and responsibilities of both employing and firing his personnel. Rather, this authority is granted to the Federal Civil Service. The inference of this is that even if there is misconduct amongst the staff, the auditor-general cannot fire or lay off such personnel. Third, there is the issue that the auditor-general lacks the empowerment and authority to facilitate the appointment of external auditors for different agencies and organizations in the Public Sector, such as the Nigerian Army (Ijeoma and Nwufo, 2015).
Insufficient Funding and Lack of Proper Physical Infrastructure
The office of the Auditor-General does not have adequate funding. Notably, the office lacks sufficient financing for carrying out comprehensive and extensive audit inspections and investigations. What is more, the office also does not have adequate money for carrying out the necessitated continuous training and educating of the staff employed within the office. What is more, the office of the Auditor-General lacks the up-to-date information technology systems that can facilitate more comprehensive auditing. There is also the lack of other necessitated aspects such as equipment and also vehicles for facilitating operations. Consequently, these have the negative impacts of demotivating and demoralizing the staff (Ijeoma and Nwufo, 2015).
Non-Assenting of the Audit Bill by the President and Internal Corruption
Towards the culmination of last year, the National Assembly passed the Audit Bill for the President to consent to it. However, President Buhari has created major concern and doubt because he did not assent to the bill and also did not repudiate the bill (Oyegbade, 2019). This is a major problem faced by the office of the Auditor-General owing to the reason that major of the financial frauds and misappropriations linked to the Nigerian Army and the Public Sector at large are executed and aided by senior individuals in the ministries and extra-ministerial departments. The failure of President Buhari assenting to the bill provides a greater halfhearted attitude towards the prevailing legislation, regulation, and audit queries.
Furthermore, this fails to give the Auditor-General the power to enforce his duties in fighting corruption (Oyegbade, 2019). More often than not, these high ranking individuals in ministries and the public sector facilitate collusion and also repudiate from gaining access to documents. Furthermore, failure of the bill being assented means that the sanctions on organized crimes and financial scams will continue being exceeding lenient. The majority of the sanctions emphasize the retrieval of funds, warning, and elimination from schedule and prohibition (Ijeoma and Nwufo, 2015).
Corruption
Corruption is existent widely in the system. More often than not, legislators partake in the manipulation of the funds' appropriation process and procedure at the National Assembly to serve personal and private interests instead of providing such benefits to the Nigerian armed forces. Suspicious procurement processes, falsely ballooned payrolls, poor financial management, and weak and poor auditing systems at national security adviser’s workplace, the ministry of defense and also the head offices of the armed services usually gives the implication that funds are averted and allocated to private or non-military purposes. Furthermore, the money allocated and purposed for military arms and ammunition, as well as other equipment, are more often than not made substandard and not always delivered.
What is more, inappropriate funding, corrupt processes in procurement as well as poor maintenance of the finances give rise to severe deficits in logistics and equipment? This leads to significantly poor governance in the Nigerian military (International Crisis Group, 2016). For instance, in 2016, it was established that the funds amounting to N558.2 million were supposedly diverted every month from the Nigeria Air Force account into the personal pockets of individuals for serving private needs, which implies that there was poor misappropriation of funds in the Army, Air Force and Navy (Ujah, 2016).
Corruption is deemed to be the misery of the Nigerian societal order, which has marred the nation and beleaguered all endeavors to enhance the lives of the citizens. Even though corruption is existent in other nations and not just in Nigeria, the pervasiveness and magnitudes involved in the nation are overwhelming. In a largely reasonable sense, corruption auditing is anticipated to continue being a significant worry of government auditors akin to the similar manner fraud auditing is to auditors of private institutions. But then again regrettably, government auditors have continued to be considerably inactive in corruption audit practice advancement. Specifically, the Auditor-General of the Federation is not just theoretically handicapped in the combat against corruption in public financial management, but also lack the necessary collaboration of the Nigerian National Assembly in the battle against official corruption (Akhidime and Izedonmi, 2013).
Capacity Problems
Even though auditing has been a topic of significant deliberation amongst government circles, it continues to be the fundamental and pivotal control function in the financial control system of the Nigerian government. Regrettably, the office of the Auditor-general continues to be poorly equipped for its massive responsibility towards the battle against corruption in the nation. Specifically, the office not fully equipped owing to the prevailing low skilled workforce. Also, poor compensation and also civil service circumstances make the office of the Auditor-General to be hardly attractive to the top talented and competent professional accountants. Furthermore, poor regular training and competency appraisal in modern forensic auditing methods leave the existing staff in the office to be hardly prepared in pinpointing and collecting sufficient evidence and to efficaciously undertake its functions or role of supervision and oversight, insight and foresight or risk-based auditory fact-finding accountabilities (Akhidime and Izedonmi, 2013).
Ghost Workers
The integration of information technology will be a significant facilitator in the facilitation of effective auditing. However, it is not by itself an adequate solution in completely fixing the problem being faced in the Nigerian Army of payroll fraud. For instance, based on the Auditor General's report on Nigeria's public finances, a payroll audit carried out at the ministry of defense established that there were still officers included in the ministry's payroll of Salary Grade Level 2 and 3, which violates a directive given by the Federal government. Furthermore, the downside to this is that such matters are not usually reported but are rather disclosed by the offices to serve personal interests (Fawehinmi, 2018).
Constitution Limitation
By a long way, the weightiest of all incapacitating challenges against the capability of the Auditor-General, depending on the provision of the Audit Act to carry out the apprehension of corrupt activities in government, is the express restriction enforced on him by the 1999 constitution. Also, even concerning the preceding constitution of 1979, there was such a restricting provision. It is imperative to note that the constitution explicates among other aspects that the Auditor General shall not carry out the auditing of the accounts of government statutory companies, parastatals, and organizations established by legislation in Nigeria. Notably, the pertinent provisions of section 85 of the 1999 constitution proclaim the following:
"The public accounts of the federation and all offices and courts of the Federation shall be audited and reported on by the Auditor-General who shall submit his reports to the National Assembly; and for that purpose, the Auditor-General or any other person authorized by him in that behalf shall have access to all the books, returns and other documents relating to those accounts" (Constitution of the Federal Republic of Nigeria, 1999, Section 85(2)).
"Nothing in subsection (2) of this section shall be construed as authorizing the Auditor General to audit the accounts of or appoint auditors for government statutory corporations, commissions, authorities, agencies, including all persons and bodies established by an Act of the National Assembly..." ((Constitution of the Federal Republic of Nigeria, 1999, Section 85(3)).
These two provisions above are, without a doubt, perplexing and frustrating. These provisions imply that on the one hand, the Nigerian constitution hands the Auditor General the authority and power to carry out auditing of the accounts and documents of all the offices and courts of the federation, which generates no omission to the magnitude of the operations of the powers of the Auditor-General. In contrast, the implication is that these provisions remove and eradicate such widespread powers and authorities by rendering that such authorities shall not be extended to government statutory entities, corporations, and agencies. The general influence of all these limits on the powers of the Auditor-General is that he cannot apprehend corrupt actions and activities in government as well as reporting justly and candidly on the state of the accounts of the Federation (Ogunyemi, 2014).
Way forward
Several actions can be carried to facilitate a positive way forward in facilitating effective auditing in the Nigerian public sector and guaranteeing good governance in the Nigerian Army.
1. They were consenting to the Audit Bill. Devoid of proper checks via effective auditing, there will be substantial erosion of good governance, and consequently, the corrupt undertaking will thrive unimpeded. One of how effective auditing can be facilitated is assenting to the Audit Bill. Despite the bill being passed in the National Assembly, President Buhari did not assent the bill; however, concurrently, did not decline it. The downside of this is that it reflects that perhaps the President, the leader of the nation, is not ready to institutionalize the fight against corruption. This hampers the significant endeavors of the office of the Auditor-General. This bill needs to be consented to make sanctions to be tighter and harsh. If necessary, there needs to be instituted jail term devoid of having the option of paying fines. Ultimately, this will boost the restraining effects of the audit functions (Ijeoma and Nwufo, 2015).
2. Provide outright independence of the Auditor-General. Significantly, the independence of the office of the Auditor-General ought to be the cornerstone for efficacious control, accountability, and oversight of the public service system. The auditors should have a satisfactory level of integrity and accountability to ensure that independence is not influenced or compromised. Presently, whereas the procedures for the appointment and elimination of the auditor are explained in the constitution, his outright independence is not warranted especially owing to the reason that financing of the office continues to the accountability of the executive arm of the government. Furthermore, this independence also needs to be affixed in legislation. Nonetheless, the way forward concerning this is the need for well-functioning entities and institutions to be existent (Ijeoma and Nwufo, 2015).
3. An additional way forward is enabling the capacity of the Auditor-General office. It is necessary to enhance the practice in this office through the sanctioning of the legislation that will endeavor to enhance the practice of auditing within the public sector. Notably, this will encompass legislation instituting auditing and reporting standards, regulations adjoining the scope of the public sector audit, legislations handing the Auditor-General and the office as a whole in addition to his equivalents in the states and local government extensive powers and authorities of inquiry to expose corruption, haul out inefficacy in the running of the Nigerian Army, subsequently strengthening the level of culpability and transparency in the utilization of public finances (Akhidime and Izedonmi, 2013).
Conclusion
Good governance is essential in improving the sustainability of a nation. One of the key ways to guarantee this is through auditing. The main aim of the public sector is to assure the financial statements, operations, and activities of the public entities. The Auditor-General's audit role is anticipated to provide impartial, objective evaluations of whether public resources are dutifully and efficiently managed to attain planned results. The public sector continues to be the core of any government's development endeavor and devoid of a responsible, well-organized, and principled public service, it is impossible to achieve good governance in the public service. As part of the public sector, the main role of the auditor general is to conduct an extensive and thorough audit of the Nigerian Army. However, there are different challenges ascertained that hamper the effective implementation of auditing. These include poor accounting settings, dealing with the plague of fraudulent activities and corruption within the public sector, lack of adequate and suitable contemporary technology, in addition to the absence of management capability and suitable allotment and firing of management responsibilities. There is also the concern that the audit bill has not been assented by the President and the limitations of the provisions of the constitution. To ensure audit institutions in general to meet their constitutional obligations, such as auditing the Nigerian army, it is significant to guarantee that the audit independence is three-fold, rendering financial, legal, and administrative autonomy.
Recommendations
Based on the comprehensive analysis of the prevailing circumstances of auditing of the Nigerian Army together and the findings obtained, the following recommendations are made:
1. The government should make certain that the book of accounts, documents, and official financial statements of the Nigerian Army are regularly subjected to independent and uninterrupted auditing and investigation by the external auditor and organized by the office of the Auditor-General.
2. Institutional framework improvement is essential and pivotal. Therefore, it is recommended that the different institutional and regulatory bodies including Institute of Chartered Accountants of Nigeria (ICAN), the Nigerian Accounting Standards Board (NASB), and the National Assembly within the nation ought to come into collaboration and dispense an integrated and authoritative framework and standard, which will be a kind of codification to offer guidance to the independence of auditors in Nigeria. Also, this will guarantee auditor independence as a processional necessity is sustained and safeguarded during the audit of the Nigerian Army.
3. An additional recommendation takes into account improvement of administrative capacity, which would encompass the organization of additional training and educational workshops for the staff in different positions such as procurement management, project oversight and evaluation in addition to the operation of payroll systems in the army, in tandem with internal accounting and auditing. This also includes enhancing equipment and logistics by carrying out more regular and comprehensive equipment audits, making certain that there is better maintenance of the prevailing assets and heartening private corporations to react to fundamental procurement needs.
4. Additional power backed by statutes should be granted to the external auditor to free him or her from being intimidated by members of the Nigerian army or also influence or dissuaded to partake in corrupt activities.
5. The auditors must be changed and rotated regularly to evade excessive getting used to members of the Nigerian Army. Furthermore, this also helps in avoiding any kind of colluding to hide or conceal documents.
6. The auditor should be allowed to have sufficient time in carrying out the audit, including physical visits to the Nigerian Army to check personnel payroll and also in checking the equipment included in the financial reports. This is essential owing to the reason that the participation of an auditor in auditing activities is subject to face time limitations. More often than not, time restraints affect the conduct and behavior of the auditor. Imperatively, auditing as a line of work in its entirety endeavors to control audit quality through the instituted standards and course of action. However, audits that are done within a limited time frame are detrimental to the quality of the audit. The pressure on the set timelines fails the auditor to concentrate or lay emphasis on the qualitative features of misstatements, which shows the potential of financial reporting that is fraudulent. This usually leads to material misstatements on the part of the auditors, which negatively impacts the quality of the audit.



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