Nigeria Auditor-General: N33.75bn Unverified Cash Transfers Found

• Nigeria's Auditor-General, Shaakaa Chira, reported N33.75 billion in cash transfers to over 3.29 million beneficiaries lacked sufficient verification evidence.
• The 2024 Annual Report on Non-Compliance/Internal Control Weaknesses identified eight audit queries at the National Cash Transfer Office for the 2023 financial year.
• Auditors were denied access to crucial Remita statements needed to reconcile payments, raising risks of public fund loss or payments to fictitious persons.
• An additional N36.74 billion in payments were made without required prepayment audits, and N4.616 billion lacked supporting vouchers.
• The Auditor-General recommended accounting for or recovering all unaccounted funds and remitting them to the Treasury, with the NCTO management failing to respond to queries.

This report signals heightened scrutiny on public fund management in Nigeria.

Nigeria's Auditor-General for the Federation, Shaakaa Chira, has brought to light significant financial irregularities within the National Cash Transfer Office (NCTO), revealing that N33.75 billion in cash transfers intended for over 3.29 million vulnerable households lacked sufficient evidence to confirm genuine receipt. These findings are detailed in the 2024 Annual Report on Non-Compliance/Internal Control Weaknesses in Ministries, Departments and Agencies of the Federal Government, which scrutinizes the NCTO's operations for the 2023 financial year.

The comprehensive report, obtained by Saturday PUNCH on Friday, identifies eight distinct audit queries involving billions of naira and points to systemic weaknesses in the NCTO's internal control mechanisms. Beyond the primary concern of unverified beneficiary payments, the audit also flagged substantial sums paid without proper prepayment checks and expenditures lacking supporting documentation, raising serious questions about the management of public funds allocated for social intervention programs.

The core of the N33.75 billion discrepancy revolves around electronic transfers made to 3,295,207 households and beneficiaries. These individuals were reportedly drawn from the National Social Register (NSR) and enrolled on the National Beneficiary Register (NBR) across 35 states throughout 2023. However, auditors found that the paid vouchers associated with these transactions did not contain complete beneficiary details, hindering verification efforts and obscuring the true recipients of these substantial funds.

A critical aspect of the audit's findings concerns the inability to reconcile payments with listed beneficiaries. Auditors specifically requested the Remita statement, a crucial document for authenticating payments against the NSR and NBR. Despite these efforts, NCTO accounts staff reportedly obstructed and denied access to this vital information, effectively frustrating the audit process and preventing a definitive reconciliation of the funds.

This lack of transparency and the obstruction of audit procedures led the Auditor-General to identify significant risks, including the potential loss of public funds and the possibility of payments being made to ineligible or fictitious individuals. In response, the report recommends that the National Programme Manager be held accountable to the Public Accounts Committees of the National Assembly for the N33.75 billion. It further stipulates that evidence of beneficiary receipt must be provided, and if the funds cannot be satisfactorily accounted for, they should be recovered and remitted to the Treasury. Notably, the NCTO management failed to respond to this specific audit query, exacerbating concerns about accountability.

The 2024 Auditor-General Annual Report Nigeria underscores a pressing need for enhanced oversight and stricter adherence to financial regulations within government agencies. The identified issues highlight a critical gap in the verification process for large-scale cash transfer initiatives, which are designed to support vulnerable populations but are susceptible to abuse without robust controls.

Beyond the N33.75 billion in unverified cash transfers, the audit report detailed other significant financial irregularities within the National Cash Transfer Office. A staggering N36.74 billion in payments were identified as having been made without proper prepayment audits. This involved 215 payment vouchers related to SS, IDA, and output-based transactions in December 2023, all processed without the mandatory internal audit checks or prepayment scrutiny required by extant regulations. Instead of conducting pre-payment verification, the Internal Audit Unit performed only post-payment checks, a deviation that carries inherent risks.

This procedural lapse raises concerns about the potential misapplication and diversion of public funds, prompting a recommendation for the N36.74 billion to be thoroughly accounted for before the National Assembly. Furthermore, the report flagged 101 payments totaling N4.616 billion from the NCTO's S&S/IDA Cash Book for various expenditures, for which the corresponding paid vouchers were not presented for audit examination. This absence of critical documentation again points to risks of misapplication and diversion, with the Auditor-General recommending that these funds also be accounted for or recovered and remitted to the Treasury.

Adding to the list of concerns, the audit also highlighted N350.18 million in unsubstantiated funds disbursed to state coordinators. Separately, the report noted 32 payments amounting to N3.09 billion made to various states specifically for the enrollment of unbanked beneficiaries. These findings collectively paint a picture of significant control weaknesses and a lack of transparency in the management of substantial public resources intended for social intervention programs.

The comprehensive audit by Shaakaa Chira, Nigeria's Auditor-General, serves as a critical signal regarding the heightened scrutiny on public fund management, particularly within Federal Government social intervention programs. The identified lapses, ranging from unverified beneficiary lists to payments lacking essential pre-audit checks and missing vouchers, underscore a systemic vulnerability that could lead to the loss or misdirection of taxpayer money.

This report signals heightened scrutiny on public fund management in Nigeria. The recommendations for accounting to the National Assembly and the potential recovery of funds emphasize the government's commitment to Nigeria public funds accountability. The inability of the NCTO to provide crucial documentation and its failure to respond to audit queries further highlight the challenges in ensuring transparency and compliance within public sector operations. The findings of this 2024 Auditor-General Annual Report Nigeria are likely to prompt a more rigorous examination of financial controls across all ministries, departments, and agencies, particularly those handling large-scale disbursements to the public.

This report signals heightened scrutiny on public fund management in Nigeria. Lawyers advising entities involved in government contracts or social intervention programs should ensure clients have robust internal controls and meticulous documentation to withstand potential audits and avoid accountability issues, especially concerning beneficiary verification and payment processes. Compliance officers in such organizations must review their systems for adherence to financial regulations and audit requirements.

Source: Original reporting via Saturday PUNCH