The Role of the Auditor General for Local Government

The Role of the Auditor General for Local Government

 Auditor General – According to Ome (2003:1), in the recent past, local government has increasing financial responsibility with an enormous amount of The civil Service Reform spelt out the following functions for Auditor General for local government. Accordingly, the Auditor General for local government shall:

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1. Have power to carryout on regular basis the Auditing of local government accounts.

2. Have power to sanction and surcharge any officer as in financial memorandum (FM) 39:3.

3. Be the chairman of the local government audit alarm committee.

4. Have access to the state governor through the governor’s representative on Audit Alarm Committee.

5. Notify the public accounts committee and the local government councils of audit alarm of significant importance and serious prepayment Audit queries for which the accounting officer of the local government is liable responsible.

6. Inform both the public accounts committee, the local government council and the governor in writing where a local government accounting officer does not respond within the stipulated time to query that affect his office.

7. Where failure to answer audit query by an officer other than the chairman, the Auditor General shall impose through the Local Government Service Commission the necessary sanctions or punishment on the erring officer who shall have right of appeal to Public Account Committee. In addition, any other sensitive issue which because of its urgency cannot wait until the committee is convened shall be dealt with by the Auditor General of Local Government.


The appointment, powers and removal of the Auditor General for Local Government are spelt out in the following documents:

1. Decree No. 15 of 1988 as amended by Decree No. 25 of 1989.

2. Decree No. 3 of 1999-Basic Constitutional Provision.

3. 1999 Constitution of the Federal Republic of Nigeria Section 125 and 316 respectively.

4. Model of Financial Memoranda for Local Government

5. Ebonyi State Law No. 003 of 1999 etc.


Section 34 A (1) of decree No. 15 of 1988 as amended by decree No. 25 of 1989 stimulates that there shall be an Auditor General for Local Government of a state who shall be appointed by the Governor of the State, on the recommendation of the State Service Commission and approval by State House of Assembly.

Section 74 (1) of decree No. 3 of 1999 stipulates that there shall be an Auditor General for each State and an Auditor General of the Local Government Council of a State who shall be appointed in accordance with provision of section 75 of this decree. Section 75 (1) of the decree stipulates that the Auditor General of the State and Auditor General for Local Government of a State shall be appointed by the governor of a State on the recommendation of State Civil Service Commission subject to confirmation by the house of Assembly of the State. Section 75 (2) of the decree stipulates that power to appoint person to act in the office of the Auditor General for Local Government Council of a State shall be vested in the governor.


The power of Auditor General for Local Government are defined in section 39 (1) of Financial Memoranda. Accordingly, the Auditor General shall have power to:

1. Carry out on regular basis, the auditing of local government accounts.

2. Have access at all time to all financial books records, returns and other documents relating those accounts.

3. Sanction and surcharge any officer as in financial memoranda 39:3.

4. Be the chairman of the Local Government Audit Alarm Committee.

In order to ensure that the Auditor General is protected in exercising his powers, section 34 A (5) of decree No. 15 of 1988 as amended by decree No. 25 of 1989 stipulates thus, “in the exercise of his functions under this decree, the Audit-General for Local Government of the State shall not be subjected to direction or control of any other authority or person”.


According to decree No. 12 of 1989 section 125 (1) and decree No. 3 of 1999 section (1), a person holding the office  of the Auditor General under subsection (1) of section 124 of this constitutions shall be removed from office by the governor of the state acting on an address supported by two-third majority of the house of assembly praying that he so be removed for inability to discharge the functions of his office (whether arising) from infirmity of mind or body or any other cause or for misconduct, section 125 (2) of the decree provides that the Auditor General shall not be removed from office before such retiring age as may be prescribed by law save in accordance with the provision of this section.


According to section 1 (13) of financial memoranda, the treasurer is the chief accountant officer and head of financial department of a local government the treasurer as the chief financial adviser to the local government shall be in attendance at executive committee meeting and other committee to provide advice concerning the financial implications of proposed policies, the state of the local government’s finance and financial matters generally. Section 1 (14) of FM stipulates that treasurer will be responsible for ensuring that:

1. There is sheet compliance with the financial memoranda in the financial and other department of the local government.

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2. The accounting system as laid down in the financial memoranda is complied with by all the departments of the local government.

3. All instruction relation to expenditure of public funds by the accounting officers are writing.

4. All accounting officers are made to understand that they are responsible to account to the public accounts committee for monies voted for each local government.

5. All account and other records prescribed by these finance memoranda to be kept by the treasurer, finance and other departments of the local government are properly maintained and kept up to date.

6. All revenues due are collected promptly and paid into local government funds.

7. An accurate account is kept of all monies received and disbursed.

8. All advances are recovered in accordance with the conditions under which granted.

9. No payment are made unless properly authorized and funds are available.

10.     A monthly check of the treasury cash book transactions is carried out by an authorized person other than cashier and a monthly bank reconciliation statement is prepared.

11.     Safeguard, including the arrangements of duties on sound internal check principles are lain down for protection against fraud, embezzlement or irregularity.

12.     All possible steps are taken to prevent waste of local government’s funds or other resources.

13.     Proper provision exists for the safe custody of the local government’s cash and other securities, revenue earning book, store and other physical assets.

14.     Department accounting systems and satisfactory and department accounts and other subsidiary accounts and reconciled monthly with the treasury records.

15.     The annuals estimate annual accounts and all other financial returns and statements required by council and executive committee (including those referred to in the financial memoranda 1.5) are correct and promptly submitted in the due dates in the prescribed manner.

16.     All claims for government grants are correctly prepared and submitted on due date.

17.     The accounts of all revenue collectors are checked as often as possible and in any case at least once in a month.

18.     Queries from Auditor General or internal auditor are promptly acknowledged.

19.     All accounting book record, voucher, cash, securities and stores are produced for inspection, check or audit as at when required by authorized person.

20.     All financial directives of the local government council, executive committee or the chairman to local government are promptly carried out.


Local government is the third tier of government in Nigeria. The primary aim of its establishment is to provide goods and services to the rural populace and to bring government nearer to the people. But this primary aim has not been achieved over the years owing to high rate of corruption. In the local government, the rate of development is still very low despite the enormous financial and material resources that accrue to it monthly from federation account and internal generated revenue.

Since 1996, when the Ebonyi state was created, we have 13, thirteen local governments in the state. But since then, there were no significant development made in the rural areas. Inspite of much amount of revenues atoned to the local government in the state; some are still battling to pay the salaries of the staff of the council, not talking of developments like building new school blocks, staff quarters and road construction at the local government level.

The chairmen of the local government councils are duly elected to provide them with social amenities across the various communities in the local governments, but what they are interested is in their pocket and their immediate families. They forget that the primary aim of local government is to bring government closer to the people, by proving what the people desire from them at any point in time.

Therefore, because of these financial misappropriations in the management of the local government councils, make development very difficult to take place in the rural areas. In view of this, numerous cases of frauds, embezzlement utter waste of public fund and different forms of loss of fund by the local government or state functionaries by diverting resources made for development in the rural area into their private pocket.


According to Adeniji (2004) fraud refers to an intentional act by one or more individual among management, employers or third parties which results in a misrepresentation of financial statement.

Nwabueze (2000) on his defined fraud as irregularies involving the use of criminal deception to obtain an unjust or illegal benefit. Meigs et al defined fraud as a misappropriation by a person of a material fact known by that person to be untrue made reckless indifference as to whether the fact is time with the intention of deceiving the other party and with the result that the other party in injured.


According (2004) fraud may involve  the following:

a.Manipulation, falsification or alteration of record or documents.

b. Misappropriation of assets.

c. Suppression or omission of the effects of transactions frm records or documents.

d.Recording of transaction without substance.

e.Misapplication of accounting policies.


1.  Embezzlement or outright theft or cash by cashier.

2.  Manipulation of cash or other asset.

3.  teeming and lading

4.  Inclusion of unexisting workers (ghost-workers) in the wage sheet.

5.  Snapping of superior assets with inferior type.

6.  Destruction of accounting documents with a view to obtaining the benefit attached there to.

7.  Printing of illegal receipts and local purchasing order with a view to using such to convert the organization benefit to self.

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8.  Inflation of contact.

9.  Theft of solve material or other assets.

10.   Abuse of tending procedure.


1.        POOR INTERNAL CONTROL: Where internal is lacking or through in existence but ineffective, fraud must surely take place.

2.        POOR BOOK KEEPING: Improper book keeping is records will not provide sufficient confidence in its accuracy and as a result will make the owners or manger of business or to ascertain at a glace the true position of its finance.

3.        BAD/INEFFECTIVE MANAGEMENT: Corruption of ineffective management in the field of supervision, control, planning and coordination promotes fraudulent behaviour.

4.        INADEQUATE JOB ROTATION/SEGREGATION OF DUTIES: Where a staff is asked to stay too long on a particular job, it provides and opportunity to commit and cover up fraud.

5.        SOCIO ECONOMIC FACTORS: The society has been indoctrinated in recognizing and worship material things. The get rich of many Nigerians, greed, poverty and the falling standard of giving are some reasons.

Other factors that contribute to fraud are:

a.   Poor salaries and condition of service.

b.   Management attitude to audit queries and follow-up of audit recommendations.

c.   God fatherism or protection of defaulting staff.

d.   Police factors: Slow investigation system, outright corruption (settlement syndrome) and delay in prosecute fraudsters.

e.   Judicial factors: Incessant adjournment of fraud cases until complaint losses interest, disproportionate penalty for fraud etc.


Obasanjo reform anti-corruption crusade have it that before the present democratic dispensation, preceding administration had successively institute legal instruments, measures, and policies designed to combat corruption in the country. Below is the list of laws, decrees and ethical campaigns launched to cleanse social fabric of Nigeria to date.

1.  The criminal code.

2.  The penal code applicable in the North.

3.  The criminal justice (Miscellaneous provision) decree, 1996.

4.  The corruption practices decree 1975 which established the corrupt practices investigation bureau.

5.  President SHedu Shagari ethical revolution.

6.  The war against indiscipline of Buhari/ Idiabon administration.

7.  Mass mobilization for justice self-reliance and economic recovery (MAMSER) by General Babangida.

8.  The code of conduct Bureau and tribunal Act (Cap 56 law of the federation of Nigeria 1990).

9.  The recovery of public property (Special military tribunal act cap, 387, law of federation of Nigeria 1990) as amended in 1991.

10.     The war against indiscipline and corruption of late Gen. Sam Abacha.

11.     The failed banks (recovery of debts and financial mal practices in banks) decree 1994 as amended in 1999.

12.     The recovery of public .property (special military tribunal act Cap 385 law of federation of Nigeria as amended in 1999 by Gen. Abdulsalam Abubakar

13.     Public accounts committee.

14.     Public complaint commission.

15.     Anti-corruption commission

16.     Due process policy

17.     Granting the legislative house the power to investigate the activities of any public officer functionary.


According to Adams (2004:216) the legislative organ that proton the post molten function is the public accounts committee of each house of state and national Assembly/Army forces ruling council (AFRC). It is their duty to consider the Auditor General’s report submitted to the Assembly. The functions of public accounts committee include the following:

1.  To deliberate on Auditor general report.

2.  To summon accounting officers to appear before them

3.  To examine any officer on oat if need be.

4.  To recommend to the president/Governor any action to be taken on the offending officer.

5.  To enforce the audit section as require by decree  43.

6.  To report to the president/Governor their recommendation.


The bill for establishment of corrupt practices and other related offence commission was passed in 2000 by National Assembly as corrupt practice and other related offence Act 2000.

Section 3 of the Act established Independent Corrupt Practices and other related offence Commission (ICPC). I.C.P.C is a body corporate with perpetual succession and a common seal and may sue or be sued in its corporate name. Its members are:  a chairman, two members each from six qeo-political zones.

Independent Corrupt practices and other related offences Commission (I.C.P.C) is not a military tribunal and does not similarly try or jail offender. It is a product of corrupt practices and other related offences Act 2000. It is guided strictly by the provision of the Act in the discharge of its assignment. The bill was passed by National Assembly but they removed some sections considered draconian.

Section 6 (a) (F) of the Act spells out the duties of the commission as follows:

1.  Receiving and investigating complaints from members of the public on allegations of corrupt practices and in appropriate cases, prosecute the offenders.

2.  To examine the practices, systems and procedures of public bodies and where such systems aid corruption, to direct and supervise their review.

3.  To instruct advice and assist any officer agency or parastatals on way by which fraud or corruption may be eliminate or minimized by them.

4.  To advice heads of public bodies of any change in practice, system or procedures compatible with effective discharge of the duties of public bodies to reduce the likehood or incidence of bribery, corruption and related offences.

5.  To educate the public on and against bribery corruption and related offences.

6.  To enlist and foster public support in combating corruption.


The economic and financial crime commission (EFCC) was created in December, 2002 through an Act National Assembly. The commission began operation in April 2003, when its board was inaugurated.

It is charged with following responsibilities

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1.  Investigation of all financial crime such as advance for fraud (other wise known as 419), money fraud, counterfeiting, illegal cash transfer, futures market fraud, fraudulent encashment or fraudulent diversion of funds, contract scam, forgery of financial instruments, issuance of dud cheques, etc.
2.  Co-ordination and enforcement of all economic and financial laws, enforcement, and functions conferred on any other person or authority.
3.  Adoption of measures to identify, freeze, confiscate or  seize proceeds derived from terrorist activities economic and financial crime related offence or the properties, the value of while correspond to such proceeds.
4.  Adoption of measures to eradicate and prevent the commission of economic and financial crimes with a view to identifying individuals, corporate bodies or group involved.
5.  Facilitation and rapid exchange or scientific and technical information and the conduct of operations geared towards the eradication of economic and financial crime.
6.  Determine of the extent of financial loss and such other losses by government, private individual or organizations.
7.  Collaboration with government bodies within and outside Nigeria in carry out its functions wholly or in part analogous with those of the commission.

EFCC also empowered to enforce the following laws.

1.  Money laundering Act. 1995.
2.  The advance free fraud and other relates Act. 1995.
3.  The failed bank (Recovery of debt) and financial mal practices in bank Act. 1994 as amended.
4.  The bank and other financial institution Act, as amended
5.  Miscellaneous offences Act (Cap. 410 LFN).
6.  Any other law or regulation related to economic and financial crime.


The manual on public procurement reform programme Nigeria page 1, have in that due process is a mechanism for ensuring strict compliance with openness, competition and cost accuracy rules and procedures that should guide contract award with the federal government of Nigeria. It has become the popularly adopted short form for budget monitoring and price intelligent unit (BMPIU).

This is the unit tasked with implementing Nigeria’s public procurement reform programme.

The budget monitoring and price intelligence unit was established by President Obasanjo in 2011 in fulfillment of his tenacious commitment to ensuring transparency and accountability in the management or on public resources.

It was established because of diagnostic study conducted in 2001 into the state of the federal government public procurement which revealed that Nigeria may have lost several hundreds of billions of Nigeria over the last decades. These losses arose as a result of flagrant abuse of procedures for award of public contracts, inflation of contract cost, and lack of transparency, lack of competence based competition and lack of merit as a fundamental criteria for award of public contracts.


Regulate and set standards enforce harmonized bidding and tender documents for all federal government contracts.
Formulate government policies and on public sector procurements.
Develop, update, and maintain relevant system world wide data base and technology.
Uphold professional ethnics and reordering procurement personnel, public officials, departments and private sector companies and their personnel to relevant authorities for appropriate sanctions.
Monitor price of tendered items and provide price data base adversary service to public sector.
Perform procurement audits.
Document and monitor federal government projects from points of award until completion.
co-ordinate training to promote capacity building of procurement personnel and develop systems and standards in the public sector.
Sensitive promote and educate the public on procurement issues.
Advise the president on the status of federal government procurement in relation to the annual appropriation.
Provide relevant procurement and budget performance information to interested parties and institutions.

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The Role of the Auditor General for Local Government

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