115 MDAs have up to date financial statements – FRC

Philip Clement, Abuja

The Financial Reporting Council of Nigeria (FRCN) says that a total of 115 agencies and departments of government have so far filed their financial statements with the agency.

Executive Secretary of the Council, Shuaibu Adamu Ahmed, stated this at 2-day national learning and development programme on accounting and financial reporting in the public sector on Tuesday, in Abuja

He said: “So far between the end of 2020 and 2021 to date, a total of 115 Public Sector Entities comprising of Government Parastatals, Government Agencies, and Government Business Entities have filed their Annual Financial Statements with the FRC. This is a very significant progress. For those who have not filed, we have begun imposing fines and penalties on them in line with the provisions of the FRC Act and its extant rules”.

While underscoring the relevance of the public sector, the ES stated that Public Sector Entities play a pivotal role in the national economy as a major driver of productive activities and the largest single business entity.

“As a bedrock of the economy, the importance of financial reporting quality in the national economy cannot be over emphasized. Credible financial reports are no doubt germane as they not only support efficient decision making by those charged with governance but also boost the perception index of the country and by extension, enhancing Foreign Direct Investments (FDIs) and Foreign Portfolio Investments (FPIs) as veritable tools and catalysts for the nation’s economic growth.

“Public Sector Entities are expected to provide financial information that are not only timely but are accurate and useful for decision making and most importantly germane to evaluating the government performance as a bastion of public accountability and stewardship,”

The ES however frowned at some key agencies of government who are yet to submit their financial statements for some years now.

He said: “A situation where critical institutions of Government, some of them apex regulatory bodies, are 2 to 3 years behind in releasing their audited FSs should not and will no longer be tolerated going forward.

I want to therefore call on the National Assembly to make it a rule that the budget proposals of Public Sector Entities in default of filling their AFS of the previous year would not be considered and approved for the coming year.

“We at the FRC have resolved to set good example by ensuring that our 2021 AFSs are prepared, audited and filed within 2 months after end of the 2021 Financial Year.

“We must all collectively work together to raise the standard of Financial Reporting in the Public Sector in Nigeria. One of the best ways of doing this is strict implementation of the International Public Sector Accounting Standards (IPSAs) by all MDAs.

IPSAS are a series of Financial Reporting & Accounting Standards issued by the International Public Sector Accounting Standards Board, which represents more than 160 member bodies in 120 countries”.

Earlier in his address, Minister of Industry, Trade and Investment, Otunba Niyi Adebayo, said a major challenge in financial reporting by public sector entities is poor knowledge of and application of these accounting standards.

He added that for a public sector entity to keep proper accounts, full professional knowledge of these standards is a basic requirement.

The minister, who was represented by his technical adviser, Kamar Bakrin, said the programme is essential for government agencies and commended both FRC and the Office of the Accountant General of the Federation for the creation of the forum.

“I have been informed that the Financial Reporting Council of Nigeria has carried out a review of some of the financial statements filed with them by a number of public sector entities and a lot has been revealed.

It has been observed that there is lack of proper understanding of the requirements for credible financial reporting in the public sector. Some public sector entities still use the Statement of Accounting Standards (SAS) issued by the defunct Nigerian Accounting Standards Board (NASB) as their reporting framework while others use a number of other formats. This lack of uniformity hinders credible financial reporting and makes comparability difficult

“This capacity-building program as FRC’s contribution to Nigeria’s economic development. Since the advent of the Covid-19 pandemic, Nigeria has had to dramatically reduce all non-essential spending.

The assurance of sound and accurate financial reporting will go a long way in ensuring government funds are appropriately utilized. It is also essential in increasing public confidence in government and helping to attract investment into public-private partnerships,” he added.

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