Support to Nigeria’s Supreme Audit Institution
Title: Support to Nigeria’s Supreme Audit Institution - Building the capacity of the Nigerian OAuGF in conducting IT and Revenue Audits.
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Overall term: 2018 to 2020
With a tax-to-GDP ratio of 6 per cent, Nigeria is well below the African average of around 15 per cent. Fluctuating revenues from the extractive sector, which the country is highly dependent upon, worsen the situation. The revenue potential in Nigeria, therefore, is far from exhausted. Rather, insufficient mobilisation of domestic revenues severely restricts the financing of public services. There is therefore increased pressure to optimise revenue collection.
Auditing government revenue collection increases the efficiency and effectiveness of public financial management. More effective revenue collection systems will allow the Nigerian government to increase its tax-to-GDP ratio. This ultimately means that more resources will be available for public services and infrastructure development. In addition, the skills acquired to audit IT-systems on the revenue side can also be used to audit IT-systems used for public expenditure. Enhanced efficiency on the expenditure side means better value-for-money for citizens. The programme therefore indirectly contributes to the achievement of all Sustainable Development Goals (SDGs) that would benefit from more effective public financial management. In particular, a contribution is made to SDG 16.6, which aims at ‘developing effective, accountable and transparent institutions at all levels’ and SDG 17.1, which targets ‘increased domestic revenue mobilisation’. The programme benefits women and men equally.
The capacity of the Nigerian Office of the Auditor-General for the Federation (OAuGF) in conducting IT and revenue audits has been strengthened.
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH supports the OAuGF in the development and implementation of an IT Audit strategy, thus making the office ready to meet increased automation in Nigeria’s public finance processes, and consequently improve the quality of the auditing of government revenue and expenditure.
To achieve this, a senior national expert has been placed in the Office of the Auditor General to provide technical assistance in the planning, fieldwork and reporting phases of IT audit engagements. This should ultimately improve the reliability of IT audit assets and environment in Ministries, Departments and Agencies (MDAs), thus contributing to an increase in the functioning and effectiveness of the OAuGFs’ work. In addition, short-term experts deliver revenue and IT audit related trainings. A study tour will be organised to give the management of the IT audit department an opportunity to understand the functioning of more mature audit institutions and learn from their experiences in setting up IT-audit structures and processes.
The final product of the support measure will be an audit report meeting international audit standards as set by the International Organization of Supreme Audit Institutions, INTOSAI. The report will be communicated to the National Assembly to improve the national accountability process.
The project will also document all steps of the IT-audit process and create sustainable structures to institutionally anchor the learning by establishing clear responsibilities and processes. One step towards this is the creation and adoption of a dedicated IT Audit Unit and Strategy document. This will ensure that acquired knowledge is sustained after finalisation of the project. To support this, several trainings have been conducted.
The project is linked to the regional programme Good Financial Governance in Africa, which is based in Pretoria, South Africa.
- A specialised IT audit unit has been constituted
- An IT audit strategy has been adopted
- 20 Auditors trained on IT Audit, Applications Control and the Audit Process
- 35 Auditors trained on Tax, Risk Based Audit and Revenue