By Felix Khanoba
The Financial Reporting Council (FRC) has read the riot act to Federal Government’s agencies and parastatals that have refused to file their Annual Financial Statement (AFS) as required by the law.
The Council said it would to continue to wield the big stick on such defaulting agencies as necessary fines would be imposed on them.
Executive Secretary of FRC, Ambassador Shuaibu Adamu, made this known at the opening ceremony of a two-day National Learning and Development Programme on Accounting and Financial Reporting in the Public Sector on Tuesday in Abuja.
He, however, expressed delight that about 115 government entities filed in AFS to the Council within the last one year.
He said : “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.
“Our experience from the review of this AFS filed with us show that financial reporting in the public sector is confronted with challenges and issues to which this programme is designed to address.
“Our various engagements with the National Assembly further expose the lingering issues of late submission of financial reports by MDAs, lack of proper treatments of accounting issues, poor disclosures, etc. ”
Speaking further, the FRC boss said that the “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 overemphasized.
“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 is not only timely but is accurate and useful for decision making and most importantly germane to evaluating the government performance as a bastion of public accountability and stewardship.
“Let me use this opportunity to stress the importance of timely preparation, audit and filing of AFS and also warn against unnecessary delay in this respect.
“A situation where critical institutions of government, some of the 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 filing their AFS of the previous year would not be considered and approved for the coming year, ” he stated.
On his part, the Minister of Industry, Trade and Investment, Otunba Niyi Adebayo, said a major challenge of financial reporting by public sector entities is the poor knowledge and application of accounting standards.
Represented by his Technical Adviser, Mr Kamar Bakrin, the minister said: “This programme is therefore essential for government agencies and I commend both FRC and the Office of the Accountant General of The Federation for the creation of this 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,” he said.
He described the capacity-building programme as FRC’s contribution to Nigeria’s economic development.
Also speaking at the event, the Accountant General of the Federation, Alhaji Ahmed Idris, said that the training, was aimed at deeping the knowledge of operators in MDAs and building capacity for better financial reporting.
Alhaji Idris, who was represented by the Director Consolidated Account Depertment, Mr Zubairu Salau, stated that it was hoped that at the end of the programme, participants would be equipped with the relevant skill to discharge their duties professionally.