The Financial Reporting Council has warned government entities that have not filed their audited financial statements to do so as the Council had begun imposing fines and penalties on them in line with the provisions of the FRC Act and its extant rules .
It said between the end of 2020 and October 25 this year, 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 Financial Reporting Council of Nigeria.
The Executive Secretary of the FRC, Shuaibu Ahmed, gave the figure on Tuesday in Abuja at the opening session of a national learning and development programme on accounting and financial reporting in the public sector.
He lamented that based on the review of these audited financial statements filed with the FRC, financial reporting in the public sector is fraught with challenges and issues to which the learning programme is designed to address.
He said, “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.
“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.”
He stated that Public Sector Entities are expected to provide financial information that are not only timely, but are accurate and useful to evaluating government performance as a bastion of public accountability and stewardship.
He called 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 should not be considered and approved for the coming year.
Ahmed added, “Let me use this opportunity to stress the importance of timely preparation, audit and filling of AFS and also warn against unnecessary delay in this respect.
“A situation where critical institutions of Government, some of them apex regulatory bodies, are 2 to 3 years behind in releasing their audited financial statements 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 AFS are prepared, audited and filed within 2 months after end of the 2021 Financial Year.”
The Minister of Industry Trade and Investment Mr Niyi Adebayo, said a major challenge of financial reporting by public sector entities is the poor knowledge and application of accounting standards.
For a public sector entity to keep proper accounts, he said full professional knowledge of the International Public Sector Accounting Standards is a basic requirement.
He said, “This program 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.