The Challenges of Public Sector Audit as an Effective Accountability Tool in PPP Arrangements in Nigeria. By S. C Okaro and Gloria Ogochukwu Okafor (Mrs). Both of Department of Accountancy, Nnamdi Azikiwe University, Awka. E Mail: firstname.lastname@example.org. E Mail:email@example.com Contact Author: S.C Okaro Contact E Mail: firstname.lastname@example.org Abstract The Purpose of this study is to explore some of the challenges constraining public sector audit from acting as an effective accountability tool in PPP arrangements in Nigeria and to proffer solutions. This is a conceptual paper and relies on extensive review of literature. We find, among others, that inadequate independence of the supreme audit institution, poor accounting environment, lack of executive capacity, the unsatisfactory performance of PAC, poor use of technology pose serious challenges facing public sector audit as an effective accountability tool in PPP arrangements in Nigeria. Some of our recommendations include the strengthening of the independence of the supreme audit institution, bestirring the PAC to be alive to its responsibilities and improving the accounting environment. Key Words: Audit, PPP, Auditor-general, Challenges, Accountability, Public sector, Effective Tool. Introduction An audit is an independent examination of the financial statements of an organization with a view to forming an opinion as to the truth and fairness of the statements. Audits everywhere are undertaken to lend credibility to financial statements for use of people other than those who prepared them. Governments faced by massive infrastructural challenges and lacking the necessary finance to execute the projects are increasingly turning their attention to PPP arrangements to make hay. A PPP arrangement refers to contractual agreement formed between a public agency and private sector entity that allow for greater private sector participation in the provision of a public service. The overall goal of PPP includes acceleration of economic growth and sustainable development (Emecheta, 2011). The driving force in such arrangements is value for money. Although there is greater private sector involvement in PPP arrangements, government is not thereby absolved of accountability for the success or failure of the PPP Project. Financial accountability is exerted through the report of the Auditor- General (AG) to the Public Account committee of the National Assembly. Lessons learnt from such reports guide future actions and thus better safeguard the Public interest. Many countries routinely audit the accounts of PPP projects (ex post) through their national audit offices ( Examples in this regard include U.K., India, South Africa, Australia and Newzealand. Findings from such audits usually guide future action of the various governments in addition to helping the concessionaires improve on their performances. In Nigeria, the PPP phenomenon is a recent one. The Infrastructural regulatory commission was only empanelled by an Act of 2005 while the PPP unit came on board only in 2009. The Infrastructure concession regulatory commission (ICRC) is empowered, among other things, to take custody of every concession agreement entered into by the Federal Government and ensure efficient execution. Even then bitter lessons have been learnt from the few projects that have been undertaken under this novel and increasingly popular arrangement. The following have been fingered as some of the problems of PPP management in Nigeria: Inadequate experience in the public and private sectors Not enough due diligence Political involvement at the implementation level Project preparation not thorough Procurement not competitive(Ahmed 2011)
Electronic copy available at: http://ssrn.com/abstract=1970070
This has prompted some Nigerians to believe that the PPP option is not working (Editor 2011). This is an indictment of the watch dog institutions that have the responsibility of ensuring public...
Please join StudyMode to read the full document