How Akwa Ibom is Improving Fiscal Transparency, Utilising Public Resources Responsibly

There is synergy, coordination and commitment by policy makers in the finance sector. Their focus is to build on the gains of the SFTAS programme, particularly strengthening institutional and operational framework that will enhance fiscal transparency and accountability

Akwa Ibom State is keen and showing committed self-effort to remain atop the subnational audit efficacy index, a civic-space driven, evidence-based assessment which seeks to know whether public resources are responsibly and effectively managed to achieve intended results.

In 2022, Akwa Ibom came first in the subnational audit efficacy ranking, the same year the United States Consul General in Nigeria, Mr. Will Stevens, lauded the state government for being 'one of US' first partners in Africa to improve fiscal transparency, and leading other states in Nigeria in creating its own public finance plan.'

The new administration led by Pastor Umo Eno, is avid to sustain fiscal reforms which placed the state as number one in the subnational audit efficacy index. It is applying strict budgetary discipline and upholding financial regulations which prescribe various approval limits for officers of government, starting with the Governor.

The state financial regulation which benchmarks approval thresholds for the Governor, the Finance and General Purpose Committee (FGPC), and Ministries, Departments and Agencies (MDAs), is conscientiously applied in the state. In August 2023 before the constitution of the FGPC, Governor Eno said he could not start major projects because they were beyond his approval limits.

"We will flag-off some road projects soon. Why we did not do it before was because the amount was more than what I could have approved solely as Governor. I am a very procedural person. We needed to put Exco in place and we needed to constitute the FGPC so the amount will go first to the FGPC to get the approval before the award of contract for the projects.

"I know people were watching. If you award before doing those things, the House of Assembly will come after you. So I am also careful," the Governor said on August 19, 2023, during the Government House prayer meeting held at Latter House Chapel.

The state Accountant General, Pastor Uwem Andrew-Essien, said no expenditure can be made without a vote.

"If a project does not have a vote of charge in the budget, you can't get money anywhere." This signposts a very strict commitment to fiscal discipline.

Civil society organisations working within Nigeria's fiscal space say many policy actors are not keen about sustaining fiscal reforms since the World Bank-Assisted States Fiscal Transparency Accountability and Sustainability (SFTAS) programme ended in 2022.

Paradigm Leadership Support Initiative (PLSI), a civic-tech organisation working to foster public accountability through citizens' engagement with public audit system said it observed obvious decline in average score in the 2023 Subnational Audit Efficacy (SAE) Index. The organisation in a report released last month observed a roll back or stagnation of results achieved through the SFTAS initiative.

"It is evident that many policy actors at subnational level are uninterested in sustaining reforms achieved through the SFTAS programme given the cessation of monetary incentives aiding such reforms thereby impeding prospects for good governance, development and improved quality of life for citizens," the report funded by MacArthur Foundation stated.

The total average score in the SAE index for 2023 was 30.58 per cent against 31.81 per cent in 2022, indicating a 1.23 per cent decline. PLSI founded in 2016, runs on donor support from Open Knowledge Foundation, The British Council, European Union, MacArthur Foundation, Open Society Initiative for West Africa (OSIWA) with partnership from civic organisations including BudgIT, Connected Development (CODE), Socio -Economic Rights and Accountability Project, SERAP, etc.

The subnational audit efficacy index assesses the level of transparency and accountability operational in management of public funds, and implementation of public policies in the 36 states through public audit and key actors in the public audit action cycle.

The assessment covers eight priority areas - audit legal framework and operationalisation, submission of annual activity report, publication of audit documents, implementation of House of Assembly resolutions on audit recommendations, evidence of performance audit, availability of citizens' accountability report, effectiveness of public accounts committee, and civil society/media participation in the audit process.

Akwa Ibom State scored 60 per cent in the 2023 SAE assessment benchmarked on the 2022 financial statements and audited account. Ekiti and Yobe states topped the charts with 73 per cent, while Lagos ranked 36th with five per cent.

Four out of the 36 states scored above 50 per cent in the latest ranking unveiled on Thursday 14th March at the Musa Yar'Adua Centre, Abuja, during the SAE award ceremony chaired by Governor AbdulRahman AbdulRazaq of Kwara State and Chairman Nigeria Governors Forum. Highlight of 2023 assessment sheet shows that Akwa Ibom scored 100 in citizens' accountability report and effectiveness of its public accounts committee. It also scored high on CSO/media participation in the audit process. The state's mean score stands at 71.25 per cent in the four years SAE performance trend published by the organisation.

Reacting to the report, leader of the finance sector and Commissioner for Finance, Akwa Ibom State, Linus Nkan, PhD, said the ranking spotlights the efficiency of the public finance management system achieved over the years.

"It is a great testament to the effectiveness and efficiency we have achieved over the years in our public financial management, the innovations and fiscal reforms we have undertaken, and the huge investments the state government has made to enhance the capacity of personnel involved in financial management in our state."

"We have very strict budget discipline and financial regulations, everyone spends within the approved items on the budget for that financial year and approval threshold. The mechanisms to ensure transparency and accountability are upheld throughout the system at various levels of budget execution," Nkan said.

The state has leveraged on the reforms birthed under the SFTAS programme to improve citizens' participation in budget, enhance standard bookkeeping and preparation of financial statements and strengthen its audit processes and institutions.

The Finance Commissioner said the "World Bank SFTAS programme contributed significantly to the reforms we have in the financial management system in Nigeria. In our state, the programme helped to modify our system towards efficiency, effectiveness, transparency in the financial management system specifically improving citizens' participation in our budget, strengthening our procurement process and sharpening our skills in the preparation of financial statements otherwise called final account."

From running a Treasury Single Account (TSA), the state has automated its accounting process. Phasing out use of manual files and the concomitant reduction in audit queries as well as maintenance of asset register were significant outcomes of reforms by the Office of the Accountant General spotlighted in the 2022 audited accounts of the state published online.

On page 4 of the report, the Auditor General, Mr. Isaiah Ntekim, observed that "the standard bookkeeping was noted to have improved remarkably over previous years. This was attributed to the introduction of IPSAS-Accrual." IPSAS-Accrual is an asset and liability accounting template opposed to the cash-basis system. Akwa Ibom and only a few states use the IPSAS-Accrual template which is novel to the public sector in preparing their annual report.

Steps are taken to ensure full implementation of the Akwa Ibom State Audit Law 2021 (amended) especially independence and autonomy of the Auditor General to carry out audit investigations on account of any person held at any bank if (he) has reason to believe that the monies held in such an account are public funds which had been fraudulently or wrongly paid into such account. Other provisions to be implemented including setting up of state audit commission, and audit committees in MDAs.

There is synergy, coordination and commitment by policy makers in the finance sector. Their focus is to build on the gains of the SFTAS programme, particularly strengthening institutional and operational framework that will enhance fiscal transparency and accountability.

The state has partnered the United States Agency for International Development, USAID, State2State programme for technical support. More than 500 workers in the state including members and select staff of the House of Assembly have been trained on public finance management.

The latest training for members of the House of Assembly held last month at Four Points by Sheraton Hotel, Ikot Ekpene, was on quarterly budget performance evaluation. The trainings are periodic, cut across economic and social sectors, "have greatly enhanced performance and productivity of staff within the finance sector", Commissioner for Finance said.

The target is ensuring the entire process of financial management in the state is dominated by people with sufficient knowledge and technical capacity to sustain benefits of the fiscal reforms while deepening citizens' participation in the public financial management processes.