The Office of the Auditor-General for the Federation (OAuGF) and the Federal Ministry of Finance Budget and National Planning have signed a Letter of Understanding (LoU) singalling the formal launching of the State Fiscal Transparency, Accountability and Sustainability (SFTAS) programme.
The SFTAS is a $750m programme of the Federal Government to reward states for meeting any or all of nine indicators that demonstrate improvements in Fiscal Transparency, Accountability and Sustainability.
The programme’s nine indicators are an offshoot of the previous Fiscal Sustainability Plan of the Federal Government where states are to be rewarded for meeting up to 22 targets.
The World Bank has supported the Federal Government to incentivize the states to properly achieve the 22 point Fiscal Sustainability Plan (FSP), now re-designed as the nine Disbursement Linked Indicators (DLIs) under SFTAS.
The OAuGF is the Independent Verification Agent (IVA) for SFTAS and will conduct the annual performance assessments of the States, as well as deliver capacity building activities to state audit offices, while the Home Finance Department (HFD) in the Federal Ministry of Finance (FMOF), will house the Program Coordination Unit (PCU) of the programme.
In his brief remarks during the LoU signing ceremony, the Auditor-General for the Federation, Mr. Anthony Mkpe Ayine, urged all participating states to ensure that all the necessary information for the assessment were supplied on or before the first date of the team visit, in order to meet up with the timelines for the Annual Performance Appraisals (APAs).
He said: “We are mindful that the integrity of the SFTAS programme and of the IVA is paramount, and we appeal to all States to play fair. Our team members have been provided with all they need and are being well compensated. We urge all states not to offer any gifts, inducements or similar to any of our team members. They have been put on alert and instructed to reports any such offers.
“We also request that each State takes charge of the team security from the date of their arrival, all through their movements in the State, and until they have been safely received by the next State”, the audit expert added.
The National Programme Coordinator for SFTAS at the Finance Ministry, who was represented by his deputy, Bello Abdulmajeed, said the desire of the team was to ensure that the outcomes are in line with the objectives of the programme and expressed confidence that the OAuGF will deliver on its assigned responsibilities.
He explained: “We have a lot of confidence in the Supreme Audit Institution that we are going to achieve all our objectives. We have timelines and I would want all of us to strive to meet with those timelines which we have jointly agreed on.”
Abdulmajeed also called for the prompt disbursement of funds to states who have met the criteria in the first year, as qualified states were already mounting pressure for the release of these monies.
To be eligible for this grant, states will need to publish on a timely basis their approved annual budgets and annual audited financial statements, for each year of the programme.
In addition, the sub-national governments are also required to align the preparation of their annual budgets with international best practices as well as ensure that their audited financial statements are prepared in accordance with accepted standards.
This means that states are to publish on their websites, their audited financial statements for 2017 by the 31st of December 2018, as well as their 2019 budget by 28 February 2019, and 24 out of 36 states that meet both criteria will be able to receive disbursements if they meet any of the DLIs.
The remaining 12 states will also be assessed, but are not eligible for grants in this first year. However, their assessment reports will help them prepare better for subsequent years.
The assessment of eligibility for the second year of SFTAS (2019) has commenced with 30 September 2019 being the deadline by which states were to publish online their financial statements for the year 2018. 33 States were found to have met that criteria. The exercise will be concluded early in 2020 going by the second deadline of 31 January 2020 for States to publish their 2020 Budgets online.
The SFTAS programme is part of efforts of the Federal Government to further enhance the transparency and accountability in the use of public resources through the implementation of the Open Government Partnership (OGP) which Nigeria signed to in July 2016, and will cover the fiscal performance of states between 2018-2021.