Monday, March 4, 2013

INEC’s 2011 Audit Report on Political Parties

On Friday, February 15, 2013, Nigeria’s Independent National Electoral Commission officially published the 2011 audit report on political parties in three national newspapers in accordance with section 89(4) of Electoral Act 2010 (as amended). The audit was done in strict conformity with section 226 (1) of the 1999 Constitution (as amended). The section says “The Independent National Electoral Commission, shall in every year prepare and submit to the National Assembly  a report on the accounts and balance sheet of every political party. Kudos to INEC

The 2011 audit report which covers 56 registered political parties indicted 54 of the parties for being in breach of the provisions of the Electoral Act, which stipulate modalities for the running of parties, including details of their earnings and expenditures. Auditors’ comments and observations on most of the political parties were that they did not have an audited internal financial statement for the year 2011; they lacked conventional books of accounts and did not maintain fixed assets and membership registers. They were also accused of not having internal control procedures while budgets for the year were not duly implemented. The control implications, in the opinion of the auditors, were that poor account record of financial transactions can lead to delay in obtaining financial information which can affect proper understanding and appreciation for the accounting position and performance of the party thereby making the tracing of fixed assets too difficult and the movement difficult to determine. The auditors surmised, among other things, that “non-existent of the internal control system leads to mismanagement and misappropriation of funds and lack of budgeting may equally lead to difficulty in management operation and efficiency.”

The general recommendations for most of the defaulting political parties was for them to endeavor to write up all their relevant books of account from where their statements can be extracted as well as to have an effective internal control system and a comprehensive membership and assets registers.

 The most disheartening news about the audit report is that even the so called big political parties with elected members in the executive and legislative positions were in breach of standard accounting and audit processes. INEC auditors however have commendations for the Action Congress of Nigeria (ACN) and the Citizens Popular Party (CPP). The auditors said of ACN that “The Party has an internal Audited Report and Account for the year under review. Conventional books of Account were maintained. Budget and Budgetary Control were in place and the party have a well-defined fixed assets register and membership register were equally in place….” A similar positive observation was made of the Citizens Popular Party. It is noteworthy that CPP was one of the two political parties that received INEC auditor’s praise on the 2010 audit report released to the public on April 1, 2012.

It is very heart-rending that majority of political parties performed woefully in terms of keeping proper books of accounts and financial controls. More so, the audited report was on an election year when a lot of resources were spent during the electioneering period. It would seem that the political parties do not either have the technical competence or financial resources to maintain or hire competent hands to handle their party accounts. They may as well be doing this out of mischief.