The federal government has authorised an independent financial audit of the 35 state governments which accessed its N510 billion Budget Support Facility (BSF) in June last year.
Already, eight reputable accounting firms including KPMG, Ernst and Young and PWC, had been appointed to undertake an independent review of states’ financial management positions.
Importantly, the auditors are required to monitor and evaluate the implementation of the 22-point Fiscal Sustainability Plan (FSP) which was the precondition for accessing the intervention by the benefiting states.
Though the Federal Ministry of Finance had been monitoring compliance to the agreement since June 2016, the independent monitoring and verification of the states involved in the bailout programme will now be undertaken by the selected accounting firms.
The BSF is a 12-month standby loan facility designed to bring immediate financial relief to state governments and enable them meet their financial obligations with a monthly amount of N50 billion in the first three months and N40 billion available for the remaining nine months to beneficiaries.
The Minister of Finance, Mrs. Kemi Adeosun, had, while announcing the appointment of the accounting and audit firms, charged them to “vigorously monitor, evaluate and verify the performance of the states against the agreed milestones set by each state government under the FSP.”
State governments that fail to implement the action plans, as stated, would be taken off the facility with immediate effect.
The FSP was introduced for Sub-national governments in 2016 with the view to enhancing fiscal prudence and transparency in public expenditure.
The plan is part of the nationwide Public Financial Management Reform which is being implemented by the administration of President Muhammadu Buhari through the Federal Ministry of Finance.