Procurement audit: Panacea for infrastructural deficits in Nigeria

 

(By Emejuiwe Victor)

The reason for infrastructural deficit in Nigeria is not in the appropriation of funds but it is in the utilisation of such funds. It has a lot to do with the performance management of project. Several billions of Naira has been allocated for projects in works, housing, transportation, agriculture, health etc. but the problem is that, the performance of these projects cannot be measured with the expected outcome

NIGERIA currently grapples with infrastructural deficit despite the huge commitment of funds deployed annually to provide infrastructural facilities across the country. The present administration through the Ministry of National Planning Commission had recently announced a long-term plan to address the gaps. Known as National Integrated Infrastructure Master Plan (NIIMP), it is a 30-year plan for accelerating infrastructure development in the country. It focuses on core infrastructure, including energy (power and oil & gas), transport (roads, rail, ports and airports), housing, water and ICT.

    Other areas of interest include agriculture, mining, social infrastructure, vital registration and security.  To fill the infrastructural gap, the sum of $2.9 trillion will be required over the 30 years period. Nigerians suffer both social and economic loss because of the infrastructural gaps. A study on road sector performance (2009-2013) carried out by the Center for Social Justice cited the CBN report which states that the annual loss recorded from bad roads in Nigeria is estimated at N80 billion. The motorist plying the roads also suffers vehicle operation costs of N53 billion due to bad roads.  These losses include travel time and man hour loss, including perishable goods. The infrastructural deficit also affects the housing sector, with about 17.5 million houses needed to be completed with N55.5 trillion. The scenario cuts across provision for modern facilities in agriculture, health, education etc.

   We may be pushed to ask, does it mean that the government has not been allocating funds to these sectors over the years? The reason for infrastructural deficit in Nigeria is not in the appropriation of funds but it is in the utilisation of such funds. It has a lot to do with the performance management of project. Several billions of Naira has been allocated for projects in works, housing, transportation, agriculture, health etc. but the problem is that, the performance of these projects cannot be measured with the expected outcome.

  The expected outcome in any project is measured in terms of cost, durability, quality, timeliness and fitness for purpose. To achieve this, the procurement process must mainstream a performance management benchmarking in the entire circle of the project. The PMB is a control measure that is required in every project to monitor the performance stages and outcome of a project; this will help to determine if the project is meeting up with the required expectation. The PMB is made up of key performance indicators, process performance reviews, trend analysis and project evaluation. From the conception of a project, the expectation must be creatively analysed and measured with a performance management benchmark. This initiative is lacking in most government contracts; as a result, the turnout of most projects in Nigeria does not meet the desired expectations.

  On a field monitoring exercise conducted by the civil societies, it is discovered that the major reason for project delays is as a result of project variations. This variation involves the re-scoping of original project design to accommodate “on-the-site” realities. In most cases, before contracts are awarded to contractors, factors such as the ecological and environmental conditions, climate changes, soil textures, availability of raw materials etc., were not carried out; thus when discovered, contracts are reviewed to accommodate those changes; thereby, affecting the cost of the project and the period of delivery. Some of the additional costs that have been incurred from project variations could have been saved and deployed to other infrastructural projects, by so doing, the huge gap in the infrastructural deficit would be minimised. The panacea to this problem is to inculcate procurement audit in the procurement process of all government contract.

  Procurement audit simply means the investigation of the entire procurement process from the planning, execution and conclusion of the project. Procurement audit is done by an independent auditor, who must be a procurement specialist.  The major objective of a procurement specialist is to save money for an organisation and also to ensure that the organisation procurement meets the required timeline, quality and quantity. Section 5(p) of the Public Procurement Act gives the Bureau the powers to conduct procurement audit and to submit the report to the National Assembly.   However, the type of procurement audit conducted by the Bureau is procedural audits. According to the Chartered Institute for Purchasing and Supply, procedural audits are the type of audit that is performed periodically (at specific intervals). It could be bi-annual, annually, quarterly or monthly.  This form of audit has been the standard practice, but there is need for the Bureau to guide against the regular wastage and mismanagement of public funds in the MDAs, by engaging independent auditors to start the procurement process with the MDAs. To achieve this, the Bureau needs to adopt a comprehensive public procurement audit. The comprehensive public procurement audit is the type that is conducted to cover every aspect of procurement proceedings ranging from planning, implementation, payments, conclusion and also beneficiary impact analysis.

   This suggestion is necessary due to the sharp practices that are constantly perpetrated by the MDA’s and contractors.  In terms of compliance with the Public Procurement Act, the MDAs do comply with most of the provisions of the Act but the general level of effectiveness is very low. From investigation, due to lack of independent auditor following the procurement process in the MDAs, it is difficult to really track cases where contracts are awarded to entities owned or sponsored by the MDAs. Diversion of funds and poor project outcomes are perpetrated by MDAs and its suppliers who share some related interest. It is a known fact that most senior officers in the MDAs float their own companies with which they bid thereby having first hand privilege information to meet the criteria in the tender document.

    Using this scenario to adjudge the procurement audit function of the BPP, Section 5(h)  provides that the Bureau can; “call for such information, documents, records and reports in respect of any aspect of any procurement proceeding where a breach, wrongdoing, default, mismanagement and or collusion has been alleged, reported or proved against a procuring entity or service provider.” This is the usual approach adopted by procurement auditors but they are counterproductive because MDAs are clever enough to keep clean records of all procurement proceedings. The MDA’s invite observers in all bid openings, but the PPA did not mandate the observers to evaluate the bid with the MDAs. In essence, the role of the observers stops at the observation stage, whether or not the MDAs award the bid to the best responsive bidder, it is not known to the observer.

    The rot of corruption and mismanagement of funds in the government ministries is an age long defects that requires the sincere efforts of all stakeholders to cure. The funding gap required to meet infrastructural deficit can be realised if, we first of all, manage the resources we have effectively. All government agencies engage in procurement and 90 per cent of corruption in Nigeria takes place from the procurement of goods, works and services. Therefore, the Federal Government can plug the financial leakages in government, by taking a bold step to ensure that goods, works and services are procured and provided at the right price, quality, and quantity and provided at the right time. This feat can be achieved if the Bureau of Public Procurement liaises with relevant bodies or institution such as the Chartered Institute for Purchasing and Supply Management of Nigeria, to assist the Bureau in the audit of procurement proceedings in the MDAs. As a mandate, the Institute is obliged to provide professional assistance to procuring entities, with an independent professional opinion that is reliable and unbiased. It is also empowered to sanction any of its members who must have erred in carrying out its duty. This creates a safe ground for the BPP to collaborate with the CISPMN in ensuring a corrupt free procurement practice in Nigeria.

• Emejuiwe wrote from the Centre for Social Justice, Abuja.

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