Audit Report reveals systemic financial irregularities across state ministries, agencies
Audit Report reveals systemic financial irregularities across state ministries, agencies
An in-depth audit review has exposed widespread financial irregularities across several Kano State ministries, a state-owned company, and senior management personnel, raising serious concerns about weak internal controls, non-compliance with statutory regulations, and poor record-keeping practices in the administration of public funds.
The audit report examined Kano’s financial statement as of December 31st, 2024.
The findings, outlined in official audit correspondence and financial reviews, detail infractions ranging from failure to deduct statutory taxes, unretired expenditures, and undocumented foreign travel to underreporting of turnover, overstated income, and deficiencies in governance and financial management.
Ministry of Transportation
Congratulations, Hajiya Salamatu-Wofan
Auditors observed that the Ministry of Transportation failed to deduct the statutory taxes amounting to ₦12,202,202 from a payment of ₦81,348,000 made to a contractor. Specifically, the Ministry omitted both 7.5 percent Value Added Tax (VAT) and 7.5 percent Withholding Tax (WHT), actions that contravene Sections 2, 8, 26, and 29 of the Federal Inland Revenue Service (Establishment) Act, 2007.
The issue was formally communicated to the Commissioner for Transportation through correspondence dated February 6, 2025, referenced AUD/PMA/MFHHE/1/38. At the time of the audit report, no response had been received, leaving questions about compliance with statutory tax obligations unanswered.
Ministry for Higher Education
Similar financial lapses were documented at the Ministry for Higher Education. The audit report flagged payments totalling ₦25,383,500 made as educational assistance to Kano State indigene students studying within and outside Nigeria.
These disbursements were executed without acknowledgement or signatures from beneficiaries, undermining accountability and raising concerns about the verification of payments.
The Ministry was further cited for unretired expenditures of ₦25,776,000. Funds were expended on flight tickets, local transportation, hotel accommodation, and Duty Tour Allowance (DTA) for staff attending meetings and conferences both within and outside Nigeria. Auditors noted that these expenditures were not retired in accordance with financial regulations, reflecting poor compliance with internal control procedures.
These anomalies were communicated to the Commissioner, Ministry for Higher Education, via correspondence No. AUD/PMA/MFHE/1/37 dated February 12, 2025. As of the audit report, the Ministry had not provided any response or clarification.
Ministry for Religious Affairs
At the Ministry for Religious Affairs, auditors reported non-retirement of expenditures totaling ₦33,700,000. The funds were transferred directly into individual personal accounts without retirement, a practice the audit flagged as a severe breach of public financial management rules.
Kano Agricultural Supply Company (KASCO)
Kano Agricultural Supply Company (KASCO)
The audit revealed even more extensive financial irregularities at the Kano Agricultural Supply Company (KASCO), a state-owned enterprise responsible for fertilizer and agricultural input distribution. The review uncovered significant underreporting of turnover, overstated income components, poor record-keeping, and weak internal control systems.
KASCO reported a total turnover of ₦4,764,839,012, but auditors established the actual turnover at ₦5,311,466,368. This indicated an underreported sum of ₦1,237,039,678. Further discrepancies were found in reported income streams. While financial statements recorded ₦450,417,600 as blending fees and ₦109,140,461 as interest on bank deposits, the audit established actual figures of ₦418,354,920 and ₦103,953,452, resulting in variances of ₦32,062,680 and ₦5,187,009, respectively.
The audit also exposed major inconsistencies between cash records and bank statements. Total cash sales recorded in the cash book amounted to ₦2,687,115,640, while bank statements reflected inflows of ₦4,764,839,012, revealing a variance of ₦2,077,723,372. Purchases of raw materials and finished goods were also understated; the accounts showed ₦2,925,230,408, whereas auditors established actual purchases of ₦4,255,413,739, a difference of ₦1,330,183,331.
KASCO’s short-term investments were also problematic. While ₦4,610,000,000 was recorded as invested in time deposits with Unity Bank, total inflows recorded as matured time deposit transfers stood at ₦4,713,953,452. Auditors identified the ₦103,953,452 difference as interest on bank deposits, which was not accurately accounted for.
Unretired Foreign Travel Expenditures by Managing Director
The audit additionally flagged unretired foreign travel expenditures totalling $50,630 incurred by the KASCO Managing Director.
The funds were spent on hotel and travel expenses for multiple overseas trips in 2019, but were not supported by required documentation, approvals, or stated purposes, violating public financial management regulations.
Specifically, $10,000 was spent on a trip to Germany on May 28, 2019, without an invitation or retirement documentation (Payment Voucher 237). Another $10,000 was expended on February 18 (Voucher 69), and $10,000 on January 8 (Voucher 04), all without approvals or stated purposes.
Additional trips included $4,630 on August 20 (Voucher 185), $10,000 on August 1 (Voucher 383), and $6,000 on December 10 (Voucher 591), each similarly undocumented.
Beyond numerical discrepancies, auditors raised broader concerns about KASCO’s governance and operational controls. The Company lacked records for total fertilizer and agricultural input production, raw materials procured, and items issued to zonal units.
The use of multiple bank accounts, failure to prepare monthly bank reconciliation statements, excessive inter-bank transfers without justification, and non-maintenance of fixed asset and debtors’ registers were also highlighted as major weaknesses undermining transparency and accountability.
The audit concluded that the Managing Director’s foreign travel expenditures were improperly executed, highlighting systemic lapses in accountability at senior management levels.
Implications and Concerns
Collectively, these audit observations point to systemic weaknesses in financial accountability across Kano State’s ministries, agencies, and senior leadership. Non-retirement of expenditures, underreported turnover, overstated income, and undocumented foreign travel indicate both institutional and individual lapses in compliance with established financial regulations.
Several of the issues raised by auditors remain unanswered months after formal communication, suggesting persistent challenges in enforcing transparency and financial discipline in public institutions.
The audit underscores the need for strengthened oversight, stricter adherence to statutory obligations, and robust internal control systems to prevent further financial mismanagement.
