SPECIMEN OF NEW VERSION OF AUDIT INSPECTION

REPORT

22nd March, 2019

The Head of Directorate,

Planning, Research and Development,
Office of Auditor-General for Local Governments
Ikeja Lagos.

COMMITTEE MEMBERS
1. Shafau A.O. Chairman
2. Lewis S.O. Member
3. Aberuagba A.O “
4. Lawrence S.O “
5. Sanni K.O. “
6. Alape O. A. “
7. Ogunbowale A.A. “

RE: SPECIMEN OF NEW VERSION OF AUDIT INSPECTION REPORT

The committee extensively deliberated on the new version of report after careful
examination of various audit report of other Government Agencies in Nigeria, it
was resolved that the following subject matters should be included in the report
to enhance and achieve the audit objective of this agency.
1. The Title of Audit-Inspection report should be as at……….. to reflect
cumulative figure of expenditure.
2. Financial Overview amendments include
(i) Receivable
(ii) Allocation Reserve
(iii) Payable
3. Gross Expenditure Profile should be limited to only
(i) Overhead Cost
(ii) Capital Cost
(iii) Personnel Cost

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SPECIMEN OF NEW VERSION OF AUDIT INSPECTION
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4. Net Expenditure profile (Subsist)
5. Payables (Subsist)
6. Actual Expenditure Payment by Percentage (Subsist)
7. State of Indebtedness (Subsist)
8. Personnel Emolument (Subsist)
9. Review of General Purpose Financial Statement
a. Review of Consolidated Statement of Performance
b. Review of Consolidated Statement Financial Position
c. Review of Cash Flow Statement
10. Review of Internal Control System (Subsist)
11. Auditor’s Opinion
12. Transfer To Reserve
13. General Observations
a. Contingent liabilities (Cost of Pending Litigations)
b. Outstanding issues of previous Audit-report
c. Issues of contrary opinion
14. Audit Highlights (This should include all items of Statement of Financial
Position).
15. Conclusion

It must be noted that, the above modification will be incorporated if approved

into our Audit Inspection Report to ensure that our Audit Report is in accordance
with international public Sector Accounting Standards (IPSAS).

Thank you

SHAFAU A.O.

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SPECIMEN OF NEW VERSION OF AUDIT INSPECTION
REPORT

Date

The Chairman,
Local Government/ Local Council Development Area,
………………………………
Lagos.

AUDIT INSPECTION REPORT ON THE ACCOUNTS OF …………..

LOCAL GOVERNMENT / LOCAL COUNCIL DEVELOPMENT AS AT
……………. ……………………… 2019

Audit Inspection of the accounts of …….. Local Government / Local

Council Development Area as at ……………………………………., 2019
has been carried out in compliance with provisions of Section 50 of the
Lagos State Local Government Administration Law No. 7 of 1999 and
Sections 69-72 of Lagos State Public Finance Management law No.9 of
2011. The following observations noted in the course of the audit are
hereby referred for your immediate attention and necessary
comments.

2. AUDIT QUERIES
Audit Queries Nos. LGA/INSP/…………../Q.1-xx/2018/F3 of ….....,
2019 are forwarded along with this report for your immediate reaction.
You are to ensure that replies to the queries reach this office not later
than two weeks of the receipt of this report with the original queries
and the payment vouchers under query.

3. AUDITOR’S OPINION

4. REVIEW OF GENERAL PURPOSE FINANCIAL STATEMENT

a. Review of Consolidated Statement of Performance
b. Review of Consolidated Financial Position
c. Review of Cash Flow Statement
d. Review of statement of changes in net surplus/deficit

5. FINANCIAL OVERVIEW

(i) REVENUE PROFILE

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SPECIMEN OF NEW VERSION OF AUDIT INSPECTION
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DEPENDENT REVENUE:-
(STATUTORY TRANSFERS)

Non Exchange Transaction:

Federal Allocation 212,776,794.06

Value Added Tax ---

Excess Crude Oil ---
Special Project Fund ---
Total Dependent Revenue
304,012,428.78

(ii) INDEPENDENT REVENUE

(a) Tax Revenue Nil
(b) Non-Tax Revenue:
*Land Use Charge
8,649,768.42
*LASAA 6,968,233.36
*Wharf Landing Fees 961,406.61
Other Internal Sources (IGR) 7,437,142.12
Total Independent Revenue
24,016,550.51

(iii) OTHER INFLOWS

Short/Long Term Liability:

Bank Loan Nil
Bond Market Nil
Federal/State Govt Nil
Total Long/Short term Liabilities
Total Liquidity position 328,028,979.29
(iv). RECEIVABLES:
Receivable for the period xxx

 Please note that only acknowledged bill served should be recognize as

receivable. However bills printed and not served is querable.
 Items that are not billable eg. Franchise Revenue etc, we should use
budget to determine the appropriateness.

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SPECIMEN OF NEW VERSION OF AUDIT INSPECTION
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(v) ALLOCATION RESERVE

Balance b/f xxx
Reserve made during the period xxx
Reserve as at date xxx

(a) SCHEDULE OF GROSS RECEIPTS AS AT

STATUTORY OTHER LAND USE WHARF
MONTH LASAA TOTAL
ALLOCATION IGR CHARGE LANDING

71, 1,816, 6,070, 2,296,

Jan 92,234,848.62
254,911.71 260.00 199.76 949.60 -

1,575, 2,579, 2,449, 961,40

February 144,595,163.25 180,904,784.16
335.00 568.66 018.50 6.61

4,045, 2,222,
march 104,889,346.51
68,181,630.81 547.12 - 265.26

284,031,705.7 7,437,14 8,649,76 6,968,23 961,406. 399,283,891.0

TOTAL
7 2.12 8.42 3.36 61 0

NET RECEIPTS PROFILE (Cash flow) N

Bal .B/F 1/1/19 9,994,754.07
 Statutory Allocation 173,361,336.57
 State Grant NIL
 Land use Charge 8,649,768.42
LASAA
6,968,233.36
 Wharf Landing fees
961,406.61
Other IGR 11,381,842.12
 Total Net Receipt
201,322,587.08

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SCHEDULE OF NET RECEIPTS AS AT 1ST JULY- 30TH SEPTEMBER,

2019.
OTHER
STATUTORY WHARF
MONTH IGR (Actual LASAA TOTAL
ALLOCATION LAND USE LANDING
Receipt)
BAL. b/f 9,994,754.07
JULY
-
6,070,199.76 4,034,560.00 2,296,949.60 - 12,401,709.36
114,548,534.5
AUGUST 105,779,705.76 2,579,568.66 2,778,835.00 2,449,018.50 961,406.61
3
SEPTEMBE
R
67,581,630.81 - 4,568,447.12 2,222,265.26 - 74,372,343.19
8,649,768.4 11,381,842.1 6,968,233.3 201,322,587.0
TOTAL 173,361,336.57 961,406.61
2 2 6 8

Note: Net receive profile must have balance b/f as at 1/1….

Plus the net received for the period

(vi) a. EXPENDITURE (COMMITMENTS) PROFILE (GROSS)

N N
 Overhead Cost xxx xxx
 Capital Expenditure xxx xxx

 Personnel Cost xxx

 Total Commitments xxxx

SCHEDULE OF TOTAL GROSS EXPENDITURE AS AT 30TH JUNE

CAPITAL OVERHEAD PERSONEL

EXP EXP COST TOTAL
- 0.00 -
january 20,001,729.88
4
february - 27,138,053.54 6,278,655.16 92,230,436.63
2 41,73 2
march 0,738,000.00 2,321.85 8,744,292.14 91,814,613.99
9 21,49 3
April 8,969,000.00 9,635.31 6,313,511.27 156,782,146.58
1 1
19,707,000.0 90,3 11,336,458.5
TOTAL 0 70,010.70 7 360,828,927.08

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SPECIMEN OF NEW VERSION OF AUDIT INSPECTION
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b. PAYABLES:
N
 Payables:
Balance b/f xxx
Payable for the period xxx
Payment made during the period (xx)
Balance c/f xxx

c. EXPENDITURE ACTUAL PAYMENTS

% N
Overhead Costs xx xxxxxx
Capital Expenditure xx xxxxx
Personnel Cost (non Pensionable) xx xxxxxxxx
Social services sector xx xxxxxxx
Deposit/Unremitted Deduction paid xx xxxxx
Total Actual Expenditure xxx xxxxxxxx

SCHEDULE OF TOTAL EXPENDITURE (ACTUAL PAYMENTS) AS AT

31ST MARCH, 2019
NON social Deposit
CAPITAL OVERHEAD PENSIONABL Services Paid
MONTHS EXP EXP E TOTAL
xxxxxxxxxx xxxxxxx xxxxxx xxx xxxxx xxx
JAN x xxxx xxxxx xxxxxxxx xxxxxx xxxxxxxx
xxxxx xxxxxxx xxxxxx xxx xxxxx xxx
FEB xxxxxx xxxx xxxxx xxxxxxxx xxxxxx xxxxxxxx
xxxxx xxxxxxx xxxxxx xxx xxxxx xxx
MAR xxxxxx xxxx xxxxx xxxxxxxx xxxxxx xxxxxxxx
xxxxx xxxxxxx xxxxxxxxx xxx xxxxx xxx
TOTAL xxxxxx xxxx xx xxxxxxxx xxxxxx xxxxxxxx

B. STATE OF INDEBTEDNESS
The total liabilities of the Local Council as 30 TH September, 2018 were
as follows:-
(i) Payables: N N
 Account payable (Sundries) B/F 18,476,232.94
Incurred 29,631,000.00
Payment (28,739,000.00)

19,368,232.94

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Account payable(Salary) B/F -
1ncurred -
Payment -
-
 Account payable (Capital)B/F 20,000,100.00
Incurred 120,936,230.95
Payment (75,140,720.00)
65,795,610.00

(ii) Unremitted Deductions:

i. Payable to Government (unremitted taxes) 51,494,430.08
ii. Payable to individual (Retention fees) 57,343,777.50

108,838,207.58
Total Indebtedeness 194,007,050.52

Despite audit recommendations and assurances from the management

of the Local Council, the debt profile was not taken into cognizance
before entering into further financial obligations. This has crystallized
further liabilities to the Local Council.

6. PERSONNEL EMOLUMENTS
The sum of N111,336,458.57 was expended as personnel emolument
for the period under review while, N20,100,823.85 was paid as non
pensionable staff salaries. See table below:

(PERSONNEL COST)
PENSIONABLE NON PENSIONABLE
STAFF COST (GROSS) TOTAL
S/N MONTHS N N N
1 JAN 32,051,439.26 14,227,215.90 46,278,655.16
2 FEB 28,744,292.14 00 28,744,292.14
3 MARCH 30,439903.32 5,873,607.95 36,313,511.27
20,100,823.85 111,336,458.5
TOTAL 91,235,634.72 7

7. REVIEW OF INTERNAL CONTROL SYSTEM

The review of the Internal Control System of the Local Council revealed
the following observations:

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STATE OF BOOKS OF ACCOUNTS AND RECORDS

(i) BREACH OF STATUTORY REQUIREMENTS
(a.)NON PREPARATION OF GENERAL PURPOSE FINANCIAL
STATEMENTS.

(ii) BUDGETARY MATTERS

(a) INTERNAL REVENUE SHORTFALL (DEFICIENT REVENUE HEADS)

b. UNAUTHORISED EXCESS EXPENDITURE

 REVIEW OF BANK STATEMENTS

 UNAUTHORIZED TRANSFER OF LOCAL GOVERNMENT
FUNDS

8. REVENUE ACCOUNTS
i CONCEALMENT OF REVENUE LEDGERS

II. TEJUOSHO MARKET-REVENUE PROCEEDS NOT ACCOUNTED

FOR
(iii) UNCOLLECTED REVENUE ON OYIN JOLAYEMI PROPERTY

9. EXPENDITURE ACCOUNTS
i. CAPITAL PROJECTS EXECUTED BUT CHARACTERIZED WITH
IRREGULARITIES

ii. DOUBTFUL EXPENDITURE ON EMPOWERMENT

PROGRAMME

iii FICTITIOUS EXPENDITURE

iv. UNREMITTED STATUTORY TAX DEDUCTIONS AND
RETENTION FEES

10. GENERAL OBSERVATIONS

a. TRANSFER TO RESERVES
Audit should report briefly, specific reserve as reported in the financial
over view for further clarification.
b. CONTINGENT LIABILITIES (COST OF PENDING LITIGATIONS)

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Audit will have to review and report on the cost implication of all
pending litigations of which the outcome is yet to be known
consequently, such outcome particularly when it is bad could affect the
financial position of the Local Governments/Local Council during the
period under review.

c. OUTSTANDING ISSUES OF PREVIOUS AUDIT REPORT

d. ISSUES OF CONTRARY OPINION

11. AUDIT HIGHLIGHTS

This should include analyses of any addition, disposal of the current
fleet of vehicles in the Local Government/Local Council Development
Area. However, this should include all items in the Statement of
Financial Position.

12. CONCLUSION
The Chairman is enjoined to give this report priority attention it
deserves by ensuring that all observations highlighted are promptly
addressed in compliance with F.M. 1.10(7), Section 80 (2)80.3 and 82.2
of the Guidelines on Administrative Procedures of the Local
Government, (2011).

13. Thank you.

……………………….
For: Permanent Secretary /Auditor-General for Local
Governments.

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