X-raying Facts and Fictions of the Published Abia State Quarter One Financial Report
- Abia State Government, through the ministry of finance, regularly publishes her financial reports via the state website, www.abia state.gov. The most crucial reason for doing this is public accountability and transparency.
- While it is desirable for citizens to have and read the report, it is obvious that not everyone will be able to interpret it properly with the danger that while data may have been sourced from an “official source”, the wrong interpretation will generate FAKE and MISLEADING outcomes.
- In public accounting and financial management, we talk about FACTS BEHIND THE FIGURES because figures on their own might require professional interpretation for it to properly make sense.
Proper understanding of a professional accountant with regard to a line entry will likely require review of source document especially if the individual does not operate within the source environment.
- For instance, someone who does not work within the source environment might read expenditure credited to “Office of the Governor” to simply mean “what the Governor pocketed” whereas a properly trained accountant will seek the source documents to see the details.
- For clarity, “Office of the Governor” expenditure includes wages and other expenditures of all the units and Agencies within the Office. In Abia State, aside from the wages and expenditures of those working directly within the Office of the Governor, there are units like Emergency Medical Services, Aides of the Governor etc that are reported under the Office of the Governor. An untrained mind or someone on a mission to mislead in order to score cheap political points might choose to just interpret the wages and related expenditures of all the units listed under “Office of the Governor” as simply what the “governor consumed” or “personally expended”, and people will clap for him/her.
- Since 2015, Governor Okezie Ikpeazu took a voluntary 50% cut in his salary and allowances. The same cut was extended to all his political appointees including commissioners, advisers and assistants. The implication is that Governor Ikpeazu and his appointees are receiving 50% of what those who worked in similar positions in previous democratic administrations received. This sacrifice is being made to help make more funds available to pay civil servants and pensioners.
- Published STATE accounts focus strictly on income and expenditure of the STATE government. It has nothing to do with local governments income and expenditure. While the state government pays state civil servants, state pensioners, state public servants and senior secondary school teachers, it is individual Local governments that pay LGA workers, LGA pensioners, LGA public servants, primary and junior school teachers.
- Trying to find how much primary school or retired primary school head teachers have been paid from a published state account speaks to lack of understanding which will lead to wrong conclusions.
- Abia State Government hitherto prepares her Financial Statements using Cash Accounting methods as most States of the Federation. The N13b figure published as Opening Balance is the 2020 Budget Closing Balance. It is important to note that budget is an estimates of income and expenditure. Thus the 2020 Audited Financial Report which is the Final Account when published will show the actual income and expenditure and Closing Balance for the 2020 Fiscal Year and the actual opening balance would be then known. The N13b erroneously raised by the critic is the Budget Closing balance and not the actual balance since the year 2020 final accounts have not been finalised and published as at the point of publishing 1st Quarter Budget Implementation Report.
- Published financial statements might contain caveats that should guide the reader on whether it is a finalized account or not. For instance, in the published Q1 account, a trained eye will see caveats such as “as at the point of reporting, inflow from capital receipts have not been captured and most agencies have not submitted their quarterly report”. When I saw that line in the report even as “less educated a person in professional accounting”, I concluded that it is not a finalized account. That point was apparently lost on some “more educated” analysts because people see what they want to see only and assimilate only what they itch to perceive.
- Properly trained finance managers and analysts understand the difference between reported quarterly account and final account. They understand the limits of quarterly reporting and I am sure that most will be excited that Abia State Government published a first quarter (January, February, March 2021) account in April/May, even if not finalized yet.
- At the beginning of the financial year, it will be disingenuous to expect high capital expenditure when most contracts are possibly yet to be finalized and even awarded. Those familiar with the public sector will tell you that it is from Quarter 2 that you have significant increases in capital expenditure for obvious reasons. The report under review explained same fact by simply stating as follows regarding capital expenditure: “This is low as projects execution and contract awarded are going through documentation processes and their returns would be captured in subsequent quarters”. Therefore, when someone blinded by partisanship screams that “Ikpeazu did not spend much on capital projects” folks like me just shake our heads and move on to more important things.
- Indeed, a cursory review of the 2021 budget of Abia State will show that the government plans to spend more on capital projects than recurrent expenditure. Please, feel free to read a copy of the 2021 budget from the state website. It has N69bn for capital expenditure and N63bn for recurrent, of the signed N131.85bn.
- Recurrent expenditure includes salaries and wages as well as other associated cost of running government. Naturally, wages are expected to be paid, services provided including security, and that is expected to happen throughout the year.
- Someone on a mischief mission can choose to single out a ministry and scream that the head of the ministry has received or spent N1bn without having to state whether the N1bn was for wages of those in the ministry or for the pocket of the head of the ministry. In a political environment, people can freely malign others without batting an eyelid while simply claiming it is in the official publication of the government account. No need for any mischief maker to tell the public what the money is for as long as his malicious intentions of bringing others to public odium is achieved. Sadly, those who do not know better will believe that the head of the ministry has personal access to such amount for the period under review.
- To interpret a financial report effectively, one needs to understand the sector that is reporting and in some cases even demand to see source documents as against group entries. There are standard reporting formats and only an untrained mind will claim that source details are deliberately being withheld. Auditors access source documents while verifying accounts and Abia State Government has been publishing her audited accounts in national dailies in the past years.
- It doesn’t matter how “well educated” you are, if you do not understand a sector you will likely fail to correctly interpret a relevant report. A medical doctor is well educated just like an accountant but he (medical doctor) can’t claim to be an expert in accounting simply because he is “well educated”. Similarly, a book keeper without university education might understand accounting entries more than a medical doctor whereas the least medical worker in a hospital might understand drug labeling and prescription more than a well educated accountant. It is obtuse to claim better education when dealing with issues you lack specialization or hands-on knowledge of.
- When people make false claims on wages without proper verification, it has nothing to do with level of education but more about attention to details, or deliberate partisan attempt to mislead gullible members of the public. Someone recently claimed falsely in writing that Abia State Government has not paid state pensioners since this year and still vowed to apologize if anything he wrote was false. Well, state pensioners were paid in January and February of 2021 and will receive payment for March shortly. The implication is that the person lied blatantly and should ordinarily apologize if vested with any modicum of self respect.
- The claim that the state government asked pensioners or workers to forfeit outstanding payments is FALSE and a product of obtuse reasoning. Nobody can be forced to forfeit earned wages in law. It is really as simple as that, yet, not everyone will know that, regardless of how “well educated” they claim to be.
- One individual who claimed to be “very well educated” on financial issues analysed the posted quarter one report of Abia State and went ahead to warn the public that the report does not even include “Conditional Cash Transfer Funds”. Conditional Cash Transfers were made directly by the Federal Government to the beneficiary citizens through vehicles like Npower and other Conditional Transfers using the State data available to the federal Government Agencies and could only be reported after the exercise as a Capital Receipt in our Budget performance.
I was so embarrassed that I had to go back to google to check if what I know from Business School to be conditional funds transfer has changed. Alas, it is still the same and, so far, only two other countries in Africa, Morocco and South Africa, are implementing it. Please, use google and help me understand why the “very well educated” fellow is looking for “Conditional Cash Transfer Funds” in Abia State Quarter One report. May be it is my own “poor education”, as alluded to by the person, that is worrying me again.
- Quite frankly, even after noting all the misrepresentations and attempts to malign Government by some of those who read but don’t understand the report they read, I will personally not ask for apologies in any form because I am even proud of the fact that someone attempted to read what was posted. In these days and times that people hardly take time to study before becoming “experts”, it is good that someone opened a published public account and tried to read it, even if he reached wrong conclusions as a result of limited knowledge of public sector accounting. Shouting “John Okiyi Kalu” all over social media does not change facts but might help to further raise the consciousness of others that Abia State Government actually publishes quarterly account statements. It is called transparency and I am proud of my Governor and government for being transparent in financial management. It is wrong for a critic to create his own table of analysis without showing the content of the original document you referenced to, This is where the critic got it wrong; choosing figures, analyzing wrongly without proper guidance thereby misleading others.
- If I haven’t worked within the organized private and public sectors, gone to Business School, trained locally and internationally in management, I just might make similar mistakes. After all, even after first degree, I used to wonder why financial reports hanging in banking halls are made in the format they are made until I was guided properly.
- For those expecting me to issue formal response or debate published reports, kindly wait till a professional who understands public sector account reporting raise issues. Then I might volunteer to debate the person or plead with the makers of the document to come forward and discuss it. Our current focus is on how to secure our people and I will rather spend valuable time on that.
- As per what the Ikpeazu administration has done in every LGA of the state, the facts are there for all to verify. We have published achievements of the Governor by LGA online severally and no human being has ever disputed one single entry as fake or not done by the administration. Go to The Abia Info and search through to see what has been done in your LGA. After that, come back and tell me that “no single road or project was done” in your LGA.
- It is good to hear folks now say things like “working on Aba alone does not mean he has worked in all of Abia”, after all, it used to be “he has done nothing in Aba and Abia”. We are making progress, by their own admission, even though factually misleading because there is no ward in Abia State without an Ikpeazu project.
Thanks for reading this, I pray for you that, since “Wisdom is the principal thing; therefore get wisdom. And in all your getting, get understanding” as written in the Bible, even as you also become “well educated”.