Osun’s 2025 Audit Report: Why Selective Interpretation Must Not Be Mistaken For Financial Misconduct By Henry Akinola

The recent publication by some bloggers concerning the 2025 Audit Report of Osun State, particularly the attempt to portray routine audit observations as evidence of financial impropriety under the administration of Governor Ademola Adeleke, calls for proper clarification. While the public has every right to demand accountability, such scrutiny must be guided by facts, professional understanding and the complete contents of the report, rather than sensationalism and selective reporting.

First, the Office of the Auditor-General is an independent statutory institution established under Section 125 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended). Its responsibility includes examining public accounts, identifying discrepancies and ensuring compliance with established financial regulations. Its independence must be respected, and its observations must be understood within the context of the entire audit process.

A proper examination of the 2025 Audit Report reveals that Pages 12–25 contain observations raised during the audit, requiring explanations and responses from the Accountant-General. More importantly, Pages 26–30 contain the Accountant-General’s responses and explanations, while the final audited financial statements and audit opinion are contained on Pages 31–80.

This sequence is important because it demonstrates that the observations highlighted by the bloggers were not the conclusion of the audit process. They were part of the preliminary examination, clarification and reconciliation stages that eventually culminated in the final audited accounts. It is therefore misleading to extract selected observations while deliberately ignoring the subsequent responses and final outcome.

Regarding the much-publicised ₦5.5 billion difference in bank balances, it is important to understand that bank reconciliation is a fundamental accounting procedure. It involves comparing an organisation’s cash book balances with its bank statements to identify and resolve differences arising from timing discrepancies, outstanding transactions, bank charges, errors and other reconciling items.

Such differences do not automatically constitute missing funds, diversion or financial misconduct. Rather, they are precisely the kinds of issues that an audit is expected to identify and require the relevant accounting authorities to explain and reconcile. The Accountant-General’s responses and the subsequent reconciliation process must therefore be considered before arriving at any conclusion.

The issue of the ₦206.9 million associated with the defunct Heritage Bank also requires proper context. Following the revocation of the bank’s operating licence by the Central Bank of Nigeria in June 2024, the Nigeria Deposit Insurance Corporation assumed responsibility for the liquidation process, affecting depositors and account holders, including Osun State Government.

The Auditor-General’s request for an update on the status of the funds is a legitimate audit requirement. However, an outstanding financial exposure in a failed bank must not be deliberately presented as evidence of misappropriation by the current administration. There is a clear distinction between funds exposed to a bank’s liquidation process and funds unlawfully diverted or stolen.

Similarly, the ₦2.46 billion reportedly held in accounts operated by ministries, departments and agencies must be understood within the explanation provided by the Accountant-General, which identified the balances as part of sub-accounts under the state’s modulated Treasury Single Account arrangement. The relevant consideration is whether the funds were properly captured, reconciled and managed in accordance with applicable financial regulations.

Other observations concerning dormant, inactive and restricted accounts, outdated bank signatories and operational cash books are also matters of financial control, documentation and administrative compliance. While such observations deserve attention, they should not automatically be interpreted as evidence of fraud or misappropriation.

Indeed, the essence of an audit is to identify weaknesses, demand explanations and recommend corrective measures that strengthen public financial administration. Audit observations are therefore an integral part of ensuring transparency and accountability, not necessarily an indictment of the administration being audited.

Perhaps the most significant aspect of the report that deserves public attention is the final audit opinion. The report contains an unqualified opinion on the 2025 financial statements. In accounting terms, this indicates that the financial statements present fairly, in all material respects, the financial position of the government in accordance with the applicable financial reporting framework.

An unqualified opinion does not suggest that every transaction or administrative process is automatically flawless. Neither does it invalidate the observations raised during the audit. However, it is important that the final professional conclusion is considered alongside the preliminary observations, management responses and reconciliation process.

It is therefore contradictory for anyone to place extraordinary emphasis on preliminary observations while deliberately ignoring the final outcome of the same audit exercise. A responsible interpretation of an official audit report must consider the entire documentary trail rather than isolated figures taken out of context.

Interestingly, the publication of the audit report itself demonstrates the importance attached to transparency and public accountability by the Osun State Government. An administration that makes its audited financial statements available for public scrutiny should be encouraged to sustain that culture of openness rather than have its transparency deliberately weaponised against it.

The independence of the Auditor-General’s office must equally be protected. The office should be allowed to discharge its constitutional responsibilities without political interference, intimidation or attempts to discredit its findings. At the same time, the public deserves sufficient information to distinguish between preliminary audit observations, management responses, financial reconciliations and final audit conclusions.

Osun State also has an established platform through its annual Audit Forum, traditionally organised around August, where stakeholders and members of the public have the opportunity to engage with the audit process, seek clarifications and discuss issues relating to the state’s accounts. Concerned citizens should take advantage of such institutional platforms rather than rely solely on sensational headlines.

The government, on its part, should continue to uphold transparency, cooperate with the Auditor-General’s office and ensure that all observations receive the necessary attention. This is how public institutions become stronger and public confidence in governance is sustained.

Ultimately, the issue is not whether the Auditor-General has the constitutional authority to raise questions about government accounts. He certainly does. The real concern is whether those claiming to inform the public are presenting the report objectively or deliberately extracting selected observations to manufacture a narrative of financial misconduct.

There is a fundamental difference between an audit observation and a finding of fraud; between a bank reconciliation difference and missing public funds; and between an outstanding financial exposure and misappropriation. These distinctions must not be sacrificed on the altar of political propaganda.

Osun people deserve the truth, not sensationalism. They deserve accountability, not deliberate distortion. Above all, they deserve an informed public discourse in which facts are allowed to prevail over political mischief.

Henry Akinola
An Economist, Audit Expert and Public Analyst
Ogo-Oluwa, Osogbo

Disclaimer: This piece represents the opinion of the writer not that of CityMirrorNews