An audit report for the 2025 fiscal year has raised serious concerns regarding the financial management of Osun State, highlighting significant discrepancies and questionable practices in the government’s accounting records. Among the most alarming findings is the inclusion of N206,939,439.58 held in Heritage Bank, a financial institution that saw its operating licence revoked by the Central Bank of Nigeria on June 3, 2024, and subsequently entered liquidation. The Auditor-General, Kolapo Idris, noted that these funds were presented in the state’s financial statements as if they remained accessible cash, despite the bank’s total collapse.
In his comprehensive report, the Auditor-General did not mince words regarding the state’s disclosed cash position, bluntly stating, “Can never be correct.” Although the report maintains an unqualified opinion on the state’s 2025 financial statements—suggesting they offer a true and fair view based on available documents—this is heavily caveated by the Auditor-General’s own observations. He pointed out that the accounts were only certified after his office intervened to address numerous lapses.
A major point of contention involves the reconciliation of bank balances. The Auditor-General observed that the closing balances reported by various ministries, departments, and agencies (MDAs) sharply contradict the findings of his independent year-end cash survey. In several instances, the figures reported in the state’s final accounts were absent from the official documentation provided by the Accountant-General’s office. This led the Auditor-General to conclude that the Office of the Accountant-General lacks effective control over the accounts operated by these agencies.
The audit revealed a massive reconciliation gap at the state headquarters, where internal records pegged bank balances at N18,542,057,428.96, while bank-certified statements indicated N24,056,470,917.62—a discrepancy of over N5.5 billion that remains unaccounted for. Furthermore, auditors were denied access to operational cash books for the period ending December 31, 2025, hampering efforts to verify the state’s adherence to the International Public Sector Accounting Standards.
The report also flagged administrative irregularities in banking operations. Investigations into bank mandates revealed that some accounts still list retired officers and a former commissioner as signatories. Describing this as “absurd,” the Auditor-General warned that such laxity provides a clear pathway for the depletion of dormant public funds, which should instead be managed by currently serving, accountable personnel.
Financial leakage appears to be a systemic issue, with over N2.46 billion held by various MDAs failing to revert to the treasury, despite explicit directives requiring such transfers. The government’s management argued that these funds are part of a “modulated” Treasury Single Account system, but the Auditor-General noted that this failure to revert funds is a recurring trend that has gone unpunished. Additionally, the audit uncovered hundreds of millions of naira trapped in dormant, inactive, or restricted accounts, alongside foreign currency balances that lacked both bank certification and official exchange rate documentation.
Transparency issues also extended to tax reporting, where a discrepancy of N963,082,842.49 was discovered between the Value Added Tax (VAT) reported by the state and the figures recorded in the Federation Account. While management claimed the surplus was “additional revenue,” the lack of reconciliation remains a point of concern. By the close of the 2025 fiscal year, Osun State’s total reported cash and bank balances stood at N38,151,344,724.49, marking a significant decline from the N60,205,607,471.60 reported the previous year.
Source: NaijaProbe