KPMG Conducted Financial Process Review, Not Forensic Audit, Says Abia PDP (Document) | #Nwokeukwu

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…Abia PDP Refutes Alex Otti's Claims on KPMG Report, Calls for Apology, Transparency | #NwokeukwuMascot

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Umuahia, Abia State – The Abia State chapter of the People's Democratic Party (PDP) has voiced strong objections to recent statements by Governor Alex Otti regarding a KPMG report on the state's financial records. The PDP criticized Otti for allegedly misrepresenting the nature of the report to discredit the previous administration led by Dr. Okezie Ikpeazu.

For the past three weeks, Abia State has been the center of controversy following Otti's claims from the United States that a forensic audit by KPMG uncovered that the Ikpeazu administration paid N10 billion for a non-existent airport. Under pressure from the public to release the audit, Otti provided a document from KPMG, which was titled "Provisions of Financial Process Review for Abia State Government."

The Abia state PDP in a press release Signed by Hon. Elder Abraham Amah, Abia PDP Vice Chairman/Acting State Publicity Secretary highlighted that KPMG explicitly stated in its introductory notes that the document is not an audit but a financial process review, focused specifically on analyzing operational workflows, identifying inefficiencies, risks, and providing recommendations for improvement. It did not aim to uncover evidence of fraud or misconduct, which is the purpose of a forensic audit.

The party in the statement captioned, “KPMG CONDUCTED A PROCESS REVIEW, NOT FORENSIC AUDIT ON ABIA FINANCIAL RECORDS” said that a forensic audit typically seeks to uncover fraud or misconduct, whereas a financial process review involves assessing and recommending improvements to operational processes. The PDP emphasized that Otti, with his extensive banking experience, should understand the difference between these two types of reviews.

“The Abia PDP expresses deep concern and disappointment over the use of language by Alex Otti to drag the former PDP administration of Dr. Okezie Ikpeazu to the mud, and confuse the good people of Abia State, especially when such motives are purely political, unwarranted and totally unnecessary. 

“Abia State has been trending for the wrong reasons in the last three weeks, when Alex Otti, in the far away United States, claimed that a forensic audit conducted by KPMG indicted the former administration of Dr. Okezie Ikpeazu and his government for paying N10b for a non-existent airport. 

“After he was pressured by citizens to make public the forensic audit report, Alex Otti a few hours ago, released a document by KPMG which it titled a Provisions of Financial Process Review for Abia State Government and KPMG stated clearly in its introductory notes that the said document is not an audit of Abia financial records but a mere financial process review and subsequently issued caveats absolving it of any opinions in the said report because it did not render any. 

“For the benefit of those who do not know, a forensic audit report is typically conducted with the specific objective of uncovering evidence of fraud or misconduct while a financial process review involves analysing operational workflows, identifying inefficiencies, risks and making recommendations for improvements and may include process redesign and automation and other factors to scale productivity. 

“PDP is not surprised that Alex Otti, a graduate of economics who worked in the banking sector all his life to the point of becoming the managing director of a first generation bank, could not differentiate between a forensic audit and a financial process review because he was, as usual, clouded by hate and deep animus for the PDP and Dr. Okezie Ikpeazu. 

“To bring home the fact, the touted report is titled Provision of Process Review Services, not forensic audit report and the Restriction on Distribution of the Report page, states clearly “This final report is intended for the use of Abia State Government (“ABSG”) and should not be used for any other purposes. 

“Furthermore, on Page 16 of the financial process review document, KPMG stated in the Nature of Assignment, that: 

“A.) This assignment was not performed by us in the capacity of a statutory auditor. Hence, this is not any form of financial statements audit of ABSG or any entity listed in the report. We are therefore not required to render an opinion on the financial statements of ABSG or any entity listed in the report.

“B.) Rather, we have performed the procedures we considered appropriate in the circumstances and in line with relevant KPMG methodology.

“C.) We were also not required to review the adequacy or otherwise of the output of the prior

or current external auditors and/or consultants of ABSG, and did not perform any of the following:

“i.) Conduct a trial and/or inquiry in the course of the assignment.

“ii.) Act as a tribunal, commission of inquiry or in judicial or quasi-judicial role.

“iii.) Perform, any adjudicatory function whatsoever in the course of the assignment.

“iv.) Conduct any exercise with a view to determining whether any person was guilty or innocent of any offence.

 Page 16 of the KMPG Report. 

“From the foregoing, it is evident to discerning minds that KPMG stated very clearly that it did not conduct an audit, much less, forensic. Transparency and accountability are fundamental principles that underpin good governance and public confidence in the audit process.

“Unfortunately, the operatives of Alex Otti government have continued to anchor their indictment on the N10b payment which Ferotex, the same contractor Alex Otti is still using, made to 32 other contractors. Thankfully, the operatives of the former government have offered explanations to that and so Alex Otti has nothing to say again. 

“Like a drowning man who is looking for even a straw to hold onto, Alex Otti keeps making reference to the N10b which he cannot prove. The refusal to allow independent scrutiny of the report suggests a lack of commitment to upholding professional standards and ethical guidelines and PDP demands that Alex Otti make public the cost of the financial process review. 

“The decision by KPMG to prevent public disclosure and review of the report lends credence  to the fact that the exercise, for which Alex Otti made a mountain out of a molehill, was after all, just an opportunity to spite the PDP and Dr. Okezie Ikpeazu and this goes against the principles of openness, transparency, accountability and good governance. It is essential for the Abia state government to ensure that all audit processes are conducted with utmost transparency and that findings are subject to independent verification to maintain public trust.”

The PDP accused Otti's administration of misleading the public by presenting the process review as a forensic audit to malign Dr. Ikpeazu and the PDP. They also challenged Otti to disclose the cost of the financial process review and to allow independent scrutiny of the report to uphold professional standards and ethical guidelines.

Furthermore, the PDP pointed out that the KPMG report indicated that Governor Ikpeazu left N3.4 billion in the state treasury, contradicting Otti's claims of an empty treasury. They urged Governor Otti to apologize to Dr. Ikpeazu and the people of Abia for the alleged misinformation.

The PDP ended by calling on the citizens of Abia to demand transparency and good governance from Otti, emphasizing that governance should transcend political animosities for the benefit of the state.

The statement reads in full, “The people of Abia deserve to know the truth about any potential financial irregularities or misconduct uncovered by any audit and we urge the authorities to prioritise transparency and accountability in all matters related to governance and financial management.

“Fortuitously, the process review report indicated that Governor Okezie Ikpeazu left N3.4b in the coffers of the State, contrary to dubious claims by Alex Otti that he met an empty treasury on assumption of office. It is clear to Abians who has been lying to them, between Alex Otti and Dr. Okezie Ikpeazu.

“The Abia PDP calls on Alex Otti to render a public apology to Dr. Okezie Ikpeazu for smearing his name, especially in an international arena, to Abians for misleading and lying to them serially that a forensic audit was conducted with their funds when it was a mere financial process review meant to improve the efficiency of government operations. 

“We also call on the good and well meaning people of Abia State to disregard Alex Otti's recourse to hate and witch hunt and demand from him the good governance which he consistently promised Abians in over eight years as an opposition figure. Governance should be placed above politics for it to make sense.”