Abstract

This study investigates the whistleblowing mechanism and internal audit effectiveness in the Nigerian public sector. To achieve this objective, research questions were raised, hypotheses were formulated, and related literature was reviewed. Ninety (90) copies of a questionnaire were distributed to federal, state, and local government institutions in Enugu State, out of which seventy-nine (79) were completed and retrieved. Data collected were presented in tables and analysed using mean scores, while Levene's test for equality of variances was used to test the hypotheses with the aid of SPSS. The study found significant differences in the implementation of whistleblowing among the three tiers of government, with the federal government recording the highest level of implementation, and a significant relationship between whistleblowing policy and fraud prevention in the Ministry of Finance, particularly at the federal level. The study recommends that state and local governments develop and formalise whistleblowing policies to strengthen fraud prevention and detection, and that a unified whistleblowing framework be adopted across all tiers of government for effective monitoring and control.

Keywords: Whistleblowing, internal audit effectiveness, fraud prevention, public sector, Nigeria

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Government establishes public sector institutions to provide social, public, and merit goods at affordable rates and to promote equitable development across the country. These objectives can only be realised where public officers discharge their duties in line with laid-down rules, regulations, and codes of conduct. Over the years, successive Nigerian governments have introduced legal and institutional instruments intended to check malfeasance among public officers, including the Constitution of the Federal Republic of Nigeria 1999 (as amended), the Audit Ordinance of 1956, the Finance (Control and Management) Act of 1958, the Financial Regulations, and the Revenue Allocation Laws. However, these instruments do not enforce themselves; their effectiveness depends on the officers charged with implementing them and on the accountability structures that check abuse of the offices created. Recent assessments of Nigeria's institutional accountability architecture continue to describe it as weak, with audit committees and oversight bodies frequently unable to operate independently of the executives they are meant to monitor (Ashiru, Adegbite, Frecknall-Hughes & Daodu, 2024). This weakness partly explains the persistence of fraud, revenue leakages, and abuse of public office that continue to characterise Nigeria's public financial management space.

Against this backdrop, successive administrations have sought mechanisms to detect wrongdoing before it escalates, and whistleblowing has emerged as one of the most widely canvassed tools for this purpose. Nigeria's Federal Ministry of Finance formally introduced a whistleblowing policy in December 2016, offering financial rewards of between 2.5 and 5 per cent of any recovered stolen or concealed public funds to citizens who volunteer credible information on financial infractions (Federal Ministry of Finance, Budget and National Planning, 2024). The policy initially recorded notable successes in terms of asset recovery, but its momentum has since slowed considerably. In December 2022, the Federal Executive Council approved a draft Whistleblower Bill intended to provide the legal backing and witness-protection guarantees that the original administrative policy lacked (Premium Times, 2022), yet by 2025 the bill had still not been passed into law, and anti-corruption agencies such as the Independent Corrupt Practices and Other Related Offences Commission continued to publicly press the National Assembly to act on it (African Centre for Media and Information Literacy [AFRICMIL], 2025). Comparative reviews of the Nigerian framework note that, unlike jurisdictions such as the United States, where the Securities and Exchange Commission's whistleblower reward programme has returned billions of dollars in recovered sanctions since its inception, Nigeria's policy remains an unlegislated administrative circular that offers no formal protection against retaliation, demotion, or dismissal (Templars Law, 2025).

The literature on whether whistleblowing genuinely changes behaviour in public institutions remains divided. Ojobo (2023) argues that the slow uptake of whistleblowing in Nigeria is rooted in cultural norms that discourage subordinates from questioning persons in positions of authority, a dynamic reinforced by the absence of a binding legal framework protecting those who do come forward. In a related vein, the Platform to Protect Whistleblowers in Africa (2023) reports that the Nigerian whistleblowing policy has lost momentum largely because citizens who provide information about corruption remain exposed to reprisal, with no compensation scheme or sanction regime for retaliatory conduct. Ezeoha, Akinyoade, Ehrhardt and Uche (2025), examining nearly a decade of the policy's operation, similarly conclude that its narrow focus on monetary recovery, combined with weak protective guarantees and low institutional trust, has limited its capacity to mobilise sustained citizen participation in Nigeria's anti-corruption effort. Not all findings are uniformly pessimistic, however: a national Nigerian study of internal whistleblowing intentions across higher-education institutions found that staff and student willingness to report wrongdoing internally was strongly shaped by organisational attitude, self-efficacy, and subjective norms, suggesting that institutional design and organisational climate matter as much as legal protection in determining whether whistleblowing mechanisms are actually used (Ogunfowokan et al., 2024). This departs from the more optimistic assumption, common in early corporate governance literature, that formally announcing a whistleblowing channel is by itself sufficient to alter reporting behaviour within an organisation.

Internal audit functions occupy a related but distinct position in this accountability architecture. As the assurance and consulting arm of an institution's internal control system, internal audit is expected to work in tandem with whistleblowing channels: while whistleblowing surfaces isolated tips from insiders or the public, internal audit systematically tests controls, verifies compliance, and evaluates the adequacy of the overall control environment (Badamasi & Ahmad, 2024). Recent Nigerian studies suggest that internal audit units across many ministries, departments, and agencies still fall short of this assurance role. Mahmoud and Damagun (2023), studying internal audit effectiveness across six Nigerian paramilitary agencies over a ten-year period, found that audit quality, staff independence, and the scope of audit work were all significant determinants of internal audit effectiveness, with management support recording the strongest statistical effect of all the factors examined. Similarly, Obafemi and Opadijo (2023), in a study of public teaching hospitals in Oyo State, found that internal audit independence and management involvement were positively associated with operational performance, while Idowu and Ibrahim (2023) reported a significant relationship between internal audit quality and the performance of state-owned tertiary institutions in Osun State. Taken together, these studies suggest that internal audit effectiveness in the Nigerian public sector remains inconsistent and heavily dependent on institutional support, independence, and staff competence — conditions that also determine whether whistleblowing reports are taken seriously and acted upon once received.

It is against this background — a formally announced but legally unprotected whistleblowing policy, and internal audit units of uneven effectiveness — that this study examines the relationship between whistleblowing mechanisms and internal audit effectiveness in the Nigerian public sector, using federal, state, and local government institutions in Enugu State as its empirical focus.

1.2 Statement of the Problem

The demand for greater financial transparency, accountability, and integrity in financial reporting has placed whistleblowing at the centre of modern public financial management reform. Internationally, the framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and legislation such as the United States' Sarbanes-Oxley Act positioned whistleblowing as a core element of an effective internal control environment, and many countries have since incorporated whistleblowing provisions into their corporate governance codes and public financial management laws. In Nigeria, however, the whistleblowing policy has operated since 2016 without the legislative backing that would guarantee it permanence, protect informants from retaliation, or bind all tiers of government to a common reporting standard (Templars Law, 2025). This gap has direct implications for internal audit effectiveness, because internal audit units depend on credible, protected reporting channels to receive early warning of control failures; where whistleblowers fear reprisal, information about fraud and mismanagement is less likely to reach the internal audit function until after the loss has already occurred.

This concern is amplified in Nigeria's sub-national governments. Empirical evidence continues to show that audit committees and internal control structures operate under considerable institutional strain, with limited independence from the executives whose spending they are meant to scrutinise (Ashiru et al., 2024). Federal government institutions such as the Ministry of Finance and the major anti-corruption agencies have benefited from more sustained policy attention, awareness campaigns, and institutional capacity than their state and local government counterparts, which often lack any codified whistleblowing procedure at all (Federal Ministry of Finance, Budget and National Planning, 2024). The consequence is an uneven accountability landscape in which fraud prevention and detection capacity varies sharply from one tier of government to another, even though public funds are mismanaged at all three levels.

The existing body of research also shows a nuanced picture rather than a uniform verdict on impact. While Ezeoha et al. (2025) and the Platform to Protect Whistleblowers in Africa (2023) conclude that Nigeria's whistleblowing framework has largely failed to generate sustained citizen participation, Ogunfowokan et al. (2024) found that internal reporting intentions within Nigerian institutions can still be strong where organisational attitude and self-efficacy are favourable, regardless of the absence of a national protection law. This suggests that the effectiveness of whistleblowing may depend heavily on institutional maturity and the strength of the internal audit function receiving the disclosures — a relationship that has not been closely examined in the Nigerian public sector specifically.

Moreover, most of the earlier literature on whistleblowing in developing countries, including Nigeria, has concentrated on the banking and financial services sector, leaving the direct interaction between whistleblowing mechanisms and internal audit effectiveness in public sector institutions comparatively under-researched (Mahmoud & Damagun, 2023; Idowu & Ibrahim, 2023). Given that public institutions manage the largest share of Nigeria's resources and are frequently implicated in high-profile corruption cases, this gap constitutes a significant limitation in the literature that the present study seeks to address, using federal, state, and local government institutions in Enugu State as its empirical focus.

1.3 Objective of the Study

The main objective of this study is to examine the whistleblowing mechanism and internal audit effectiveness in the Nigerian public sector. In this study, whistleblowing policy is treated as the independent variable, while fraud prevention and internal audit effectiveness are treated as the dependent variables. Specifically, the study seeks to:

i. determine the level of implementation of whistleblowing policy among the three tiers of government in the Nigerian public sector;

ii. examine the impact of whistleblowing policy on fraud prevention in the Nigerian public sector; and

iii. assess the relationship between whistleblowing mechanisms and internal audit effectiveness in the Nigerian public sector.

1.4 Research Questions

To achieve the above objectives, the study is guided by the following research questions:

i. What is the level of implementation of whistleblowing policy among the three tiers of government in the Nigerian public sector?

ii. Does whistleblowing policy have any impact on fraud prevention in the Nigerian public sector?

iii. What is the relationship between whistleblowing mechanisms and internal audit effectiveness in the Nigerian public sector?

1.5 Hypotheses of the Study

The following hypotheses, stated in their null form, are formulated to guide the conduct of this study:

HO1: There is no significant difference in the level of implementation of whistleblowing policy among the three tiers of government in Nigeria.

HO2: There is no significant relationship between whistleblowing policy and the prevention of fraud in the three tiers of government in Nigeria.

HO3: There is no significant relationship between whistleblowing mechanisms and internal audit effectiveness in the Nigerian public sector.

1.6 Significance of the Study

This study is significant on theoretical, practical, and policy grounds. Theoretically, it contributes to the still-developing body of Nigerian literature that links whistleblowing directly to internal audit effectiveness, an intersection that recent studies treat largely as two separate subjects rather than a connected system (Badamasi & Ahmad, 2024; Mahmoud & Damagun, 2023). By examining both constructs together across three tiers of government, the study extends existing explanations of internal control failure beyond the single-institution case studies that currently dominate the Nigerian literature.

Practically, the findings will be useful to heads of internal audit units, accountants-general, and audit committees in federal, state, and local government institutions seeking to understand how the strength of whistleblowing channels affects the quality of information reaching their audit functions. It will also be useful to anti-corruption agencies, which have continued to advocate publicly for a binding whistleblower protection law (AFRICMIL, 2025), by providing empirical evidence on how the absence of such protection affects fraud prevention outcomes at the sub-national level specifically.

For policymakers, the study offers evidence-based support for the recurring calls to harmonise whistleblowing procedures across all tiers of government and to accelerate passage of a comprehensive Whistleblower Protection Bill (Premium Times, 2022; AFRICMIL, 2025). Finally, the study will serve as a reference material for future researchers, students, and institutions seeking to build on the relationship between whistleblowing and internal audit effectiveness in developing-country public sectors.

1.7 Scope and Limitation of the Study

This study examines whistleblowing mechanisms and internal audit effectiveness in the Nigerian public sector, with particular reference to federal, state, and local government institutions operating within Enugu State, including the Enugu State Ministry of Finance. The study covers the period during which Nigeria's whistleblowing policy has been in operation, from its introduction in December 2016 to the present.

The study is limited by the difficulty of obtaining detailed, first-hand information from some public sector stakeholders, particularly at the state and local government levels where formal whistleblowing structures are least developed. To mitigate this, the study relies on both primary data collected through structured questionnaires and secondary sources, including academic journals, government publications, and reports from civil society and legal advisory organisations published between 2022 and 2025, to strengthen the reliability and currency of the analysis.

1.8 Definition of Terms

Whistleblowing: The disclosure, by a current or former member of an organisation, of information about perceived wrongdoing, corruption, illegality, fraud, or hazardous activity to persons or bodies believed to be capable of taking corrective action (Ojobo, 2023).

Internal Audit: An independent, objective assurance and consulting activity designed to add value to and improve an organisation's operations by evaluating and improving the effectiveness of risk management, control, and governance processes (Badamasi & Ahmad, 2024).

Internal Audit Effectiveness: The extent to which an internal audit function achieves its assurance and consulting objectives, commonly determined by factors such as auditor independence, staff competence, management support, and the scope of audit work (Mahmoud & Damagun, 2023).

Public Sector: The complex of central, state, and local government bodies and all publicly funded or publicly controlled agencies and enterprises that deliver public programmes, goods, or services.

Fraud: A deliberate act of deception, misrepresentation, or abuse of position carried out for unlawful personal or financial gain, typically at the expense of an organisation or the public.

Internal Control: The system of policies, procedures, and organisational structures designed to provide reasonable assurance that an organisation's objectives will be achieved, its assets safeguarded, and its financial records kept accurately.

Corruption: The abuse of entrusted public office or power for private gain, including bribery, embezzlement, and diversion of public funds.

References

African Centre for Media and Information Literacy (AFRICMIL). (2025). War against corruption: ICPC, CCB canvass for whistleblower law. https://www.africmil.org/war-against-corruption-icpc-ccb-canvass-for-whistleblower-law/

Ashiru, F., Adegbite, E., Frecknall-Hughes, J., & Daodu, O. (2024). Reliability of the audit committee in weak institutional environments: Evidence from Nigeria. Journal of International Accounting, Auditing and Taxation, 57, Article 100657. https://doi.org/10.1016/j.intaccaudtax.2024.100657

Badamasi, N., & Ahmad, A. B. (2024). Mediating effect of internal auditors' ethical conduct on the relationship between usage of information technology, management support for internal audit department, and internal audit effectiveness: A conceptual framework. Gusau Journal of Accounting and Finance, 5(1). https://doi.org/10.57233/gujaf.v5i1.15

Ezeoha, A. E., Akinyoade, A., Ehrhardt, D., & Uche, C. (2025). Nigeria and the practice of whistleblowing – How not to mobilize citizens' participation in anti-corruption programme. Public Integrity, 28(1), 112–132. https://doi.org/10.1080/10999922.2025.2491254

Federal Ministry of Finance, Budget and National Planning. (2024, August 28). Federal government to strengthen whistle-blowing policy with legal framework. https://finance.gov.ng/federal-government-to-strengthen-whistle-blowing-policy-with-legal-framework/

Idowu, K. A., & Ibrahim, J. (2023). Internal audit quality and performance of public tertiary institutions in Osun State, Nigeria. Malete Journal of Accounting and Finance, 1(1).

Mahmoud, A. M., & Damagun, Y. M. (2023). Determinants of internal audit effectiveness in the Nigerian paramilitary agencies. International Journal of Research and Innovation in Social Science, 7(11), 1005–1022.

Obafemi, T. O., & Opadijo, O. (2023). Internal audit and operational performance in public teaching hospitals in Oyo State, Nigeria. International Journal of Research and Innovation in Social Science, 7(4), 1446–1458. https://doi.org/10.47772/IJRISS.2023.7520

Ogunfowokan, A. A., Garba, S. N., Orisadare, M. A., Adeleke, A. G., Samson-Akpan, P. E., Olatubi, M. O., Salau, O. R., Titilayo, A., Bull, A., & Okoro, F. (2024). Intention for internal whistleblowing to report sexual violence in higher education institutions: A Nigerian national study. F1000Research. https://doi.org/10.12688/f1000research.141545.3

Ojobo, E. (2023). A review of the effectiveness of the Nigerian whistleblowing stopgap policy of 2016 and the Whistleblower Protection Bill of 2019. Journal of African Law, 67(2), 1–20. https://doi.org/10.1017/S0021855323000098

Platform to Protect Whistleblowers in Africa (PPLAAF). (2023). Nigeria: Whistleblowers in Nigeria – Overview of the legal and policy framework. https://www.pplaaf.org/wp-content/uploads/Nigeria-2.pdf

Premium Times. (2022, December 15). FEC approves Finance, Whistleblower Bills 2022. https://www.premiumtimesng.com/news/top-news/570530-fec-approves-finance-whistleblower-bills-2022.html

Templars Law. (2025). Analysing the whistleblowing framework in Nigeria. https://www.templars-law.com/app/uploads/2025/01/Analysing-the-whistleblowing-framework-in-Nigeria.pdf

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