Non-remittance of N450bn: FG seeks prosecution of 33 agencies, forwards audit reports to EFCC

THE Federal Government is seeking prosecution of 33 of its agencies over non-remittance of N450 billion revenue generated between 2010 and 2015.

The Minister of Finance, Kemi Adeousun, made the announcement, yesterday, in Abuja at a news conference. She said an audit had been carried out on the agencies in compliance with the Fiscal Responsibility Act, FRA, 2007. According to her, a Demand Notice has been issued to the affected agencies for their Payment Plans, which must be complied with within seven days. Adeosun said that a recovery committee, headed by the Accountant General of the Federation had been set up to recover the money from the agencies. Mrs. Adeosun noted, however, that some of the agencies had returned various sums, and that N640 million had been received from the Nigeria Shippers Council, NSC. “The total independent revenue generated between January and October, 2016 was N272.03 billion but there is a projected increase to N811.03 billion as we recover amounts owed,’’ she said.




Affected agencies The affected agencies include the Nigerian Communications Commission, NCC; Nigerian Ports Authority, NPA; Corporate Affairs Commission, CAC; Nigerian Maritime Administration and Safety Agency, NIMASA; Nigerian Export-Import Bank, NEXIM; Federal Airports Authority of Nigeria, FAAN; National Open University of Nigeria, NOUN; Nigerian Railway Corporation, NRC; West African Examination Council, WAEC; Joint Administrations and Matriculation Board, JAMB; and National Hospital, Abuja. Also affected are Industrial Training Fund, ITF; National Broadcasting Commission, NBC; Nigeria Television Authority, NTA; Nigeria Immigration Service, NIS; Federal Mortgage Bank of Nigeria, FMBN; National Teachers Institute, NTI; University of Lagos Teaching Hospital, LUTH; University College Hospital, Ibadan, UCH; National Orthopaedic Hospital, Igbobi, Lagos; University of Lagos, UNILAG; University of Nigeria, Nsukka, UNN; Ahmadu Bello Teaching Hospital, ABTH; National Agency for Food and Drug Administration and Control, NAFDAC; National Centre for Women Development, NCWD; Ahmadu Bello University, Zaria, ABU; Nigeria Shipper’s Council, NSC; University of Benin, UNIBEN; University of Ilorin, UNILORIN; University of Ibadan, UI; and Bayero University, Kano, BUK. Adeosun said further that a circular on the inclusion of 92 additional corporations, agencies and government-owned companies to the schedule of the Act had also been issued. According to the minister, the exercise is an ongoing process and all agencies will eventually be audited. FG forwards audit reports to EFCC Mrs. Adeosun said that some of the audit reports had been sent to the Economic and Financial Crimes Commission, EFCC. “The financial regulations are very clear, where audit reports have indicted some of the officers, some of these audit reports are going to the EFCC. “Some of the audit findings were so serious that the decision was taken that some of those particular reports must go to the EFCC. ‘’Remember that we are not a prosecuting agency, ours is to investigate and then we hand it over to the relevant agencies,” she said. What the auditors found She said the audit revealed that there was a lot of non-remittances and under-remittances of operating surpluses and that some agencies were operating without an approved budget. The minister added that there were overstating of budget, spending above budgeted amount, failure to reconcile accounts and existence of irreconcilable differences. “The audit also showed that there was under-reporting of revenues, failure to submit audited financial statements, payroll fraud and exaggeration of payroll costs, over-payment of staff salaries and abuse of personnel grants,” she said. Her words: “What was consistent was non-remittance or under-remittance of revenues due to the Consolidated Revenue Fund. Many agencies have been operating without any approved budget and where there were budgets, they were not complied with. They were spending in excess of the budgeted amounts. “We found under-reporting of revenues. Payments were made without vouchers and payment receipts in certain cases. Cash advances were given to staff without retirements. Loans and grants were given to parent ministries and other entities without approval. “There was failure to reconcile accounts. There were irreconcilable differences in a number of agencies. There was no fixed assets register in many agencies and we found evidence of assets being purchased and then sold to staff at significant discounts. There were purchase of fixed assets direct from IGR (Internally Generated Revenue), inadequate internal audit and weak internal controls. Many agencies have no audited Financial Statements. We found exaggerated payroll costs. Also we found excess staff salaries- salaries being paid in excess of approved salaries by the National Salaries, Incomes and Wages Commission. “We found unapproved monetization of medical allowances including foreign medicals for some board members. Staff advances to staff and board members were in excess of approved limits. Non-compliance with the Public Procurement Act.” Recovery steps According to the minister: “We have issued a circular requiring every agency to submit their estimates for the next three years, and their projected operating surplus. We have set up a review team to review these estimates before they are submitted to the National Assembly to make sure they are in line with the federal government objectives. The agencies were given seven days to comply.’’ Mrs. Adeosun warned that agencies must have their budgets passed by the National Assembly before they would be allowed to incur any expenditure with the exception of payment of salaries. Her words: “Agencies that do not get their budgets approved by the NASS will be restricted to payment of salaries only until their budgets are approved. We have the National Assembly’s support that if an agency does not have its budget approved; it really has no business spending. It is wrong for an agency to operate without a budget. It is public money and that means that the agency can do literally anything it wants and that is wrong. It is for those agencies who know that they do not want to be in the situation where they can only pay salaries to do the right thing, everybody knows the rule.” She added: “A template has been issued by the Accountant –General of the Federal on what is allowable expenditure out of the operating surplus. No more salaries in excess of the figures approved by the Wages and Salaries Commission. No more monetisation of medical and other allowances. Business Travel for only the Chairmen and Chief Executive Officers. No more donations to individual and other organizations. “Henceforth, the following transaction must be disclosed in the notes to Financial Statements – any expense incurred on behalf of supervising ministries or other regulatory agencies, donations, sponsorships and gifts and the beneficiaries of such donations and gifts. Any assets transferred or sold to staff and board members must be disclosed.’’ She said that a new financial module would be prepared for hospitals and universities in order to enable them spend their money prudently, “to get better service, better value for the students rather than just spending the money for the benefit of the staff.” The minister said that agencies that defaulted had been asked to come up with their repayment proposals to see how they could be made to repay the money. “We know that in some cases money would have already been spent so they will now give us a proposal of how they are going to repay but the money has to be paid. We are also looking at their Treasury Single Account (TSA) to understand how much money they actually have because in some cases, these surpluses are in their accounts. Our plan is not to grind to a halt the activities of any agency but to institute fiscal discipline in all the agencies,” she stated.

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