October 26, 2021

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How dodgy accounting lands MDAs in trouble

The audit report by the Public Accounts Committee revealed bizarre spending by govt agencies ranging from sales of official vehicles at ridiculous prices and salary payments to dead and retired officers, to agency fee for rent renewal and estacodes for unattended overseas workshops. The audit queries revealed extra-budgetary expenditures made by Ministries, Departments and Agencies (MDAs) of the federal government.

For over a year, the Senate Public Accounts Committee had been investigating expenditures of federal government agencies from 2015 to 2018 based on audit reports by the Auditor-General of the Federation.

Last week, the panel presented the report of its investigation into the Federation Account for the year 2015 to the Senate.

The committee’s chairman, Senator Matthew Urhoghide (PDP, Edo), in his presentation, disclosed that 114 MDAs were queried in the 2015 audit report, out of which 59 had their queries sustained after the probe. The reasons? Head-scratching expenditures such as:

Payment of salaries to retired, dead officers

The Ministry of Foreign Affairs paid salaries to five retired staff amounting to N4.3 million, according to an audit report.

But the ministry, in a written response, said only one officer was overpaid for six months and that a letter has been written to the Pension Fund Administrator for refund.

The Senate committee observed that there was no documentary evidence to show that four officers did not collect salary after retirement. It, therefore, recommended that the Schedule Officer should be identified and sanctioned.

Similarly, the Code of Conduct Bureau (CCB), according to audit query, continued to pay N242,756 as monthly salary to a staff who retired months before from the Bureau’s Kaduna office.

The Bureau paid a total of N971,061 to the officer up till December 2015, whereas the officer retired on 25th August 2015. CCB, in its response, said the retirement benefit of the affected officer will be used to recover the money through PENCOM and PFA.

In another query, the report said CCB paid N128,714, being monthly gross earning amounting to 772,289, to an officer six months after his demise.

N90m vehicles sold for N2m

In the Ministry of Niger Delta Affairs, however, there seemed to be a bonanza going on with six vehicles worth N90 million being sold at the “ridiculous sum” of N2.1.

The audit report said the vehicles were purchased in June and August 2014 and sold in May 2015. The report did not mention who bought the vehicles.

In its response to the audit query, the ministry said the Federal Ministry of Works and Housing was invited to evaluate the vehicles before they were sold.

The Senate committee, after investigation, said the evaluation report of the Federal Ministry of Works did not include the newly-purchased vehicles.

The panel directed that the sum of N61.4 million, being the understated disposable value of the vehicles, be recovered and paid to the Treasury.

Similarly, the Senate panel said it found that the Federal Mortgage Bank of Nigeria, FMBN, sold three official vehicles worth N49 million in 2015 to its former Managing Director for N4.9 million in the same year of purchase.

Also, out of a fleet of 43 jeeps, six were unaccounted for at the Public Complaints Commission, therefore exposing government assets to risks of loss and contravention of financial regulations.

The commission said it had provided details of the distribution of the six vehicles in question, documents the panel said it could not verify.

The audit report said four vehicles belonging to the National Health Insurance Scheme (NHIS) were purportedly taken away by former officers and were not retrieved.

NHIS told the Senate Public Accounts Committee that the file containing details of the vehicles were with the Department of State Security and that it had requested the return of the vehicles.

But the Senate panel said its investigation revealed that each of the vehicles was taken away by a former chairman, House of Representatives Committee on Health; former Minister of Health and former Executive Secretaries of NHIS without paying for replacement value.

N23m for Sallah/Christmas largesse

While cars are missing left and right in some ministries, in others, like the Ministry of Petroleum Resources, some N23.6 million from the capital project funds was diverted to procure Sallah/Christmas welfare package to staff, according to the audit report.

The payment was approved by a former permanent secretary, who “obliged reluctantly” to prevent strike action by the labour union, the ministry explained.

Security allowance for college provost

The sum of N250,000 was deducted monthly as a security allowance for the Provost of the FCT College of Education, Zuba, from the students’ accounts, which is part of the Internally Generated Revenue, the report said.

Annually, the school authority forked out N3million without authorization for this purpose, which the provost explained was for security services.

Unconvinced, the panel recommended that the provost refund the money to the Treasury.

NPA’s labour union pocketed N38m

The Nigerian Ports Authority (NPA) was queried for “illegally” spending N38 million to fund the activities of its labour union. But NPA explained that there was a budgetary provision for the union, a claim the Senate panel said has no evidence and therefore recommended refund.

Excess salary funds converted to productivity bonus

There was also an incident of dodgy accounting at the Rural Electrification Agency, which the report discovered converted N14 million excess release of salary funds to productivity bonus for staff members instead of returning it to the treasury.

The agency explained that this was a corporate decision taken by its management. However, the Senate committee branded the decision illegal and recommended that the management should be referred to the Police for prosecution.

N7.2m agency fee for rent renewal

At the Nigerian Copyright Commission, it was discovered that the commission doled out N7.2 million as an additional agency fee for renewal of rent.

The commission’s explanation that the fee was outstanding debt for the previous year, did not convince the Senate committee which ordered the recovery of the sum.

Unexecuted contracts gulped N24.3m

The Niger Delta Basin Development Authority was queried overpayment of N24.3 million for contracts not done.

The audit report listed the unexecuted contracts to include the construction of boreholes worth N9.2 million in Obio/Akpor LGA of Rivers State; N3.8 million borehole project in Ekwetorlor, Delta State and N11.3 million contract for the rehabilitation of Oplo Epie central water projects in Yenagoa, Bayelsa State.

The Senate panel directed that the agency’s Head of Account, who approved the money, be sanctioned, and the contractors made to refund the money, blacklisted and referred to the anti-graft agency for prosecution.

Foreign travels despite ban

The Nigerian Bulk Electricity Trading Plc (NBET), the audit report said, expended N95.3 million on overseas training in disregard to the presidential directive, which in February 2014 banned international training.

But NBET said its development and capacity plan was already approved and implemented before the ban.

However, scrutiny by the panel showed that course fees were paid between October and November 2014, while the ban had taken effect in February that year. It directed that the company refund the money to the government purse.

Cleaning allowances for Law school staff

The Council of Legal Education (Nigerian Law School), Abuja, in the report, was asked to produce authority for the payment of N34.3 million as provision and cleaning allowance to staff in 2013.

The Director-General responded that the cleaning allowance was a generic term for expenditure incurred on staff to enhance the performance of their duties.

But the Senate Committee said the council lacked the power to approve such allowances and directed that the funds should be refunded.