Andy Asemota

The Senate has intensified efforts to curb the menace of financial infractions in federal Ministries, Departments, and Agencies (MDAs), in line with global trends in the audit process and dwindling revenue from the mainstay of the nation’s economy -the oil sector.

Before the upper legislative chamber proceeded on its ongoing recess, it received the summary of the recommendations of the Public Accounts Committee (PAC) on the Reports of the Auditor-General of the Federation (AUGF), on the accounts of the federation for the year ended December 2015, and took several far-reaching steps aimed at fighting misappropriation and misallocation of public funds in the country.

Senate President, Ahmad Lawan, while receiving the report, appreciated the panel’s efforts at tackling the erring MDAs and assured of the Red Chamber’s readiness, not only to publish the names of the affected agencies with queries that were sustained by the Senate but also to drag them to the Economic and Financial Crimes Commission (EFCC) for investigation and prosecution.

Against this background, the chairman of SPAC, Senator Matthew Urhoghide, in an interview with newsmen, said the days are gone in Nigeria when funds allocated to MDAs were distributed to persons and groups without commensurate return of value.

Urhoghide revealed that the Auditor-General had queried 114 MDAs in 2015, out of which only 84 made submissions and appeared for defense before the committee, while 21 MDAs sent written responses but didn’t appear.

The committee thus analyzed their reports and made written appropriate recommendations.

The senator representing Edo South Senatorial District affirmed that seven agencies neither made submissions nor appeared before the committee, while two others reported that either EFCC or ICPC or both were in possession of their documents, thereby making it difficult to make any meaningful defense against the queries.

According to  Urhoghide, among the MDAs that appeared before the committee, or had their submissions reviewed, 46 had all their queries vacated and 59 had their queries sustained, with recommendations for the consideration of the Senate.

Among the recurring scenarios in the operations of the MDAs with regards to the observance of extant rules and guidelines as well as interagency relations and procedural violations prevalent in the queried MDAs, were that some compelled the committee to impose sanctions on the erring MDAs, including irregular non-remittance of Internally Generated Revenue (IGR) by revenue-generating agencies and other agencies in the financial and economic sector, as required by law.

Others include high incidences of contravention of approved N200,000 threshold for cash advances by MDAs, due largely to prevailing market realities, thus compelling Urhoghide to recommend the need for a review of some provisions of the nation’s financial regulations and extant circulars by the relevant bodies, to meet up with the present realities.

The committee also uncovered failure to retire granted personal advances within the financial year; diversion of government property to private use; rampant cases of non-performing loans, contract splitting to circumvent approved threshold, and avoidance of procurement process; award of contracts to incompetent contractors; non-release of documents to auditors; abandoned projects, and the need for chief executives and accounting officers of parastatals to constantly get acquainted with the provisions public financial rules and laws to reduce the incidences of extra-budgetary expenditures and virement without the National Assembly’s approval.

To this end, he highlighted case-by-case infractions of the erring MDAs for appropriate sanctions.

Top on the list was the irregularities uncovered in investments and other cash assets worth N1,127,180,992,109, including non-placement of share certificates of quoted companies with Central Security Clearing System Ltd.

The committee, according to the lawmaker, recommended that the Accountant-General of the Federation (AGF) should provide the authorities for all the additional and disposal of investments, share certificates of all the additional investments, and disclose information on Crown Agents investment funds, the Infrastructural Bank rights issue, and double-recording being corrected.

The long list of infractions included unretired advances involving 39 MDAs; inconsistent exchange loss difference on external loans; internal loans made from other funds; failure to deduct withholding tax; non-certification of direct deductions from the Federation Account to off-set debts owed by states, and the Federal Capital Territory (FCT) by the Auditor-General of the Federation of N88,924,582,615.

According to the lawmaker, the panel recommended that the office of the AGF should immediately stop such off-set from the Federation Account, without the certification of the AUGF, otherwise, such practice would not be accepted as valid.

The panel also uncovered a can of worms in Federation Accounts revenue for 2015.

From the FAAC records, Urhoghide disclosed, the total revenue inflows from the collecting agencies – NNPC, DPR, FIRS, NCS, were put at N6,001,031,479,562.62, but the sum of N865,448,552,694.78 was deducted by NNPC, which represented the Joint Venture Cash Call (JVC), leaving a balance of N1,577,447,228,355.75,  which was paid into the Federation Account.

He added that the deduction made from revenue collected was in contravention of Section 126 of the 1999 Constitution, as amended.

On the way forward, the committee recommended that the NNPC should ensure that all money accruing to the Federation is promptly paid to the Federation Account, without any deduction, in line with the above constitutional provision, while the Federal Government should agree on a percentage to be given to NNPC as cost of collection, as it is being done to the Nigerian Customs Service (7%) and Federal Inland  Revenue Service (4 percent of non-oil revenue).
On the month-by-month details of crude oil sales proceed amount paid into the Federation Account and amount withheld by NNPC for the period (January to December 2015), which exposed under-remittance of revenue from Domestic Crude Oil Sales by the NNPC estimated at N3,878,955,039,855.73, the  Senate panel cautioned that the NNPC should henceforth not only remit all amounts due to the Federation Account but also desist from further deduction at source, while FAAC or any other approving authority should, as a matter of urgency, approve an agreed percentage which should be allocated to NNPC monthly as the operational cost to ensure that their operations are not adversely affected.

Still, on the oil sector, the panel recommended that the Petroleum Products Pricing Regulatory Agency (PPPRA) should immediately recover the outstanding sum of N1,596,803,859.97 from indebted oil marketers and show proof of recovery of the amount overpaid to the oil marketers.

Apart from the revenue from the petroleum sector, the committee also addressed the N12,137140,361.62 outstanding collection from solid minerals not remitted to Federation Account but warehoused in an account maintained by the CBN.

It stressed that FAAC should fix a percentage to be allocated to the mining and cadastral office as a cost of collection, as is currently applicable to NCS, DPR, and FIRS.

This, they said, would likely motivate an increase in revenue from solid minerals, and guard against wastage.
The summary of the recommendations of the Senate committee on the annual report of the AUGF on the accounts of the federation for the year 2015 showed that the 59 MDAs whose queries were sustained by the Senate include following federal ministries – aviation; water resources; foreign affairs; labor and productivity; information and culture; power; works and housing; environment; Niger Delta affairs; petroleum resources; youths and sports; and science and technology.

Among the affected departments and agencies is Nigerian Investment Promotion Commission; National Planning Commission; Financial Reporting Council of Nigeria; Bank of Agriculture Limited; Federal Mortgage Bank of Nigeria; Standard Organisation of Nigeria; FIRS; Petroleum Training Institute, Effurun; Bureau of Public Enterprises; National Board for Technical Education; Alvan Ikoku College of Education, Owerri; Modibo Adama University of Technology, Yola; University of Lagos; University of Ilorin; University of Uyo, and Federal University of Technology, Akure.

Others include Niger Delta Basin Development Authority; Nigerian Port Authority; National Identity Management Commission; FCT College of Education, Zuba; Nigerian Army; Nigerian Law Reform Commission; Public Service Commission; Nigerian Security and Civil Defence Corps; Code of Conduct Bureau; National Population Commission; Public Complaints Commission; Nigerian Postal Service; Nigeria Bulk Electricity Trading PLC; Small and Medium Enterprises Development Agency of Nigeria; National Hospital, Abuja; National Health Insurance Scheme and NAFDAC.

Detailed recommendations of the panel are lengthy, but the summary of queries against some agencies, for instance, National Agency for Food Drug Administration and Control (NAFDAC) and National Health Insurance Scheme (NHIS) were quite revealing to say the least.

The committee recommended, among others, that the NHIS should pay into Consolidated Revenue Fund (CRF) the sum of N3,716,806,388 invested in fixed deposit account without the approval of the Accountant-General of the Federation.

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It also directed the scheme to remit the sum of N100,958,369.61 to FIRS, being the Pay-As-You-Earn (PAYE) that was not deducted from taxable categories of allowances paid to the staff of the agency.

On the other hand, the panel also enjoined NAFDAC to recover N87,589,133.76, being the WHT and VAT which the agency failed to remit to FIRS  in line with the provisions of financial regulations.

The committee directed that the agency should equally recover the N53,399,281cash advance granted to staff, in excess of N200,000, contrary to the provisions of the financial treasury circular.