Challenged by continuous dwindling resources and biting economic recession, the Federal Government Thursday reeled out a number of tough measures aimed at boosting its independent revenue including referring officials of some agencies to Economic and Financial Crimes Commission (EFCC) for prosecution over misuse of public funds.
It also decided to reduce outrageous salaries and allowances of agencies paying beyond the recommended threshold of National Salaries Incomes and Wages Commission.
Minister of Finance, Mrs Kemi Adeosun said report of audit panels constituted to probe the books of Federal Government agencies between 2010 and 2015 showed that in the 33 agencies already submitted, there were evidence of substantial non-compliance with Fiscal Responsibility Act (FRA)ww 2007.
Findings include non–remittance and under-remittance of operating surpluses due to the consolidated revenue fund; operating without an approved budget; overstating of budget and spending above budgeted amount; underreporting of revenues; making payments without invoices and absence of payment receipts; failure to retire cash advances; and loans and grants to parent companies without prior approval.
Adeosun added that the audit findings also revealed poor book keeping; failure to reconcile accounts and existence of irreconcilable differences; lack of a fixed asset register and sale of assets to staff; fixed asset register not updated with all items purchased; purchase of fixed assets directly from internally generated revenues; inadequate internal audit process and weak internal controls; failure to submit audited financial statements; and payroll fraud and exaggeration of payroll costs.
Auditors also found evidence of overpayment of staff salaries and abuse of personnel grants; unapproved monetisation of medical and other allowances; staff advances and board members’ allowances in excess of approved limits; non-compliance with the Public Procurement Act (PPA) 2007; and failure to convert to IPSAS accounting.
The Minister said 33 agencies have already been audited while the process was going on in others.
According to her, of the 33 agencies already audited, N450 billion was discovered to have been illegally withheld from remittance into consolidated revenue fund of the Federal Government by 17 agencies.
The 17 agencies include Central Bank of Nigeria, Nigeria Shippers Council, Nigeria Export Promotion Council, National Health Insurance Scheme, Nigeria Civil Aviation Authority, Nigeria Communication Commission, Nigeria Postal Service, National Information Technology and Development Agency and Nigeria Television Authority.
Others are Bureau for Public Enterprises, National Pensions Commission, Nigeria Bulk Electricity Trading Plc, Raw Material Research & Dev. Council, Nigeria Ports Authority, Nigeria Export Processing Zones Authority, Federal Radio Corporation of Nigeria and Council for the Regulation of Engineering.
“Some of these audit reports are going to be reported to EFCC. some of the audit findings are so serious that they will be transferred to the EFCC. Remember that Ministry of Finance is not a prosecuting agency. Ours is just to investigate and then we hand over to relevant agencies.”
And in order to curb reckless spending and increase independent revenue, Adeosun said she has increased the number of government agencies required to comply with the strict provisions of the FRA including remitting 80 per cent of their operating surpluses.
“A Circular on the inclusion of 92 additional corporations, agencies and government owned companies to the schedule of the Act was issued on November 21, 2016.”
Also, in order to ensure that all government agencies submit a budget to be approved by the National Assembly and to improve the quality of the budgeting process, “a circular was issued requesting submission of estimates of revenues and expenses for the next three financial years, annual budget (IPSAS compliant); and projected operating surpluses for review and approval.
A review team has been set-up to evaluate submitted estimates before budget submission to the National Assembly while the circular on this was issued on the November 22, giving the agencies seven days to comply.
“Agencies that do not review and approve their budgets as advised will be restricted to payment of salaries until the budget is regularised. This circular is backed by an Executive Order of Mr President.”
She added that another circular was issued on the approved template for the computation of operating surpluses.
“Non-allowable expenses in the computation of operating surpluses include: salaries and staff loans in excess of approved scale by National Salaries, Incomes and Wages Commission; monetisation of medical and other allowances; business class travel for officers other than Chairman and CEO, expenditure in excess of approved limit; and donations to individuals, political and charitable organisations.
“Additional disclosure requirements include: expenses incurred on behalf of supervisory or regulatory agencies; salaries and allowances paid to Board of Directors, Governing Council and Commissions outside the approved amount; donations, sponsorships, gifts and their beneficiaries; and assets sold or transferred to staff or Board Members.
Recovery Committee chaired by the AGF has been set-up to recover the outstanding N450 billion operating surpluses including: bilateral discussions; quarterly revenue performance monitoring; and impromptu visits.
Because of their peculiar natures, a new financing model will also be instituted for universities and hospitals taking into consideration their funding model and requirement for better controls and improved service delivery.
Since the circulars were released, Nigeria Shippers Council have remitted N640 million.
She disclosed that total independent revenues generated between January and October 2016 is N272.03 billion with projected increase to N811.03 billion “as we recover amounts owed and drive greater compliance going forward.”
Presently, demand notices have been issued to affected agencies for the payment of outstanding operating surpluses while the same agencies have been invited to a meeting on December 6, where they are required to submit a repayment plan or face appropriate sanctions including deduction of amount owed directly from TSA balances.
“We have been looking at their TSA sources to see if we can remove the monies directly. In the past they were keeping these monies in the banks. Some agencies actually have the money and it is just a question of paying, but for those who do not have the money, we are going to work with them, on how the monies can be repaid.”
Adeosun explained that the executive was working very closely with the National Assembly on this.
“It’s a joint national effort. And we have said so at the beginning that with where the economy is right now, we must make every naira count. So, we are carrying the National Assembly along very closely and that is why they are supporting us by saying that if an agency does not get its budget approved, does not deserve to run a budget.
“They will only be allowed to pay salaries because it simply means that such agency is working outside any form of control.
“Why would any agency run without a budget? It’s wrong because it is public money. That means such agency could literally do anything it wants. Those budgets are supposed to have come in since July according to Fiscal Responsibility Act and any agency that does not want to find itself in such a situation should do the right thing.
“Now the total amount that agencies collect is about N1.5 trillion and that is 25 per cent of our total budget. We cannot afford to have that kind of money outside of any control, outside of any scrutiny and with no sanction if you don’t comply with the rules.”