Date: 2021-01-18

• Uncovers $68,875,902 illegal fund disbursement to distressed Nigerian Missions

The office of the Auditor General of the Federation (oAuGF) in its 2018 audit query indicted Nigeria Social Insurance Trust Fund (NSITF), Federal Ministry of Works and Housing, Federal Ministry of Foreign Affairs, among others of awarding contracts and irregular payments/expenditures worth N41.857 billion and $68,875,902 illegal fund disbursed to distressed Nigerian Missions in contravention of extant financial regulations.

The details were contained in the 2018 audit report submitted to the Senate and House of Representatives' Committee on Public Accounts for further legislative action.

As encapsulated in the audit report seen byTribune Online, no fewer than 25 MDAs were indicted for awarding 52 contracts amounting to N18,369,595,564.47 in violation of the Public Procurement Act, 2007, ranging from disregard to due process, irregularity in payment for contracts, excessive pricing of procurements, payment for services not rendered, payment in full for uncompleted projects and other similar infractions.

They include: Nigeria Social Insurance Trust Fund – N1,399,524,563.21; University of Ilorin - N78,507,792.56; National Power Training Institute of Nigeria (NAPTIN) – N15,000,000; Federal Ministry of Works and Housing (Works Section) – N1.500 billion, N1.200 billion, and N308,111,968.18 respectively; National Theatre, Lagos - N34,786,500; Federal College of Fresh Water Fisheries Technology, New Bussa - N3,611,619; Voice of Nigeria – N13,581,771.42 and National Agency for Food and Drugs Administration and Control (NAFDAC) – N25,734,018.49.

The report also detailed records of erring MDAs indicted for irregularity in the contract award.

They are: NSITF - N5,532,435,309.68; NIMASA + N320,450,000; National Council for Arts and Culture - N48,943,489.21; Federal Ministry of Works and Housing (Works Section) - N79,500,000; Accident Investigation Bureau - N20,513,535; Voice of Nigeria - N79,992,727.50; Federal College of Agriculture, Moore Plantation, Ibadan - N23,792,621; Federal College of Agriculture, Moore Plantation, Ibadan - N193,045,133.75 and Nigerian Police Academy, Wudil, Kano - N35,000,000.

The MDAs indicted for 'Unauthorized Contract Variation' according to the audit query are: Petroleum Training Institute, Effunrun + N10,561,190; Federal University Lokoja - N233,651,008.50; Nigerian Police Academy, Wudil, Kano - N204,342,446.77; Federal College Of Agriculture, Moore Plantation, Ibadan - N39,270,000; Federal Ministry of Works and Housing (Works Section) - N2,500,000,000.

The oAuGF also accused two MDAs of 'Contract Splitting', they are; Federal Ministry of Works and Housing (Works Section) – N1,028,940,889.65 and NSITF- N290,414,287.30.

Similarly, the oAuGF queried the following MDAs over irregularities in payments/expenditure worth N23,486,881,920.49.

"We reviewed the level of compliance of MDAs with relevant rules and regulations as they relate to payment procedures and policies, as well as disbursement and utilization of public funds and discovered that a total of 72 payments amounting to N23,486,881,920.49 were made by 43 MDAs in violation of extant rules. Among the infractions N15,965,998,117.10 was expended without attaching necessary supporting documents to authenticate the payments, while a total of N4,037,929,692.16 was likely misappropriated at 5 MDAs ranging from Outstanding Payment Vouchers/Missing Payment Vouchers /Accounting Records not presented for audit.

They are: Federal College Of Agriculture, Akure - N5,717,872.20; NSITF- N6,889,132,015.65; Nigerian Hydrological Service Agency, Abuja - N15,009,532; National Council for Arts and Culture - N5,738,761.90; Nigerian Hydrological Service Agency, Abuja - N10,642,175; Federal Ministry of Finance - N98,759,299.20; Voice of Nigeria - N12,975,370; Nigerian Copyright Commission, Abuja - N6,956,652.56; Energy Research Centre, Sokoto - N34,072,592.01; Nigeria Airspace Management Agency - N1,435,772,169; Petroleum Product Pricing Regulatory Agency - N200,670,992.36; Federal University of Agriculture, Abeokuta - N39,622,903.93; University of Ilorin - N513,923,209.57.

Other MDAs found wanting of Irregular Payments are: National Horticultural Research Institute, Ibadan, Oyo State - N32,375,000; NSITF - N1,872,200,771.67; Federal University Of Agriculture, Abeokuta - N93,732,659; Federal University of Agriculture, Abeokuta - N13,293,500; National Health Insurance Scheme - N32,299,700;l National Boundary Commission - N12,057,355.25; Voice of Nigeria - N14,676,500.

The MDAs indicted of payments made without supporting documents in the 2018 audit query are: Nigerian Hydrological Service Agency, Abuja - N42,073,465; NSITF - N2,212,515,971; Ministry of Foreign Affairs - N1,600,000,000; Nigerian Hydrological Service Agency, Abuja - N483,016; University of Ilorin - N58,208,592.69; Regional Centre For International Commercial Arbitration - N26,446,602.98; Federal University of Agriculture, Abeokuta - N104,382,696.25; National Horticultural Research Institute, Ibadan, Oyo State - N800,000; Federal College of Agriculture, Moor Plantation Ibadan - N247,017,895.74; National Root Crops Research Institute - N15,499,916.98; Voice of Nigeria - N6,230,100; Nigerian Copyright Commission, Abuja - N2,500,000; Engineering Material Development Institute, Akure - N29,451,649.28; Sokoto Energy Research Centre, Sokoto - N33,226,600.28; Federal College of Forestry, Jos - N8,972,940; Financial Reporting Council - N1,500,000; Jos University Teaching Hospital - N8,572,777.25; National Film and Video Censors Board - N21,532,906; Power Equipment and Electrical Machines Development, Okene - N9,613,256.33; Federal College of Agriculture, Akure - N5,099,887.92; Council of Registered Builders of Nigeria – N7,099,900; Nigerian Airspace Management Agency – N109,637,912.10; Investment and Securities Tribunal - N3,120,000 and National Health Insurance Scheme – N72,383,000.

The audit report also queried Federal Ministry of Foreign Affairs over the illegal disbursement of intervention fund for distressed Nigerian Missions to the tune of $68,875,902.00 which was approved by the president as intervention fund for distressed Nigerian missions abroad. The sum which was in three tranches - $32,873,896.68, $28,810,217.80 and $7,191,787.52 was meant to address challenges such as; missions' indebtedness, renovation and refurbishment of missions' chanceries and residencies, and replacement of broken-down representational vehicles.

Detailed examination of the Ministry's accounting records, however, revealed the following anomalies: A sum of N268,814,121.20 was diverted from the first tranche of the intervention fund and was expended on "exigencies and sundry items," part of which the sum of N101,230,676.95 which, according to the documents presented by the Ministry, was for bank charges on remittance of funds by the CBN.

No explanation was given, nor documents released justifying how the balance of N167,583,444.25 was utilized.

Documents evidencing the disbursement of the second tranche of $28,810,217.80 such as distribution breakdown of the funds to the beneficiary missions, expenditure returns for money received, and request for settlements of indebtedness from missions were not presented for audit verification. While a request for the third tranche of $6,691,787.52 was made, the Ministry got approval for the sum of $7,191,787.52 which was later released, giving an excess of $500,000.

The Ministry, however, approved the release of the excess to the Consulate-General of Nigeria in Dubai, which was originally not among the missions in need of intervention funds.

The issue had been communicated to the Permanent Secretary vide Management Letter Ref No. OAuGF/MAD/AI/2017/Vol.1/1 on 8th May, 2019 followed by two reminders vide Reference No. OAuGF/MAD/AI/2017/Vol.1/1b and OAuGF/MAD/AI/2017/Vol.1/1c dated 3rd July, 2019 and 22nd August 2019 respectively. Risk Failure to apply funds specifically for the approved purposes could lead to misapplication of public funds and possible diversion.

According to the report, there was no response from Federal Ministry of Foreign Affairs' management as at the time of our report.

In its recommendation, the oAuGF recommended that the Permanent Secretary should to render full account as to how the sum of $68,875,902.00 was disbursed to the benefiting missions, failing which sanctions stated in FR 3115 should apply.

The report also queried Nigerian Embassy Dublin, Ireland over unauthorized virement of €91,150.49 from one subhead to another without approval by the National Assembly and wrongful expenditure of €95,506.76 from the mission revenues, illegal payment of €231,920.07 through Immigration Department's account; as well as the sum of N5,251,070,000 released by the Accountant General of the Federation through the Development Fund General Warrant for its projects and programmes for 2016/2017 financial year, out of which only N2,125,250,000 was budgeted for by the National Assembly as contained in the Appropriation Act and expended during the period under review. The balance of N3,125,820,000 which was released to the Ministry during the period had no virement approval from NASS or other relevant documents to authenticate its usage.

In the same vein, oAuGF also queried N4,784,581.15 irregularities in the procurement of goods and demanded the refund of the sum of N229,797,761 for the supply of 22 units of HP blade servers for Morpho BSS upgrade paid by NIMC out of which N103,408,992.45 representing 45% of the contract sum as against the mobilization fee of 15% was vide payment voucher number NIMC/01/016 CA/18 dated 19/01/18, in breach of extant financial regulations.

The oAuGF in the report, specifically expressed grave concern over the ineffective budget execution process to a large extent, especially regarding capital expenditure, severe funding constraints of oAuGF.

"Although, we have noticed an improvement since my last report, there are still violations of statutory financial reporting obligations by Parastatals. Stringent sanctions, including withholding financial releases and sanctioning of the Chief Executive Officer, should be imposed on defaulting Agencies who do not render timely accounts as provided in the Constitution, Financial Regulations, and other relevant laws," the report stated.