By Musikilu Mojeed and Festus Owete
May 11, 2009 02:12PMT
The Auditor General of the federation fires a damning report to the National Assembly asking it to judge itself on corruption that runs from the heights of the presidency to the remotest corners of government work.
According to a 156-page report, currently before the National Assembly and exclusively obtained by NEXT on Sunday, after over two months of intensive investigation, several billions of naira allocated for recurrent undertakings, infrastructural development and government business, are lost to financial malfeasances perpetrated by public servants in collusion with fraudulent politicians and contractors.
A pervasive culture of graft
In the parade of odium between the presidency, the National Assembly, and the Customs department, for instance, the report claimed that the presidency was by far the dirtiest institution, leading in point blank stealing of N4.83 billion, closely followed by the Senate where N3 billion disappeared in a black hole of sleaze and the House of Representatives where N2.2 billion simply vanished from the books.
In the Customs department, according to the report, N724 million was stolen in that one year period alone. During this review period, the report claimed that these huge public resources went down the drain through outright theft of funds, inflation of contract costs, poor documentation of financial transactions and payment for non-existing contracts and supplies by civil servants and politicians.
Ignorance of the report
The National Population Commission, NPC, according to the report awarded and fully paid for 23 contracts amounting to about N551million but that the contracts were never executed. It also claimed that six other contracts amounting to about N81million and awarded to five contractors for the supply of enumeration and other census materials were only partially executed.
An official of the commission who pleaded not to be named however said the NPC split and awarded the N162.3million contracts for the supply of indelible ink markers to six companies after it got due process certificate from the Bureau of Public Procurement to do so during the preparations for the 2006 population Census.
He said after five of the six winners of the contracts were unable to deliver as at February 2006 as specified in the contract agreement, the commission made representation to the President, who he said approved that the contract be re-awarded to a single contractor at the same price.
However, in its claim against the police, the report said that apart from failing to remit to revenue authorities the sum of about N60million it deducted from contractors as Value Added and Withholding taxes, the Nigerian Police said it spent N7million for the rehabilitation of a mechanical workshop in Damaturu, Yobe State.
The future of the report
Although the Constitution stipulates that the reports should be considered by the committee responsible for public accounts in the National Assembly, this yearly ritual has never resulted in any significant sanction.
THE Position of the Law
According to Section 85(5) of the 1999 Constitution, the Auditor-General of the Federation is expected to pass the audited account of government spending in each financial year to the National Assembly 90 days after receiving a financial statement from the Accountant-General’s office; while the Accountant-General, according to the law of the land as stated in the Financial Control and Management Act, is mandated to furnish the Auditor-General with the appropriate financial statements but as NEXT on Sunday found out, successive administrations in the country have repeatedly dropped the ball on this critical challenge of accountability by simply allowing impunity to reign.
Examples of Sectoral Looting
Government-owned institutions of higher learning and their supervisory bodies, according to the Auditor General of the federation, were major culprits of the financial recklessness which characterized public sector spending in the 2006 fiscal year.
The Board, auditors say, also failed to justify the disbursement of N3.4million it deducted from the allocations of seventeen polytechnics to cater for meetings held with the National Assembly.
Benue State University spent N2.2million from the Education Trust Fund account on paying for recharge cards and Turaya set for the vice-chancellor, the repair of a faulty car and fuelling, the Federal Polytechnic, Bida, reportedly spent N3.15million on overhauling 500KVA power generating set when a new one could be purchased for less than N5.1million. The institution also, curiously, awarded a N1million contract for the renovation of its Abdulkadir Kure Complex to a printing company.
The Ministry of Education was also unveiled as a cesspit of financial recklessness. At the Federal Government College, Ugwolawo, Kogi State, it was observed that food items valued at N3.2million were not supplied to the college store.
An audit examination of relevant documents revealed that store receipt vouchers were falsified to facilitate payment to the contractor/supplier. The same school also reportedly withdrew N2.4million and paid, between 16th and 19 December 2006, for services that were not rendered, ostensibly to exhaust the vote before the end of the financial year. Another N13.5million meant for contractors was curiously paid in cash in the name of the principal, instead of by crossed cheque in accordance with the Financial Regulation No.616.
The Presidency did not fare any better. The Auditor-General has asked the Principal Secretary to the President to explain why the N22.3million contract for the furnishing of the former Protocol Office was awarded to the highest bidder.
The Auditor-General also demanded explanation on why only two contractors were invited to quote for the supplies. Apart from not being able to produce 79 vouchers with which it spent about N8million, the State House was also not able to convince auditors that it followed due process in the award of the N5.6million contract for the supply of computers and accessories. Besides, there were no store receipt voucher, contract agreement and an invoice to authenticate the transaction.
The National Assembly, the auditors say, also have questions to answer regarding the manner in which it disbursed public funds during the fiscal year under review. Forty Senators have refused to retire about N1.62billion advanced to them between January and December 2006,
As it is in the Senate, so it is in the House of Representatives. According to the audit report, 30 lawmakers and 37 members of staff of the House got cash advances of almost N222 million, but have so far failed to retire the payments.
The House could also not produce 150 vouchers through which it purportedly paid out about N990 million for scrutiny by auditors, who also faulted the payment of N7.5million to an official of the House as refund of out of pocket expenses to members of the House Committee on Sports.
The Auditor-General has also asked the Clerk of the National Assembly, Nasir Arab, to explain why the House overdrew its overhead cost for the year by about N1.2billion, resulting in bank charges amounting to about N34million. The Auditor-General of the Federation has therefore directed Mr. Arab to recover the questionable payments from the beneficiaries.
At the Ministry of Defence, auditors uncovered an overpayment of N11.5million on the payment made for the purchase of 26 units of Peugeot Motor Vehicles for the Nigerian Navy. The supply was made in two consignments of twenty-one and five.
The report claimed that the supplier demanded an unjustified payment of Value Added Tax that it claimed was not included in the original price quoted for the vehicles.
Auditors also detailed sordid stories of misappropriation and outright stealing of public funds at the Ministry of Interior under which the Department of National Civic Registration, the Nigeria Immigration Service and other agencies are domiciled.
Between December 31, 2004 and December 31, 2006, the Department of National Civic Registration purportedly raised 30 payment vouchers totaling N12million purportedly as staff salaries and allowances, whereas the affected staff had been previously paid for the same period through their banks.
Agriculture and Environment
At the Federal Ministry of Agriculture, auditors found that almost N38 million was diverted from the Strategic Grain Reserve Revolving Fund, to settle expenses relating to an International Cocoa Summit and the training of Engineers, which should have been appropriately charged to the National Cocoa Development Fund.
Moreover, these payments were made without seeking any approval from the Federal Ministry of Finance. The amount involved has not been reimbursed to the appropriate Strategic Grain Reserve Fund. In addition, a certain N23million contributed by various stakeholders (states and organizations) to the Cotton Revolving Fund could not be traced to any record in the ministry.
The sum of over N3.4 million was refunded to two members of staff as out of pocket expenses incurred by them on unspecified jobs. The jobs could not be verified; and relevant documents were not produced to confirm performance. The payments could not therefore be accepted as proper charges against public funds. Consequently, the amount should be recovered from the affected staff and evidence of recovery forwarded for audit verification.
The Ministry of Environment and its agencies were also found to have indulged in monumental financial irregularities. Prominent among these is the payment of N4million from its overhead cost account to five companies purportedly for executing various jobs relating to repairs, renovations and installations.
Investigations by auditors however revealed that none of the companies executed the jobs for which they were paid. At the housing and urban development sector of the ministry, contracts were allegedly split as a way of circumventing provision of Financial Regulation No.2928 and 99 payment vouchers totaling N84.5million were raised.
The ministry also claimed it spent N555, 000.00 on the printing of Treasury Forms, which could, however, not be traced. Another N262, 000.00 collected as revenue from the sales of application forms for purchase of houses were traced to a personal account of a member of staff of the ministry.
Ministry of Information
At the Ministry of Information and Communication, auditors found that payments totaling N25million were made to contractors without raising payment vouchers while final payments on contracts totaling N121million were made without reference to the Office of the Auditor-General, who should co-sign final certificate of payment for government contracts.
a) N600,000 for digital cameras could not be traced at the time of audit at the Budget Monitoring and Price Intelligence Unit.
(b) ₦5 million contract was awarded for the supply of computers and accessories, and payment was effected without the approval of the Principal Secretary. Appropriate documents such as Store Receipt Voucher, Contract Agreement, and Invoice etc. were not attached to authenticate the transaction contrary to Financial Regulation 603.
(c) ₦22 million contract was awarded for furnishing the former Protocol Office for use by the Budget Monitoring and Price Intelligence Unit. Audit scrutiny of the tender procedures revealed that only two companies were invited to quote for the supplies.
(d) 72 payment vouchers raised to pay the total sum of ₦2.8 million between April and June, 2006 under the Recurrent Expenditure vote and seven Capital Expenditure payment vouchers amounts totalling ₦4.8 billion raised and paid within the same period, were not produced for audit examination.
(a) 40 Senators were granted personal advances for amounts totalling ₦1.6 billion between January and December 2006. The advances had not been retired as at the time of audit inspection in May 2007 contrary to Financial Regulation No. 1705.
(b) During the year, various mandatory taxes totalling ₦158 million were deducted from capital, recurrent and salary accounts but only ₦109 million was remitted to the Federal Inland Revenue Service.
(c) 108 payment vouchers for amounts totalling ₦1.2 billion raised between January and June 2006 were not produced for audit examination.
(d) ₦3.9 million was refunded as out-of-pocket expenses to an officer on five payment vouchers all dated May 4, 2006 for the purchase of customized gift items.
(e) Two officers and a Senator were paid ₦4.25 million in five payment vouchers between March and June 2006 for redemption of pledges made to four beneficiaries. However, no receipts or acknowledgement were obtained from the beneficiaries as evidence that the money was actually received by them, contrary to financial regulation N0. 613.
(f) A payment voucher dated 16th May, 2006, for ₦1.86 million was raised in favour of an officer to enable him print plate numbers for newly acquired official vehicles for Senate Committees. The advance was not yet retired as at the time of writing this report in May 2007, contrary to Financial Regulation 1705
(g) A cash advance of ₦3.7 million was paid to an officer on a payment voucher dated May 22, 2006 for the production and publication of the report of the Rules and Business Committee on the legislative activities of the Senate from June 2005 to June 2006. This transaction could have been contracted out or handled by the Printing Division of the National Assembly.
(h) A payment of ₦7.6 million was made to a company on a payment voucher dated January 30, 2006 for the supply of vehicle identification tags and clips. However, the final certificate of payment was neither co-signed by me or my representative, contrary to Federal Ministry of Finance circular no. 15775 dated 27th June, 2001.
House of Representatives Factbox
(a) 30 members and 37 staff of the House of Representatives collected over ₦22I million cash advances between January and December, 2006. The advances had not been retired at the time of inspection in May, 2007, contrary to the provisions of the Financial Regulations 1705 and 1720.
(b) 150 payment vouchers for ₦989 million raised between January and December 2006 were not presented for audit examination.
(c) An officer was paid over ₦7 million through three revalidated payment vouchers all dated May 22, 2006 as refund of out-of-pocket expenses to members of the Commonwealth Games held in Manchester U.K. between July 28 and August 4, 2002.
(d) ₦45 million was paid between January and May 2006 on two payment vouchers relating to contract payments without reference to Auditor General or his representative before the final payment certificates were issued as stipulated by extant regulations.
(f) The overhead costs account was overdrawn to the tune of ₦1 billion resulting in bank charges amounting to ₦34 million contrary to Financial Regulation Nos 810 and 835.