Going by the latest report by the Office of the Auditor-General of the Federation (OAuGF), many Ministries, Department and Agencies (MDA) violated extant laws and spent billions of naira that were not appropriated in 2020.
The OAuGF gave the detailed account of the infractions two years after its last report.
Section 80 (2) of the 1999 Constitution as amended States that “No moneys shall be withdrawn from the Consolidated Revenue Fund of the Federation except to meet expenditure that is charged upon the fund by this Constitution or where the issue of those moneys has been authorised by an Appropriation Act, Supplementary Appropriation Act or an Act passed in pursuance of section 81 of this Constitution”.
Also, Section 80(3) states that “No moneys shall be withdrawn from any public fund of the Federation, other than the Consolidated Revenue Fund of the Federation, unless the issue of those moneys has been authorised by an Act of the National Assembly”.
The 2020 Audited Report of government finances dated November 30, 2023, submitted to the National Assembly contained revelations of unbudgeted expenditure and unremitted revenue to government coffers in the 2020 financial year.
Constitutionally, the 2020 Auditor-General’s report ought to have been submitted to the National Assembly in 2021. It was submitted via a letter referenced AuGF/AR.2020/01 dated November 30, 2023.
The report contained 26 audit queries issued to the OAuGF detailing different infractions and abuse of the financial regulations and treasury circulars; 27 queries against the Security and Exchange Commission and 31 audit queries against the Ministry of Labour & Employment.
Last year, The Nation reported that the delay in the appointment of a substantive Auditor-General of the Federation was delaying the submission of an audited report of government finances to the National Assembly as the director over-seeing the office cannot sign any final audit report.
On October 21, 2023, President Bola Ahmed Tinubu appointed Shaakaa Chira as the substantive Auditor-General
In its Report, the said that 28 MDAs, including some Federal Pay Offices, Office of the Surveyor-General of the Federation, Airforce Institute of a technology among others had negative balances of cash and cash equivalents amounting to N13,955,069,757,335.20.
The report said: “The amount was presented in the Consolidated Statement of Financial Position as Current Portion of Borrowings/Cash & Cash Equivalent under Current Liabilities.
“There was no further information in the notes to the FGN CFS on what gave rise to the negative cash and cash equivalents recognised by the twenty eight MDA.
“The above anomalies could be attributed to weaknesses in the internal control system surrounding the consolidation process at the OAuGF.”
The report also indicted about 256 MDAs for engaging in extra budgetary expenditure amounting to N284, 316,170,124.34 in 2020, saying “the total expenditure disclosed for the affected MDA was N361,273,553,365.49, against the approved budget of N76,957,383,241.15, hence the extra budgetary expenditure.
According to the report, the sources of the extra spending were neither disclosed, nor the evidence of supplementary appropriation or approved virement provided, attributing it to failure of the accounting officers of the affected MDA to ensure that proper budgetary and accounting systems are established and maintained to enhance internal control, accountability and transparency.
It also attribute it to lack of due diligence from the Accountant-General of the Federation in ensuring that the release of the overhead costs was limited to approved estimates.
The accountant-general said in his management response to the issue that “GIFMIS is budget based software; it could not allow payments without a budget. The MDAs with waivers to spend 75 per cent of their revenue were allowed to add whatever they spent as a supplementary budget. Several of the affected MDAs have grants or aid, these is to be classified as supplementary budget. Those, with AIE, revenue & grants sources have had their budgets adjusted as supplementary budgets.
Another 18 MDAs incurred an overhead expenditure of N129,348,691,232.01 which were not supportes by budgetary provision as required by extant regulations, but the accountant-general, in a management response contained in the report said the MDAs involve ate “mostly those that had waivers to spend a percentage of their revenue to sustain themselves”.
The report said that 34 MDAs reported zero overhead expenditure despite having a total budget of N6,965, 100,151.00, adding that “no additional information was disclosed to enable users understand how the MDA operated without overhead costs”.
The AuGF report reported an extra budgetary expenditure of N342.916 billion on employee benefits and subsidiaries above the appropriated amounts, adding that while N7.027.nillion was budgeted for Employees Benefit the total expenditure was N335.657 billion was spent.
It also said that the sum of N14, 284,446,488.75 was spent on subsidies without budgetary provisions.
The report said that 72 MDAs exceeded their Employee benefits budget by N328,631,067,959.54 saying “the total expenditures of the 72 MDA were N335,657,780,939.50 while the total budget was 8’7,026,712,979.96, hence the reported extra budgetary expenditure.
The auditor-general reported that 106 MDAs exceeded their personnel costs budget by N78,761,272,804.54, saying “the total expenditures of the 106 MDA was N882.90 billion, while the total budget was N804.14 billion
“No information was disclosed thereon in respect to the authorisation of the expenditure by way of either supplementary appropriation or virement upon which the personnel budget was exceeded.”
About N1.23 trillion was recognised as Intangible Assets for 659 MDAs without the schedule showing the classification and nature of the Intangible assets contrary to the provision of IPSAS 31 and Summary of Significant Accounting Policies, while there was no disclosure to enable the audit confirm which category of the intangible assets has finite or infinite life.
According to the report, a review of the consolidated statement of financial performance shows that the gain of N244 ,326,407.50 from disposal of assets was disclosed in both Note 24 and Consolidated Statement of Financial Performance as Gain or Loss on Disposal of PPE.
The AuGF stressed that out of a total of One hundred and ten (110) MDA that were circularised, only twenty did not respond, adding that the balances recognised in the FGN CFS against the unresponsive MDA amounted to N1.721 trillion.
The Consolidated Statement of Financial Position showed a negative Net Assets of N33.34 trillions as at December 31, 2020, adding that the accountant-general should provide justification for the negative net assets balance reported in the FGN CFS to the Public Accounts Committees (PAC) of the National Assembly.
THE NATION
