MDAs mismanage N105.66bn, says Auditor-General report

The office of the Auditor-General for the Federation (AuGF) has noted some irregularities in the accounts of ministries, departments and agencies (MDAs) of government through disbursement and utilisation of public funds.

The AuGF said transparency and accountability in government financial management systems were important, particularly given the country’s dwindling revenues as well as the impact on annual budget.

The auditor general, in the latest annual report on the financial conduct of public institutions, on its website, lamented that a total sum of N105.66 billion had been expended by the MDAs in breach of extant rules and regulations.

The development came amidst reforms undertaken by the Buhari administration to instill sanity in the public procurement and finance system.

The report stated that N18.36 billion had been awarded for contracts with disregard to the Public Procurement Act.

The AuGF also expressed concern over the persisted inherent weaknesses in the system despite his previous recommendations to the Minister of Finance, Budget and National Planning as well as the Accountant General of the Federation for prompt actions.

The latest audit assessment stressed the need for authorities to enforce strict compliance with legislations, rules and regulations across all MDAs.

It said the Public Accounts Committees of both chambers of the National Assembly should look deeply into the issues raised in the report and ensure the reports and resolutions of the legislature on these matters are forwarded to the executive for implementation.

It added that clear sanctions should also be imposed on erring officers going forward.

The audit revealed that revenue amounting to N54.69 billion was not remitted to government coffers by agencies.

It stated that while 18 revenue-generating agencies failed in their statutory obligations of remitting revenue generated to the Consolidated Revenue Fund (CRF), 17 other MDAs failed to either deduct or remit deductions by way of Value Added Tax (VAT), Withholding Tax (WHT), Pay As You Earn (PAYE) and Stamp Duties.

The audit, among other things, found that 72 payments, amounting to N23.48 billion, were made by 43 MDAs in violation of extant rules.

It stated that irregularities and failure to comply with regulations in the spending of public funds could result in the misapplication or misappropriation of funds.

Moreover, 25 MDAs awarded 52 contracts totaling N18.36 billion, in violation of the Public Procurement Act, 2007, the audit added.

The AuGF said, “The violation ranges 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.”

It also warned that a breach of the Procurement Act and other weaknesses in procurement processes could be deliberate means to siphon public funds.

It said while the amounts involved in the infractions should be recovered into government coffers, sanctions in sections of the Procurement Act should apply against erring officers.

It added that erring MDAs should be denied budget appropriations as well as the affected accounting officers being surcharged.

Some of the agencies indicted by the audit report for breaching due process, financial mismanagement, and non-compliance with financial regulations, among others, are the National Agency for Food and Drugs Administration (NAFDAC), Federal Ministry of Finance, National Identity Management Commission (NIMC), the Bank of Industry (BoI), Financial Reporting Council of Nigeria (FRCN) and the Nigerian Social Insurance Trust Fund (NSITF).

Others are the Nigerian Maritime Administration and Safety Agency (NIMASA), Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Petroleum Products Pricing Regulatory Agency (PPPRA) and the Federal Ministry of Works and Housing.