EXCLUSIVE: Audit exposes massive corruption in Lagos local councils; indicts officials for squandering millions

Governor Babatunde Fashola of Lagos

A government audit of 57 local councils in Lagos State has indicted eight, accusing their officials of squandering at least N224 million of public funds on a range of questionable expenditure and unimplemented contracts.

The 2012 audit report covers the state’s Local Government Areas, LGAs, created and recognised by the Nigerian government, as well as Local Development Council Administration, LCDAs, created by the Lagos State government, but not recognised by the federal government.

Those accused of wasting public funds are Agbado Oke-odo, Surulere, Coker-Aguda, Egbe-Idumu, Eredo, Iba, Ikosi-Isheri, and Lagos Island East.

The audit assessment, seen by PREMIUM TIMES, accused officials of the affected local authorities of “financial recklessness”, and blamed them for wasteful spending.

The report also criticised another set of eight local government areas of piling up debts and failing to meet targeted revenue projections.

The LCDAs in this category are Eti-Osa East, Ikoyi-Obalende, Iru-Victoria Island, Yaba, and Agabo-Oke LCDAs.

The LGAs are Eti-Osa, Lagos Mainland, Somolu.

Together, the eight councils accounted for N788.3 million in debt, and fell short of the projected N831.5 million self-generated revenue, the report states.

The respective debt profiles of each council were listed as Eti-Osa East N23.7m; Eti-Osa N52m; Ikoyi-Obalende N220.3m, and Iru Victoria Island N50m.

Others are Lagos Mainland N163.8m; Yaba N51.2m; Somolu N147.5m and Agbado Oke-Odo N79.6m.
Unaccounted funds

The report highlights a series of disturbing spending and practices which the auditors said cost the 16 councils an “unquantifiable financial shortfalls that could have been used for development projects at the grassroots”.

In Agbado Oke-Odo for instance, officials paid out N11.5m as personal advance for staff of the council since 2010 but failed to deduct the payments from salaries of the beneficiaries.

Also, the council failed to remit statutory deductions from contracts awarded to the tune of N40.9m.

In Surulere, auditors found that N17.5 m, as against the agreed N12.8m, which was 30 percent of the mobilization sum, was paid to a contractor for the installation of a Colour Led Display solution screen at Masha Road, Lagos State Water Corporation Junction in Surulere Even so, “the project has not taken off since February 2011 when the agreement was signed”, the report stated.

Tajudeen Ajide, the Chairman of Surulere Local Government, told PREMIUM TIMES that the allegations were false.

To prove his innocence, he presented documents and video clips showing that the Colour Led Display solution Screen project actually kicked off, but was stopped by the Lagos State Advertising Agency, LASSA, which refused to grant approval for the installation of the screen.

Mr. Ajide took a PREMIUM TIMES’ reporter to the proposed site of the Colour Led Display solution Screen project at Masha Roundabout, Surulere, where work was yet to commence.

“The Led Display solution screen actually kicked off but the state advertising regulatory agency refused to approve the locations we offered, the stadium junction and the roundabout at Masha, even after the state government approved the project,” he said. “And this project would have boosted our revenue generation which I had planned to use to put into education, and some key areas of the society.”

The council boss however did not explain why N‎‎17.5 million was paid instead of N12.8 million, the stipulated 30 per cent mobilization fee.

Other local areas too

At Coker-Aguda LCDA, “spurious expenditure” totalling N1.3m was made by staff on behalf of the Local Council, the report said.

“The payment appeared spurious because the minutes of the meetings were not provided to the audit team and pictorial evidence of performance was not attached to the payment vouchers,” it stated.

A total of N29.1 m was unaccounted for in Egbe-Idimu LCDA.

“Expenditure Not Accounted For: Audit examination of the payment vouchers revealed that the sum of N10.0m paid to various officers of the Local Council for sundry expenses was not accounted for,” the report said.

“Audit examination of the payment vouchers during the period under review revealed that the twenty-one payment vouchers totalling N12, 652,000.00 were doubtful and unreasonable.

“Payments for Jobs not Executed Audit examination of payment vouchers showed that the sum of N6, 500,000.00 was expended on spreading of loose laterite and stabilization of roads during the period under review. Further inspection to the site revealed that these projects were not executed.

“Unpresented Payment Vouchers: Five payment vouchers totalling N10, 200,000.00 duly posted in the Combined Cashbook were not produced for audit examination”.

Also, officials of the Eredo LCDA made unauthorized excess expenditure totalling N15m in 2012, just as 52 payment vouchers amounting to N30.2m and duly paid and posted in the treasury cashbook, were not produced for audit verification.

Officials of Iba LCDA were also indicted for overpayment of security allowance to the chairman by N2million in 2012.

Ramat Oseni-Adeyeri, the chairperson of Iba LCDA, dismissed the claims against her and other officials.

“It’s a fallacy,” she told PREMIUM TIMES.

At Ikosi-Isheri LCDA, the audit report noted an irregular auto loan facility to the tune of N100m from Fidelity Bank Plc for the purchase of vehicles for various functionaries of the Local Council.
The transaction was observed to be fraught with various irregularities such as lack of proper documentation.

An audit of Lagos Island East LCDA also revealed expenditure not accounted for to the tune of N6.3million.
The council chairmen of Eti-Osa LGA, Iru Victoria Island LCDA and Surulere LGA ‎ responded to PREMIUM TIMES inquiry.

‎Yisa Owolabi, the chairman of Eti-Osa East LCDA denied being in debt.

“The council took a facility of N100 m that year on capital project with d approval of the state government and as we speak we will finish servicing it by the end of next month. We are among the most prudent council,” Mr. Owolabi said.

Also, Abayomi Daramola, the chairman of Iru-Victoria island LCDA said he was sure his council remitted all tax deductions.

“We are not in any debt neither did we not remit any statutory tax deductions. I’m very sure,” he said.

The chairpersons of other indicted local government/councils did not respond to our requests for comments.

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