How officials steal Lagos local government dry

LAGBUS BRT Lagos
LAGBUS BRT Lagos

In 2013, nine councillors in the local government petitioned the Lagos State House of Assembly over alleged financial impropriety of Tajudeen Ajide, the council boss.

The Executive Council of Surulere Local Government in Lagos State was involved in numerous financial irregularities, including awarding millions of naira worth of non-executed contracts in 2012, official documents seen by PREMIUM TIMES have shown.

An audit examination of the books and records of the council revealed that the local government obtained N10 million as term loan and N57.6 million as vehicle loan without appropriate approval, in violation of the Lagos State Public Finance Management Law 2011.

In 2013, nine councillors in the local government petitioned the Lagos State House of Assembly over alleged financial impropriety of Tajudeen Ajide, the council boss.

The councillors, who passed a vote of no confidence on Mr. Ajide, had accused the council boss of monumental graft and a “high level of incompetence, callousness, and total disregard for all democratic principles.”

The councillors also accused the council boss of abuse of office by seeking to witch-hunt them for performing their statutory oversight duties.

Mr. Ajide had repeatedly kept mum in the face of all the allegations despite several efforts to reach him including PREMIUM TIMES’ visits to the council secretariat.

A report of the Auditor-General for Local Governments on the accounts of the council, made available to PREMIUM TIMES, reveals series of official graft by the Executive arm of the local government.

Several official queries sent by the Auditor-General to the local government were not responded to, the report stated.

365 Days of ‘GRAFT’

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The audit, for the year ended December 31st 2012, was carried out in compliance with the provisions of Section 50 subsections 1-4 of Lagos State Local Government Administration Law No.7 of 1999.

A financial overview of the council’s revenue for the year under review revealed a total revenue of N726.8 million, broken down into Balance brought-forward on 1st January 2012 of N19.7 million; Federal Statutory Allocation N433.7 million; Internally Generated Revenue (IGR) N57.5 million; Wharf Landing Fees N24.2 million; LASAA (Lagos State Signage and Advertisement Agency) N16.9 million; State Grant (Project Fund) N107.2 million; and Loan and Sundries N67.6 million.

The total expenditure under review was N729.7 million, comprising of Non-Pensionable Cost N86.9 million; Overhead Cost N444 million; and Capital Expenditure N198.8 million.

The debt profile for the year under review totalled N186.7 million.

The report stated that the examination of the Departmental Vote Revenue Accounts Book for the year showed that the local government realized an IGR of N98.6 million, compared to the annual internal revenue budget of N128 million.

“Further investigation of sub-heads disclosed Internal Revenue Shortfall totalling N48.9 million recorded under three heads and 13 sub-heads,” said the report.

“Out of the estimated revenue of N95.4 million, a total sum of N46,501,636.96 only was actually collected. This is a 48.7% shortfall contrary to F.M.1:8(2) which states that ‘Seeing that all revenue due to the Local Government is collected promptly and properly and paid promptly into the Local Government Funds.”

The report also stated that an audit inspection of the performance of Revenue Contractors revealed that a colossal amount, such as a N10 million uncollected market stallage fees, expected to be remitted to the Local Government during the period under review was not paid.

“Audit examination of payment vouchers for the period under review revealed payments totalling N906,416.00 was incurred on workshops, training and conferences.

“Audit further observed that the expenditure was devoid of transparency and accountability since credible documentary evidences such as certificates of attendance, hotel accommodation bills and course fees receipts were not attached to the payment vouchers,” the report stated, noting that the penalty for such offence was to surcharge the defaulting officers.

The report further stated that an examination of Deposit Ledger and payment vouchers revealed that the Local Government did not remit the statutory deduction from contract awarded totalling N16.8 million in respect of PAYEE and others to the appropriate agencies.

The report also revealed that the council awarded a N42.8 million contract to DEXTER FORTE LIMITED for the construction of coloured LED Display Solution Screen at Masha Road, Lagos State Water Corporation Junction in Surulere.

“It was agreed that the sum of N12,840,000.00 being 30% of the contract sum be paid as mobilization for the project while the 70% balance payment of the contract sum shall be spread over six(6) months.

“Audit investigation carried out revealed that the sum of N17,847,600.00 has been paid to the contractor…

“However, despite the release of the sum of N17,847,600.00 to the contractor, the project has not taken off since February2011 when the agreement was signed,” the report said, adding that an audit query sent to council requesting an explanation was not responded to.

The report also stated that an examination of the imprest account revealed that a total sum of N2.6 million was paid to the Chairperson between November 2011 and February 2013.

“The following observations were noted: (a) The monthly payments were receipted by the Personal Assistant to the Chairman, Mr. Mukaila Ishola, contrary to F.M 14.8(6) which states that ‘the payee named on the voucher is the person entitled to the payment due.

(b) The imprest was unilaterally increased from N150,000 to N250,000 without appropriate authority as audit was not availed the approval for the increment.

(c) The payment was not transparently accounted for. The identity of the beneficiary could not be ascertained as all efforts to liaise with her proved unsuccessful.”

In the review of the financial statements for the year under scrutiny, the report noted that the Cash flow statement for the year ended 31st December, 2012, presented in the Financial Statements did not show the true cash flow trend of the Local Government.

“The review of the Cash flow Statement revealed that the closing cash and its equivalent figure of N25,146,792.50 differed from the opening cash and its equivalent for the year under review,” said the report.

“The Deposit account balance of N16,880,343.92 shown in the Statement of Asset and liabilities for the year under review could not be certified correct because, a total sum of N67,664,000.00 which was the amount of loan taken was included in the figure.

“Audit revealed that part of the loan has been paid, and that loan should be separately disclosed,” the report added. 

PREMIUM TIMES learnt that the audit report and other allegation of graft against the council boss are being investigated by the Economic and Financial Crimes Commission, EFCC.

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