How Nigerian judges, other court officials defrauded govt of N4.8 billion – Audit Report

Nigerian judges used to illustrate the story, [Photo credit: 360Nobs.com]

About N4.8 billion was either misappropriated or unaccounted for between 2012 and 2015, by federal courts across the country, audit reports of the Auditor General of the Federation revealed.

A PREMIUM TIMES’ analysis of the reports covering four years shows how court officials illegally spent the taxpayers’ money in flagrant abuse of the Fiscal Responsibility Act.

The 2015 audit report is the last so for from the office of the Auditor General.

Most of the money was reportedly siphoned through ghost contracts, non-remittance of taxes, failure of senior court officials to retire advances collected for assignments and refusal to repay vehicle loans, the audit report revealed.

In other instances, court officials overpaid for items bought, many payments made were without receipts and wide discrepancies were discovered in the transcript and analysis book, contrary to extant financial regulation.

For instance, in 2012, the audit report showed that N985 million (N984,907,060) was not accounted for.

In 2013, officials could not explain what they did with N71 million (N70,959,696) and in 2014, N1.4 billion (N1,446,767,605) was misappropriated through unlawful insurance policies, failure to pay taxes and missing documents to back expenditure.

The amount misappropriated in 2015 almost doubled that of the preceding year. That year, the audit report revealed that officials of federal courts could not account for N2.4 billion (N2,389,583,032).

GHOST PROJECTS

A common scheme employed by officials to steal funds was the award of ghost projects, the report showed.

Judicial officials serially released funds for projects that were either not executed or partially executed.

For instance, in 2012, the Court of Appeal in Abuja paid N20 million (N20,125,416) to five contractors to supply food supplements to judges and head of units. However, an audit of the payment vouchers and distribution list made in respect of the supplements discovered that out of 2,199 units of food supplement allegedly received, only 479 were distributed.

Officials could not account for the balance of 1,720 units of food supplements valued at N15 million (N15,038,950). The missing supplements were not included in the distribution list. They were also not physically available in the store as at the time of the audit.

In all, the Court of Appeal Abuja division could not account for N 160 million (N159,906,776), the reports showed.

UNPAID TAXES

Taxes are the fuel with which economies are run. Taxes helps in the provision of basic amenities and infrastructures which in return translates to a high living standard of citizens.

But officials of the Nigerian judiciary saddled with the task of collecting withholding taxes from contractor and companies, in some instances charged contractors only half of what they are required to pay by law or did not impose the required tax at all in other instance.

In 2012, officials of the Federal Capital Territory High Court charged contractors only half of the withholding tax for the N446,738,199 contract awarded for consultancy services for the construction of the FCT High Court Headquarters Complex, Wuse, Abuja.

“An examination of the relevant payment voucher revealed that instead of the 10 per cent mandatory withholding tax, WHT for companies of N44,673,819 expected to be deducted at source and paid to the Federal Inland Revenue Services (FIRS) as directed by extant Financial circular, only 5 per cent withholding tax meant for individuals was deducted. Even the 5 per cent WHT was not fully deducted. Instead of N33,336,909.00 only N21,273,247.00 was deducted leaving a shortfall of N12,063,662.00 On the whole, the sum of N23,400,572.00 was under-deducted, thereby causing a loss of revenue to the government in violation of Regulation 234.”

The auditors did not reveal why the court officials decided to cheat the government of desired taxes.

The reports show how contracts worth millions of naira were awarded in the judicial sector without Value Added Tax (VAT) and Withholding Taxes deducted as statutorily required. About N47 million (N47,473,270) due taxes in this respect was not paid within the period under review.

NON-RETIREMENT OF ADVANCES

Senior officials of the federal courts are in the habit of not retiring advances paid to them, the audit reports showed.

Judicial officers did not retire N265 million (N265,127,309) granted as personal advances to carry out repairs or render services. Some officials got as many as 21 advances despite failing to retire previous advances contrary to the provision of Financial Regulation 1405 which stipulates that “Accounting officers are responsible for ensuring the prompt repayment of all advances by instalment or otherwise”.

Also, Financial Regulation 1420 stipulates that “It is the responsibility of all accounting officers to ensure that all advances granted to officers are fully recovered.”

Rather than the exception, the failure to retire advances was so widespread that it has become the norm in the judiciary, the reports claimed.

“During the examination of accounting records and other related documents maintained at the Federal High Court, Abuja, in the year 2014, It was observed that amounts totalling N44,428,125.00 were granted to 12 members of staff of the Federal High Court between March and December 2014 as advances. It was surprising to observe that out of this amount, the sum of N5,165,500.00 was given to 5 (Five) staff of the Office between March and December 2013 and it has remained unretired up to the time of writing the report in August 2015.”

OVERPAYMENT OF ITEMS/UNRECEIPTED PAYMENT

The report also showed top judicial officials regularly and outrageously inflate the cost of items and services. No less than N71 million (N71,227,732) was recorded as overpayment within the period.

The officials also recycled old payment vouchers to cheat the system, the auditors found.

“In 2012, amounts totalling N29,851,320.00 was paid from the Capital Expenditure of the National Industrial Court. The payments were made by recycling payment vouchers. Duplicate copies of already paid vouchers were reposted into the Cashbook after a while and paid again, thereby leading to double payments in respect of 3 (three) transactions between September and October 2012”.

The reports also discovered that receipts and payment vouchers could not be produced for payments valued at N1,603,135,856.

“In 2014, at the federal high court, 28 payment vouchers for amounts totalling N564,776,651.53, were raised and paid for various insurance premiums and renewals between January, 2012 and December, 2014 as understated out of which 22 of the vouchers for amounts totalling N376,634,478 was raised and paid for premium and renewal of vehicle insurance, 5 payment vouchers for amounts totalling N164,782,200 was raised and paid for Premium and Renewal of Group Life Insurance for Judges and staff and the other 1 payment voucher for N23,359,972 was raised and paid for Premium and Renewal of Buildings Insurance.

“However, relevant documents such as letter of request for insurance cover, letter of engagement/award of insurance contract to the insurance broker or insurance companies, contract note from the insurance company/broker, payment slips, schedule of staff/Judges insured (in the case of group life assurance), schedule of insured assets (vehicle and building, etc.) for the payment of the sum of N564,776,651 were not produced for audit examination”.

UNPAID VEHICLE LOANS

The reports also indict a number of senior judges and court officials for failing to pay back loan they received to purchase vehicles, while those who bought auctioned vehicles did not pay after taking possession of such vehicles.

The reports put the value of amount lost through this in the period under review at N79 million (N78,732,788).

“During the audit of motor vehicle loans granted to serving Judges at the federal high court in 2012, it was observed that a total sum of N56,987,838 was still being owed by the Judges, 5 years after granting them the vehicle loans”.

DISCREPANCIES IN BOOK ENTRIES

Examination by auditors of the monthly transcripts prepared at the various courts from 2012 to 2015 revealed a lot of irregularities.

“During the audit examination of the books and records of account of the Federal High Court, Abuja, in 2015, it was observed that capital allocation of N514,213,924.00 was in analysis book while N2,056,855,69.00 was in main transcript and also, the sum of N30,200,090.00 was posted into analysis book while on main transcript, the sum of N129,682,602.00 was reflected, giving a difference of N99,482,512.00

“Amounts totalling N2,181,770,285.00 representing on-payment deductions and several payments which featured in the Analysis Book were not transferred to the main Transcripts, which caused over two billion naira unaccounted for”, stated the auditors.

According to the reports, N485 million (N484,843,282) was not accounted for due to misappropriation, recklessness, inability to produce documents for audit verifications and violation of extant regulations.

The spokesperson of the NJC, which regulates the judiciary, declined to speak on the audit reports.

However, a top NJC official, who asked not to be named as he was not authorised to speak on the matter, said, “I am not privy to these revelation, I am just hearing of it for the first time.

“However, I am aware that at the end of every audit exercise, since audit is done yearly, I believe schemes of misappropriation or financial recklessness would have been communicated to affected courts, and I’m sure the auditor general would have queried erring court officials and their issues would have been referred to the Senate committee in charge.”

ACTIVISTS CALL FOR PROSECUTION

Reacting to the audit reports, an activist, Lanre Suraj, described the revelations as disturbing.

“Unfortunately, the judiciary as a whole has, over time been performing below expectation in terms of transparency and accountability. As it is, the spending of the judiciary is not known to the public, the last attempt to investigate the National Judicial Institute reflected a lot of corruption and financial cases running into billions of naira.

“It is a challenge that the judiciary is not also respecting the Constitution in terms of awards of contract in accordance to procurement law and Fiscal Responsibility Act.”

Mr. Suraj urged government to take steps in ensuring probity and accountability in the sector “and serious sanctions need to be applied on guilty officials to guide against replication by others.”

For lawyer and activist Inibehe Effiong, “The truth nobody will contest is that there is no organ of government that is not corrupt.

“We expect that the report of the auditory general will instigate action from the anti-corruption agency. If the Auditor General has submitted reports exposing various cases of corruption and financial recklessness in the judiciary, past and present court officials directly and indirectly affected must be brought to book, probed and punished accordingly.

Mr. Effiong said the reason why corruption thrives in Nigeria “is because of impunity whereby people take public funds, spend it lavishly with an assurance of no dire consequence.”

“So, it is important for EFCC to have a copy of audit reports so that actions can be taken on it.

“Issues like these bother us as a country. It is expected that the judiciary, an organ of government that has the responsibility of checking the excesses of other arms, be above corruption.”

Mr. Effiong advised that audit reports be made public and submitted to anti-corruption agencies for punitive measures to be taken against erring government officials.


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