The Federal Ministry of Agriculture and Rural Development in 2019 failed to account for extra-budgetary contractual liability totaling over N48 billion, according to the latest government audit report.
The failure, according to the report, was attributed to weakness in the internal control system of the ministry, which allowed misappropriation of public funds and difficulty in funding the budget. The report said the outstanding incurred by the ministry was because they did not take necessary actions to pay eligible contractors.
Auditors relied on Paragraph 2906 (ii) of the Financial Regulations (FR) that stipulates “…all procurement plans must be supported by prior budgetary appropriation as proof of availability of funds. In other words, payments that are not provided for in the annual estimates shall not be accepted”.
Also, the report highlights that Paragraph 417 of the FR states that “Expenditure shall strictly be classified in accordance with the Estimates, and votes must be applied only to the purpose for which the money is provided. Expenditure incorrectly charged to a vote shall be disallowed.”
The report produced by the auditor-general of the federation also said the ministry used over N7 billion released for the 2019 first quarter capital project to pay for its traditional capital project of the previous year (2018).
“The 2018 Capital Project appropriation of the Ministry was duly funded and released in the year, and there were no acceptable justifications for utilising 2019 first quarter capital release to pay for 2018 projects,” the report said.
In a letter dated November 3, 2020, the agric ministry’s management said the action was regretted and that the matter was under investigation by relevant anti-graft agencies.
Despite President Muhammadu Buhari’s repeated promise to revive the country’s agric sector, the sector has remained underfunded, yet funds allocated to the ministry are often mismanaged and sometimes diverted.
Due to inefficiencies of the agric ministry, Mr Buhari in September sacked the then Minister of Agriculture, Sabo Nanono.
Nigeria’s civil aviation agency failed to remit ₦2.98 billion
The Nigerian Civil Aviation Authority (NCAA) also failed to remit almost N3 billion naira to the federal government purse in 2018, violating the country’s rules on transfers of Internally Generated Revenue (IGR) by Ministries, Department and Agencies, the audit report said.
The government requires all federal agencies to limit their utilisation of internally generated revenue to not more than 75 per cent of the gross revenue while the balance of not less than 25 per cent should be remitted to the government purse.
According to the Office of the Auditor-General of the Federation, the authors of the report, the NCAA generated a total of N18.34 billion as IGR in 2018.Instead of remitting 25 per cent (N4.58 billion) of that amount to the government treasury, it remitted N1.60 billion, resulting in under-remittance of N2.99 billion.
The 2019 report, released recently as the latest by the auditor general’s office, said the anomalies in the remittance could be attributed to weaknesses in the internal control system at the Nigerian Civil Aviation Authority.
It said the risk associated with such an act by the aviation agency is: “Loss of government revenue, and difficulty in funding budget.”
In its response to the auditors findings, the NCAA said it was only required to remit 80 per cent of its operating surplus.
“The actual liability due for 2018 would be determined upon the conclusion of the 2018 external audit of the financial statements of the Authority,” the NCAA said.
Key recommendations
Aghughu Adolphus, Nigeria’s auditor general, said in the report that the NCAA should provide reasons why 25 per cent of IGR was not remitted to the treasury as required by extant regulations.
“Remit the sum of 2,984,887,250.00 (Two billion, nine hundred and eighty four million, eight hundred and eighty seven thousand, two hundred and fifty naira), being the under remittance of 25% of IGR for 2018 to the Treasury, and forward evidence of remittance to the Public Accounts Committees of the National Assembly, ” he said.
Otherwise, Mr Adolphus said: “apply sanctions relating to failure to collect and account for Government Revenue specified in paragraph 3112 of the Financial Regulations.”
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