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Under Buhari’s Watch: Audit reveals how FG agencies paid for projects without proof of performance



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MINISTRIES, departments and agencies (MDAs) of the Nigerian Federal Government paid for projects without any proof of performance, leading to misapplication and loss of government funds.

This was revealed in the 2019 Audit Report released by the Auditor-General of the Federation Adolphus Aghughu.

The report, dated September 15, 2021, highlights cases of non-compliance with Financial Regulations by several agencies of the Nigerian government.


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One of the agencies where payment without proof of execution of project was recorded is the Ministry of the Federal Capital Territory (FCTA) – the ministry which supervises the FCT and its area councils.

Payment for projects without proof of performance contravenes the provisions of Paragraph 708 of the Federal Government’s Financial Regulations (FR) (2009), which stipulates that “on no account should payment be made for services not yet performed or for goods not yet supplied.”

The sum of N73.064 million was paid to some officers of the FCT Internal Revenue Service (FCT-IRS) for the conduct of residency verification and Taxpayer Identification Number (TIN) project in December 2019. The payment was approved on December 17, 2019 by the executive chairman (residency verification) and the director of human resource.

But the audit found that the payment for the projects was made without any proof of performance.

The Auditor-General of the Federation Adolphus Aghughu says the project report, which ascertains whether the projects were actually executed, was not made available in the course of the audit despite repeated requests.

The audit report notes that the development is a possible case of payment for jobs not executed and misapplication of funds, which can result to loss of public funds.

The audit report also identifies discrepancies in the payment for the TIN project.

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The FCT-IRS funded the TIN project from staff welfare sub-head (code number 22021007), an unrelated sub-head, contrary to extant regulations.

The auditor-general of the federation, in his recommendations, directs the executive chairman of the FCT-IRS to explain why payment for the TIN project was made from an unrelated sub-head.

The executive chairman is also directed to recover, and remit to the treasury, the sum of N73.064 million paid for the TIN project without proof of performance.

Evidence of the remittance is to be forwarded to the Public Accounts Committees of the National Assembly.

In the event that the executive chairman of the FCT-IRS fails to recover and remit the money, the auditor-general of the federation recommends the application of sanctions relating to payment for job not executed, as prescribed in paragraph 3104(iii) of the Financial Regulations.

The audit also found that the bank balance of the FCT-IRS was understated due to failure to carry out bank reconciliation, a development which could lead to loss of government revenue and difficulty in funding budgets.

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The understatement of account due to failure to carry out bank reconciliation contravenes provisions of Paragraph 716 of the Financial Regulations which states that “all (government) officers authorized to keep bank accounts must compare on weekly basis, and at the close of each month, the entries appearing on the bank statements with those in their cash books and effect early clearance of outstanding items.”

The audit discovered that the FCT-IRS operation accounts domiciled with the Central Bank of Nigeria (CBN) were not reconciled for the period of January to December 2019.

According to the audit report, the closing balance in the FCT-IRS account as at February 28, 2019 was N709.1 million while on March 1, 2019, the opening balance was reflected as N1.8 billion.

The development resulted in an understatement of N613.734 million in the bank balance.

Also, the closing balance as at March 31, 2019 was N1.2 billion while N636.366 million was reflected as the opening balance.

Other financial irregularities discovered in the accounts of the FCT-IRS, according to the audit report, include extra-budgetary spending, non-deduction and remittance of 1 per cent stamp duties, and non-submission of audited financial statement

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