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Audit report uncovers N18.3bn irregularities in 25 MDAs

…says 17 others failed to remit N54.6bn IGR

An annual report (2018) from of the Auditor-General of the Federation (AuGF) has unearthed irregularities in award, execution and payment in procurement across 25 Ministries, Department and Agencies (MDAs) of government to the tune of N18.3 billion. The AuGF’s 2018 report, which covers operations of MDAs obtained by New Telegraph, showed 25 MDAs committed various violations which range from disregard to due process, irregularity in payment for contracts, excessive pricing of procurements, payment for services not rendered, payment in full for uncompleted projects and other similar infraction.

The auditor’s report by the immediate past Auditor General of the Federation, Mr. Anthony Ayine, said: “We examined the level of compliance of MDAs with the provisions of the Public Procurement Act (PPA), 2007, particularly Sections 19, 24 and 25 as they relate to their procurement process and found that 25 MDAs awarded 52 contracts amounting to N18,369,595,564.47 in violation of the Public Procurement Act, 2007.

“The violation ranges from disregard to due process, irregularity in payment for contracts, excessive pricing of procurements, payment for services not rendered, payment in full for uncompleted projects and other similar infractions.” Government’s agencies listed in AuGF audit report of engaging in irregularities in payment to contractors include, Nigeria Social Insurance Trust Fund (NSIF) to the tune of N1,399,524,563.2; University of Ilorin, N78,507,792.56; National Power Training Institute of Nigeria, N15 million; Federal Ministry of Works and Housing (works section), N1.5 billion; National Theatre, Lagos N34,786,500.00; Federal College of Fresh water and Fisheries Technology (New Bussa), N3,611,619.00 and Voice of Nigeria (VON), N13,581,771.42 amongst others MDAs.

Similarly, MDAs who engaged in award of contracts without following due process include National Agency for Food and Drugs Administration and Control (NAFDAC), N25,734,018.49; Federal Ministry of Finance Budget and National Planning, N98,540,500; Federal University Lokoja, N156,956,310; National Identify Management Commission (NIMC), N229,797,761.00; and Federal Character Commission N 56,030,593.50, amongst others. In submission, the report observed that “violations of the PPA and other forms of weaknesses in procurement processes may be deliberate means to siphon public funds.”

In its recommendation, the report required Accounting Officers to account for the sum of N18,369,595,564.47 being infractions on procurement procedures in the award of contracts. It advised government to strictly enforce the finan-cial regulations 3102, 3103, 3104, 3106 and the relevant sections of Public Procurement Act. “We reviewed the level of compliance of MDAs with relevant rules and regulations as they relate to payment procedures and policies as well as disbursement and utilization of public funds and discovered that a total of 72 payments amounting to N23,486,881,920.49 were made by 43 MDAs in violation of extant rules.

“Among the infractions, N15,965,998,117.10 was expended without attaching necessary supporting documents to authenticate the payments, while a total of N4,037,929,692.16 was likely misappropriated at 5 MDAs, as they could not account for expenditures,” the audit report revealed.

The report pointed out the risk in irregularities and failures to comply with regulations in the spending of public funds, which it noted could result in the misapplication or misappropriation of funds. As a recommendation, it required the Accountant- General of the Federation to ensure that sanctions stated in Financial Regulation 3106 are invoked against the erring Accounting Officers.

In respect of supply of items not taken on store charge, the AuGF report uncovered irregularities amounting to N8,389,842,637.88. “We assessed the extent to which MDAs comply with relevant laws and regulations in the area of recording, updating and maintenance of store records and assets registers and discovered that 11 MDAs procured store items amounting to N8,389,842,637.88 that were not properly documented as required under Financial Regulation 2402(i) and as result, items procured were not taken on store charge,” it noted.

In the course of auditing MDAs for 2018 operations, AuGF said it discovered 18 revenue generating agencies failed in their statutory obligations of remitting revenue generated to the Consolidated Revenue Fund of the Federal Government to the tune of N54.6 billion. “We also observed that 17 MDAs failed to either deduct or remit deductions by way of Value Added Tax (VAT), Withholding Tax (WHT), PAYE, and Stamp Duties. “Other similar statutory deductions to the relevant agencies, thereby depriving the government of the much-needed fund to pursue its agenda.

“The sum of N48,551,274,468.35 being Internally Generated Revenue (IGR) was not remitted to the Consolidated Revenue Fund of the Federal Government. Similarly, a total of N5,418,780,747.23, being statutory deductions by way of VAT, WHT, PAYE. Stamp Duties, etc., were also either not deducted or not remitted to the relevant agencies. “In all, a total of N54,690,055,215.58, being revenues generated in the year under review, was not remitted to government coffers.”

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