New Telegraph

Senate queries Federal Mortgage Bank over irregular award of N3bn contract

 

…summons former MD

 

The Senate Committee on Public Accounts has queried the Federal Mortgage Bank (FMB) over what it described as irregular award of N3 billion contract in four phases.

 

The Chairman of Public Accounts Committee of the apex legislative Chamber, Senator Mathew Urhoghide (PDP, Edo South), anchored the query on the 2018 Auditor- General Report. Following this query, the Committee resolved to summon the former Managing Director of the Federal Mortgage Bank, Mallam Gimba Yau Kumo to appear before the panel and explain the rationale behind the irregular award of the contracts under review.

 

The query reads, “Audit observed that a contract was awarded to a contractor in four phases at a total contract sum of N 3,045,391,531.97. “Audit however, observed that the second, third and fourth phases of the contract were above the approval thresholds of the bank.

 

“It was also observed, from the examination of payment documents, that the contractor was overpaid in the sum of N 118,717,892.72 that resulted from irregular addition of 5% Withholding Tax in the Bill of Quantity on each of the four phases of the contract. ”

 

Audit further observed, from physical inspection of the site, that a provision of N80,000,000 was made and paid for the implementation of “Unified Access and Attendance System” but the device was not working according to specifications.

 

“A sum of N644,040,000 was also provided in the Bill of Quantities for offshore training and other deliverables in the 3rd and 4th phases of the contract, but there was no evidence of execution, in contravention of Financial Regulations 70.”

 

However, the Managing Director of FMB, Arc. Ahmed Musa Dangiwa, explained that the contract was awarded in 2011 by the previous management to design, build and implement a Mortgage 5 Banking Business Process Solution workflow and infrastructure with the aim of creating an Enterprise software that would integrate all the bank’s processes.

 

He said: “This Management, after an assessment of the contractor’s performance of the obligations on the contract, expressed dissatisfaction with the service rendered by the contractor.

 

“Management, thereafter, severally engaged the contractor over all the issues surrounding the project, which include amongst others the issue of overpayment of the sum of N118 million due to wrong addition of WHT to the contract award sum in all the four phases as well as other payment to the contractor.”

 

The MD stated that a settlement agreement was, thereafter, entered into by FMBN and Messr Starter-Point LTD on the mode of repayment of all outstanding due to the bank.

 

He stated that payment of the contract sum for phases three and four was made to the contract by the previous management based on the milestone achievement as specified in the contract agreement

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