Friday, 29th March 2024
To guardian.ng
Search

Details of N1.6tr 2017 capital spending still not ready

By Mathias Okwe, Azimazi Momoh Jimoh, and Adamu Abu (Abuja)
22 July 2018   |   4:30 am
Barely two months after the shelf life of the 2017 budget ended, details of the capital component amounting to about N1.58t have not been tidied yet into a single document to explain what project, and which contractor got what.Findings by The Guardian at the Office of the Accountant General of the Federation

Minister of Finance, Mrs Kemi Adeosun

• Only Presidency, MDA’s Can Explain How Vote Was Spent, Lawmakers Insist
• Reps Push For Reforms In Budgeting System, Implementation
• 2016 Budget: Auditor General Knocks FG For ‘Messy Spending’
• Discrepancies Rife In OAGF, FAAC, CBN, Revenue Generation Agencies Figures

Barely two months after the shelf life of the 2017 budget ended, details of the capital component amounting to about N1.58t have not been tidied yet into a single document to explain what project, and which contractor got what.Findings by The Guardian at the Office of the Accountant General of the Federation; the Budget Office of the Federation; the Bureau of Public Procurement, and at the Federal Ministry of Finance produced no positive outcome, as each of the agencies kept passing the buck.

At the Finance Ministry, the minister, Mrs. Kemi Adeosun was said to be in a meeting when The Guardian called. One of her close aides who spoke, but asked not to be named said: “If you want this type of information on the details of the expenditure of the capital budget, you have to officially write so that we can piece the information together. The information you are seeking, the Finance Ministry alone cannot provide all that because contracting cuts across different agencies. There is no document here for now that can give you the kind of information that you seek because we have to approach other agencies involved in the implementation,” the aide emphasised.

While presenting a breakdown of the N9.12t 2018 budget, the Minister of Budget and National Planning, Sen. Udoma Udo Udoma, was silent on details of the implemented 2017 budget, merely saying releases were made up to June, that is one week before the assent by President Muhammadu Buhari. Udoma said : “Aggregate releases under the 2017 Capital Budget up to June 2018 amounted to N1.58, the highest for the FGN. Spending on capital has been prioritised in favour of critical ongoing infrastructural projects, such as power, roads, rail and agriculture. The N100b Sukuk Bond raised in October 2017, for instance, was deployed to construction of 25 priority roads around the country.”

Adeosun, a day before the breakdown of the 2018 spending plan attempted to give a breakdown of how the N1.58t was deployed, but she limited the deployment to sectors.According to her: “A breakdown of the 2017 capital releases indicated that power, works and housing received the highest allocation of N523. 011b, which was 33.10% of the total capital releases. The sector also received the highest releases in the 2016 capital budget, which was a total of N307.411 billion (25.21%) of the 2016 capital budget.    
 
Meanwhile, for members of the upper chamber of the National Assembly, the critical question of how the 2017 budget for capital projects was spent would be best answered by appropriate officials in the executive arm.The lawmakers in separate telephone interviews with The Guardian drew attention to several efforts made by the National Assembly to hold the executive arm accountable to the people, particularly on matters of budget implementation.

A member of the Senate Appropriation Committee and Chairman, Senate Committee on Banking and Other Financial Institutions, Senator Rafiu Ibrahim, said: “This is what we have always said. The 8th Senate and by extension, the 8th National Assembly is the session of the National Assembly that has been so critical of the manner that the executive is handling budget implementation. Even the media can bear witness to the invitation that we have extended to ministers and heads of departments and agencies to come and account for what they did in terms of budget implementation and they failed. Please put this question to the executive and hear what they will tell you if at all they will respond.”

In the heated face-off between the Presidency and the National Assembly on the implementation of the 2017 budget and preparation of the 2018 budget, lawmakers had raised issues about contempt for parliament against some ministers and heads of agencies.

Senator Ibrahim wondered why the Senate should even have considered and approved the 2018 budget, when the performance of the 2017 budget remains unknown.He stated: “How can we approve the 2018 budget without knowing the performance of the 2017 budget? This is abnormal. From what we have seen so far, it is obvious that MDAs are not ready. Year-in, year-out, the budget performance is low. We have had an occasion where a minister was asked to excuse lawmakers because he did not come prepared; he did not come with the necessary documents to defend the budget of his ministry.”

A principal officer of the upper chamber, who prefers anonymity argued that the manner the executive has conducted itself in this administration suggests that the concept of separation of powers, and rule of law could be disregarded at will.On why the National Assembly could not utilise its oversight powers to achieve results in the area of capital budget implementation, he said that apart from the work done by regular standing committees, some ad hoc committees were also constituted to go round and monitor project implementation, adding that the story of lack of cooperation from the MDA’s has been a regular
occurrence.

“Look, we were in this country when ministers who should play serious roles in budget implementation were invited to answer questions but they simply refused to turn up. We were in this country when such ministers even refused to provide details of budget allocations to agencies within their purview. Have we also forgotten when the Senate took a resolution to report such ministers to the President? How many people even cared to find out what the outcome was? He queried.

And for the Chairman, House Committee on Legislative Budget and Research, Mr. Timothy Golu, the mandate of implementing the budget lies squarely on the executive arm. “What concerns oversight with implementation? They are two different things. Our duty is to verify whether they implement it or not, we have always exercised our mandate in oversight duties. The executive’s job is to implement the budget while ours is to pass the budget and prevail on it to execute its provisions. The whole idea of oversight is to bring out issues that have not been done and the ones that have been done. 

“Have we ever forced the executive to do anything? The constitution is there and the duties and responsibilities of each of the three arms of government are clearly spelt out. It is left for Nigerians to identify who has failed to do its work.”However, Golu’s colleague and member, House Committee on Appropriation, Olatubosun Olajide Boladale, is canvassing immediate reform of the country’s budgeting system, maintaining that the subsisting budgeting system does not satisfy the yearnings and aspirations of Nigerians.

The lawmaker who decried the appalling level of implementation of the capital component of the 2017 budget noted: “As a chartered accountant, these are issues I have discussed in various seminars and retreats. I think we need a public sector budgeting process reform. What we are doing now is garbage in, garbage out. Let me look at it from a private sector perspective.  

“I was in the private sector before coming here. If a company wants to prepare a budget, let’s say budget 2019 for instance, the chief finance officer after getting the policy objective from the board would communicate to each department, maybe production, engineering, logistics, and human resources. Now, each head of department would come before the executive management to defend their estimates in a kind of retreat, or brainstorming session, where all the executive directors would be seated and questions asked. It is after they have looked at it, reviewed it, ensure corrections that they would present the budget to executive management, who would in turn present it to the board of directors for approval.

“In the public sector that is not the case. The Budget Office would do a budget call circulars to Ministries, Departments and Agencies (MDAs) intimating them that it wants to start budget 2019. Then everybody would send in their estimates, and when the estimates get to the Budget Office, it would make it available to the President. When they come for budget defence, they would tell you that that was what they sent to us. And we would be asking, is this not your budget? Who sent it to you and they would say the Budget Office. 

“What I think we should do is to have a process. It maybe very cumbersome and demanding, maybe starting from June of every year, a committee that includes legislators, members of the executive, civil society organisation, and other professionals from top accounting firms to serve as technical consultants. They would sit down over a period of three to four months to do serious work.  

“Every minister or head of agencies must appear before it to justify its presentations so that the committee can do a thorough job. The committee would thereafter recommend to the President, who all Nigerians voted for. By the time the President gets the budget, it would be a very good working document for him, and by the time the document gets to the National Assembly, we are not going to be sitting on it for five or six months. If it is presented in November, the document would be ready by the middle of December. 

“Right now, resources are just being allocated in a way that is not defined, and you begin to wonder what kind of thought pattern, or rationale that went into it. The problem is not with this government alone, it has been with us since independence. It is a major issue and unless we do that reform we can’t get anywhere.On the implementation of the 2017 budget, he said, “The 2017 budget capital releases was up to 60 per cent, if we had anything higher than that, it must be in areas that government has a special priority, maybe construction of roads, railway etc…”

IN a related development, poor book-keeping, profligacy and gross abuse of extant financial regulations in the public service characterised expenditure pattern in the 2016 fiscal year, thus making it difficult for funds to be tracked by those vested with that mandate, the Auditor-General of the Federation (AuGF), Mr. Anthony M. Ayine has declared.His position is contained in the just concluded, and belatedly submitted 2016 audited Federal Government Financial Account to the National Assembly.

In the document submitted last week, a copy of which The Guardian exclusively obtained yesterday, Ayine, told the legislative arm that the audited report for 2016 came late because thrice he queried the Accountant General of the Federation’s (AGF)) Financial Account to his office for identified gaps in information, and lack of evidence of expenditure, and thrice the account returned with more gaps, thus making it difficult and unconvincing that such expenditures were made for the purpose claimed, particularly under the new
International Public Sector Accounting Standard (IPSAS) built within the framework of full disclosure.

Ayine further told the National Assembly that his office had observed several mis-statements, discrepancies in figures between the Office of the Accountant-General of the Federation (OAGF); revenue generation agencies, FAAC and the Central Bank of Nigeria (CBN), both in accruals and expenditure, running to billions of naira in most instances with some departments, including the Office of the Chief of Staff to the President, the Office of the Chief Security Officer to the President, the State House Medical Centre and the State House Lagos Liaison Office said to have posted doubtful balances at the end of the 2016 financial year.

Instructively, year 2016 was the first year the current administration took full charge of budgeting and expenditure, having assumed office in May of 2015 after the Dr. Goodluck Jonathan-administration had prepared and began the execution of that year’s budget.The auditor general also reported that under the same year, impunity by MDAs to financial regulations, and the flouting of the rendition of audited accounts rule since the return of democracy and even beyond the military era was the highest.

For instance, he said from the records presented for audit examination a total of N409, 545, 937, 980. 74 was deducted directly from the allocations to states and the FCT to offset external debts owed by them without certification by the Auditor General of the Federation, in violation of Section 168(1) of the 1999 Nigerian Constitution, which requires that such off-set by the Federal Government from the allocation of states shall be certified by the auditor general of the federation before payment.

Again, on discrepancies, and illegal movement of funds from dedicated funds to purposes other than the mandate, he gave the following examples where the discrepancy in figures led to the overpayment of two revenue generating agencies to the tune of N837. 082b.The document said, “Our examination of the Accountant-General’s Transcript and FAAC figures revealed that the FIRS and DPR were over- paid the cost of collection in the month of August 2016 in the amounts of N305, 922, 200. 48, and N531, 160, 436. 78 respectively, totaling N837, 082, 637. 24. It was observed that what was captured in the accountant-general’s transcript as payments for the month of August for FIRS and DPR, as cost of collection differs from what FAAC approved in the FAAC file. It is expected that only figures approved by FAAC are to be paid by the Accountant General of the federation. The difference resulted in overpayments of N837, 082, 637. 24 by the Accountant General to the two collecting agencies.

0 Comments