How MDAs, foreign missions defrauded government of over N400b
• DPR yet to account for N148.7b revenue from 26 firms
• NIPOST, Police Commission, others fingered in tax diversion
• Embassy in Washington expends N589m IGR on ‘sundry expenses’
The last is yet to be heard of the year 2014 Federal Government’s financial statement audit report submitted to the National Assembly by the Auditor General of the Federation, Mr. Samuel Ukura, wherein he alleged that the Nigerian National Petroleum Corporation (NNPC) withheld about N3.2trillion revenue from the Federation Account.
Again, the report has alleged that the Department of Petroleum Resources (DPR) has been unable to account for $743,648,242.45 million (about N148.7billion) revenue collected from some 26 oil companies operating in the country.
The report also revealed that millions of naira have been lost to illegal withdrawals, unauthorised Payment Vouchers (PVs) and unpaid advances granted to staff of different government Ministries, Departments and Agencies (MDAs).
It also alleged that foreign missions may have also perfected schemes to defraud government through award and abandonment of contracts and conscription of Nigeria-based contractors in executing projects overseas. The missions implicated are those in Singapore, Jamaica and Washington DC.
According to the report, this fraud was perpetrated by diverting taxes collected on behalf of government, illegal withdrawals of funds from the treasury against financial guidelines.
On revenue and taxes diversion, the report alleges that the DPR has continued to look the other way while some 26 oil firms owe government almost N30billion in royalties and taxes and continue to do business even after they were sanctioned.
It also identified some agencies that were yet to remit withholding and value added taxes they collected on behalf of government to the Federal Inland Revenue Service (FIRS) for onward remittance to the Federation Account.
Under the heading “Unremitted Taxes” in paragraph 13, the report said the Police Service Commission did not remit Value Added Tax (VAT) and Withholding Tax (WHT) of N74,658,078.44 in 2013 as at 2015, while unremitted taxes by the Ministry of Petroleum Resources stood at N29,367,344.82.
It said that at the DPR outstanding revenue due to the Federal Government from 26 oil companies that are still in operation even with sanctions imposed on them stood at $743,648,242.45.
It noted that at Nigeria Postal Services, VAT/WHT not remitted stands at N14,338,307.86, while at the Ministry of Niger Delta, it is about N79,890,899.50.
Under illegal withdrawals, the MDAs were queried by the auditor-general for failing to retire advances collected, which ran into several billions when aggregated across board.
Decrying the trend, the report noted, “N47,979,758.00 in advances to 47 members of staff of the Ministry of Foreign Affairs were not retired, at the Federal Ministry of Health, the unretired sum stood at N1,637,034,667.46 and at the Federal Ministry of Special Duties and Inter- Governmental Affairs, three advances for amount totaling over N24.5m were yet to be retired.”
Other ministries where the trend existed, according to the report, include the Federal Ministry of Lands, Housing and Urban Development, N113,816,803.50 and at the Federal High Court, where advances for 12 staff amounted to N44,428,125.00.
“A total sum of N90,588,425.00 was granted to 15 officers, some in multiple forms as advances. Each exceeded the limit of N200,000.00 authorised for procurement of goods and services. Treasury Circular No. TRY/A2 and B2/2009, OAGF/CAD/026/VOL.1/188 of 09/04/2013.
“Also, 84 payment vouchers (PVs) amounting to N749,786,241.31 were not produced for audit examination and verification. Also, there were 28 PVs raised and paid for various insurance premium and renewals between January, 2012 and December, 2014. Relevant documents as letter of engagement/award of insurance contract to the insurance broker or insurance companies, schedule of staff/judges assured or insured were not produced for audit,” the report said.
On violation of financial regulations at the National Assembly Management, the report revealed that advances were granted without raising requisite payment vouchers.
“Advances were granted to 112 staff from recurrent votes while 50 others benefited from the General Service Vote from July to December, 2014 for various purposes all amounting to N1.1b. The payments were made without raising payment vouchers at the Management Department, which is a violation of financial regulation,’’ it said.
The report said N803million was lost through illegal withdrawals, whose beneficiaries were not indicated, noting that the sum was taken out of the system in three installments. It added that PVs for about N322million were not presented for examination despite repeated demands for them.
On foreign missions, the report said that the Embassy of Nigeria in Washington DC, in the United States realised Internally Generated Revenue (IGR) of $3,705,428 (N578million) between 2012 and March 2015 but expended the whole sum on sundry expenses.
Noting that a 22-storey building housing the Nigerian Consulate-General, the National Boundary Commission of Nigeria and the National Intelligence Agency (NIA) located few blocks from the United Nations Headquarters, was grossly under-utilised, the report said the mission spent heavily on the payment of utility bills and maintenance.
“The property is fast deteriorating. Considering the fact that the property is strategically located, it is recommended that the property be rehabilitated and put up for rent to generate revenue for Nigeria’’, the report said.
On the Nigeria High Commission in Kingston, Jamaica, the report said that ta project said to be managed by a Nigeria–based contractor in response to the Haiti earthquake for which the commission got $4,902,006.16, had been abandoned amid irregularities with the disbursement and management of funds.
“In the wake of Haiti earthquake in 2010, the Nigeria Red Cross coordinated fundraising effort to assist victims of the unfortunate incident. The fund was primarily to finance a project in Haiti with a view to alleviating the suffering of the victims and promoting greater cooperation between the two countries.
“A Nigeria-based contractor was got to build a school in Haiti at an area not affected by earthquake at the contract sum of US$2,333,420.89, in which 50 per cent (US$1,166,710.44) was advanced without due process.
“A physical inspection of the project revealed that the project was at the foundation stage and not more than 12 per cent completion stage in October, 2015. The Ministry of Foreign Affairs suspended execution of the contract,” the report said.
It continued: “The project coordinator was awarded a contract of US$366,160.00 in which the sum of US$192,408.00 was paid. The Nigerian High Commission officials were indebted to the fund at the tune of US$552,629.00 as at the time of audit in October 2015.
‘‘The fund was invested in fixed account and yielded accumulated interest of US$147,831.89, which was withdrawn and cannot be accounted for. The balance in the account as at the time of audit in October 2015 was US$2,890,656.51 credit.”
Noting that there was no evidence of memorandum of understanding (MOU) between Nigeria and the Haiti government for the construction of the school as at the time of inspection, the report said that the location of the school was not affected by earthquake in 2010.
The report recommended that all parties involved should be made to account for withdrawals of accumulated interest of $147,831.89 and the mission to pay back $552,629.00 owed to Haiti fund.
It added that the contractor should refund the excess money paid by non-performance since the work was only 12 per cent completed and 50 per cent contract sum already paid, which amounted to $1,166,710.44.
On the controversy over the purchase of a vessel named Excellent Driver by the Nigeria High Commission in Singapore, the report said the commission intervened when the vessel which was to be used for training programmes by the Ministry of Petroleum Resources at the Petroleum Training Institute (PTI), Warri, was about to be resold.
“The Ministry of Petroleum Resources remitted part-payment to the missions to settle outstanding debts and the balance to be remitted. Unfortunately, the balance was not settled and the crew had abandoned the vessel. A delegation of the Ministry of Petroleum Resources visited Singapore in 2013, in which they agreed with parties involved on re-payment plan. But up to the time of audit inspection in November 2015 no payment had been made to the vendors. The vessel had remained unprotected and floating in the dockyard for over five years, which no doubt had depreciated in value.
“The cost of the purchased and how much was paid before the vessel was abandoned could not be ascertained, due to the fact that the contract was awarded without involvement of Nigeria mission’’, it said.
The report called for an urgent investigation into the circumstances of the purchase of the vessel and its subsequent abandonment after five years in the dockyard of Singapore.
It said that since public funds had been committed without value, parties involved should be made to account for the value of the vessel paid and ensure that the vessel was brought to Nigeria to achieve the purpose for which it was purchased.