Audit Query: OAuGF Uncovers N48.426bn Extra-Budgetary Spending By Federal Ministry Of Agric

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House of Representatives

Audit Query: OAuGF Uncovers N48.426bn Extra-Budgetary Spending By Federal Ministry Of Agric

• As Anti-graft agencies probe non-payment of N98.961bn to eligible contractors

The House of Representatives is expected to investigate the Federal Ministry of Agriculture and Rural Development over extra-budgetary spending worth N48.426 billion.

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The House on resumption from the Christmas and New Year recess expected to investigate the Ministry over the non-payment of eligible contractors despite the release of N98,961,267,652.50 in the 2018 Appropriation Act.

The details were contained in the audit query issued by the office of the Auditor General of the Federation (oAuGF) submitted to the House Committee on Public Accounts for further legislative action.

Paragraph 2906 (ii) of the Financial Regulations stipulates ‘…all procurement plans must be supported by prior budgetary appropriation as proof of availability of funds. In other words, payments that are not provided for in the annual estimates shall
not be accepted.’

Furthermore, paragraph 417 of the FR provides that: ‘Expenditure shall strictly be classified in accordance with the Estimates, and votes must be applied only to the purpose for which the money is provided. Expenditure incorrectly charged to a vote shall be disallowed.’

Audit observed that the Ministry incurred extra-budgetary contractual liability totaling N48,425,543,895.72.

“The budgetary release of 98,044,134,611 representing 99.07% of 2018 capital allocation of N98,961,267,652.50, and the Ministry did not take necessary actions to pay eligible contractors which led to an outstanding contract liability of N48,425,543,895.72.

“The above anomalies could be attributed to weaknesses in the internal control system at the Federal Ministry of Agriculture and Rural Development.

According to the report, the Ministry took risks of: “Misappropriation of government funds; difficulty in funding budget.”

In its response to the audit query, the management of the Federal Ministry of Agriculture and Rural Development informed the oAGF that “the action is regretted,” adding that “the matter is under investigation by relevant Anti-graft Agencies.”

While acknowledging the Ministry’s response vide letter Ref. No FMARD/DFA/P/3460/1/215 of 3/11/2020, the oAUFG in its recommendations, directed the Permanent Secretary is requested to furnish reasons for the extra-budgetary spending of N48,425,543,895.72 and refund to Treasury, the sum of N48,425,543,895.72

To this end, the oAGF directed the Permanent Secretary to forward evidence of refund to the Public Accounts Committees of the National Assembly, and otherwise, apply sanctions relating to the irregular payment specified in paragraph 3106 of the Financial Regulations.

The oAuGF also queried the Ministry over alleged ‘Violation of e-payment policy to the tune of N700,179,314.37.

According to the audit query, Federal Government E-payment Circular Ref. No. TRY/A8/B8/2008 dated 22nd October 2008 stipulates that individual benefit/claim should be effected through their
personal bank accounts.

Also, paragraph 613 of the Financial Regulations provides that: “Payments shall be made only to the persons named in the vouchers or their properly authorized representatives…’’

“Audit observed that the Ministry paid the sum of 700,179,314.37 to persons other than the direct beneficiaries of such payments, and the above payments were made through eight payment vouchers.

“The above anomalies could be attributed to weaknesses in the internal control system at
the Federal Ministry of Agriculture and Rural Development,” the oAuGF stated in its report.

According to oAuGF, the risks taken by the Ministry include: “Loss of government fund and diversion of public funds.”

In its response to the oAuGF audit query, the Ministry’s management submitted that “direct payment could not be made to beneficiaries because they were yet to be enrolled on the GIFMIS Platform. However, efforts are ongoing to conclude the enrolment process,” the report stated.

In its recommendations, the oAuGF directed the Permanent Secretary is requested to furnish reasons why persons other than the rightful beneficiaries on payment Vouchers were paid, recovered and refund to the Treasury, the sum of N700,179,314.37.

The Permanent Secretary directed to “forward evidence of refund to the Public Accounts Committees of the National Assembly, and otherwise, apply sanctions relating to irregular payment and payment for jobs not executed specified in paragraphs 3106 and 3104(i-iii) of the Financial Regulations respectively.”

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