" ITREALMS: Scam: EFCC to probe FMDAs over N92b - ITREALMS

Friday, July 23, 2021

Scam: EFCC to probe FMDAs over N92b - ITREALMS

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The Economic and Financial Crimes Commission, (EFCC) has received a petition detailing over N92b and millions of money in foreign currencies of public funds squandered by several Federal Government agencies including the country's foreign missions.
In a petition sent to the Chairman, EFCC Mr Abdulrasheed Bawa, Nigeria's anti-corruption group, Human and Environmental Development Agenda (HEDA Resource Centre), asked the EFCC to identify corrupt officials and punish them. The probe may open up terrific financial fraud involving top civil servants and serving Federal Ministers.
HEDA said it expects the probe to lead to a radical restructuring of the country''s civil service to free the institution from the fetters of graft and ineptitude which diminishes the country's administrative efficiency.

HEDA's petition was hinged on the Auditor-General’s Annual Report on the Accounts of the Federation of Nigeria 2016 indicating discrepancies and suspicious misappropriation of public funds by MDAs.

The petition signed by HEDA's Chairman, Mr Olanrewaju Suraju, attached a copy of the Auditor-General’s report

The funds were expended by several Federal Government agencies including but not limited to the Ministry of Foreign Affairs, (Nigerian Embassies Netherlands, Ireland, Germany), the Federal Capital Development Authority (FCDA), the Nigerian Navy, Defence Headquarters, the Ministry of Justice among many others.

The embassies alone were said to have received over N233m without adequate back up documents.

"Transparency should begin with agencies of the government. They should show good examples for public and private institutions to emulate. What we are seeing is a situation where some of the Federal Government agencies are violating the country's laws with impunity. The EFCC has the historical responsibility to impose sanctions where necessary" Suraju stated.

He described the scam as one of the greatest outflow of illicit funds suspected to have gone into private pockets in the civil service the country has seen in recent years.

The report did not only cover financial mismanagement it also involved outright breach of financial management procedures.

At the Ministry of Information for instance the report noted that insurance documents in the custody of the Ministry were not produced for audit examination despite repeated demands while asset Register was not maintained in the Ministry as at July, 2017, contrary to the requirements of the International Public Sector Accounting Standards implementation directive of 1st January 2015.

At the Ministry of Defence, some N265,752,599 was not unaccounted for from the Ministry’s account for the year 2016 while at the Ministry of Interior, the report revealed that in the Enugu command of the Nigeria Security and Civil Defence Corps, (NSCDC) the sum of N10, 825, 500 realized from the regulation of private guard and security companies in the state for the year 2014 – 2016 was not remitted into government chest.

It was also revealed at the Kaduna Command that store items valued at N537, 600 purchased during the year 2015, were not taken on store ledger charge, as neither SRV nor store verifier’s certificate were attached to the financial records relating to the procurements against Financial Regulations 2402(i) and 2802 which stipulate that items of store shall be duly received into the store by issuing SRV and be subjected to Stock Verifier’s examination and stamping.

At the Defence Industries Corporation, (DICON) 25 contracts worth N493,616,140.00 were awarded to various contractors in 2015 and 2016, however, the statutory 5% VAT and WHT totalling N28,118,599.51 were not deducted from the amounts paid to the contractors, thus resulting in loss of revenue for the Federal Government and this is in contravention of Financial Regulations 234(i) which states that “It is mandatory for accounting officers to ensure full compliance with the dual roles of making provision for the Value Added Tax (VAT) and Withholding Tax (WHT) on supply and services contract and actual remittance.

HEDA said the Auditor-General’s directive that the sum of N1,096,700 the total sum of the non-executed projects be recovered from the contractor has not been adhered to.

The Nigerian Industrial Court was also caught in the web of poorly accounted funds totalling N124, 632, 952 paid to 7 contractors involved in the construction and rehabilitation of NICN temporary offices/projects, without specifying details of work carried out by the contractors nor were the payment vouchers supported with vital documents to authenticate the payments thereby making it difficult to establish the contract sum, contract variation, VAT deductions, WHT deductions, details of previous payments, outstanding balance and retention fee.

At the Ministry of Justice, it was revealed that personal advances granted to various officers totalling N16, 467, 800 remained unretired contrary to the provision of the Financial Regulation 1420.

At the Senate, some advances totalling N747m were said to have been granted to staff between February and December 2016 for various procurements and services which were not retired as at the time of examination in June 2017.

At the House of Representatives, PAYE deductions from staff salaries totalling N821,564,296:48 were claimed to have been remitted to the tax authorities but receipts for the remittances were not produced for audit verification in contravention of Financial Regulation 235.

The National Institute for Legislative Drafting was also listed to be linked with over 300m funds not properly accounted for.

The National Assembly Service Commission was not spared in the scam. HEDA drew the attention of EFCC to the sun of N109,995,400:00 for training of officers on salary grade level 14 and above in Dubai, United Arab Emirates but that the audit investigation revealed that contrary to the sum of N109,995,400 approved for the training, the sum of N127,626,600 was paid through ten (10) payment vouchers to the participants as estacode allowances and to the two (2) consultants engaged for the training.

It noted that cash advances totalling N9,975,000 were granted to 34 officers as course fees whereas, a sum of N4,987,500 had been paid to a consultant as course fees with the numbers of officers slated for the training not certain.

The numbers were said to have varied from 33 officers to whom cash advances were granted to 57 and 75 who were paid estacode allowances, air tickets and letters of award of contracts to the consultants were not produced for audit.

HEDA said the Chairman of the Commission is required to justify the payment of the additional sum of N17,634,200:00 and explain the payment of N9,975,000:00 as advances to the officers and clarify the exact number of officers trained under the programme.

It was also revealed by the report that documentation irregularities were observed in the recruitment of legislative aides and this resulted to payment of salaries and allowances not worked for totalling N9,371,848:13 while the actual date of appointment of some aides were found to differ from the dates of assumption of duty by several months but the request for clarification by the Clerk of the National Assembly yielded no response.

It noted that the sum of N2,953,513:84 deducted from staff salaries as National Housing Fund contributions between January and December 2015 and purportedly remitted to the Federal Mortgage Bank of Nigeria, was not acknowledged by the bank and that the Director did not respond to a request to produce payment receipt issued by the Federal Mortgage Bank of Nigeria in respect of this remittance.

In 2011 and 2012, contracts were also awarded to seven different contractors at different locations for the total sum of N141,468,138.69 but during audit verification visit to the project sites, it was discovered that the 7 contractors had abandoned the projects, some at zero and others at not more than 45% level of completion.

The anti-corruption group said the amount paid to the contractors could not be ascertained as relevant documents were not made available for scrutiny adding that it was observed that the completion period had been grossly violated.

It noted that the Bills of Quantities and contract agreement for the contracts were not produced for inspection.

"A request for explanation why the projects were abandoned and the contracts not terminated from the Auditor-General through his Audit Inspection Report Ref. No. OAuGF/FCT/ERC/AIR2015/VOL.1/1 dated the 20th day of September 2016 was not responded to by the Director," HEDA said.

The group said at the FCT cash totalling N619,770,000:00 were paid to Waste Management Licensees and contractors, but the sum of N61,977,000.00 which was deducted as WHT & VAT from the payment was not remitted to the Federal Inland Revenue Service, in contravention of the Financial Regulations 234 and 235.

The group said the sum of N7,697,942.08 generated from payment of 2% dumpsite charge and the sum of N3,848,971.04 generated from 2% monitoring charge, could not be accounted for.

"The basis for these levies on the contractors could neither be ascertained nor traced to any provision of the Financial Regulation, Procurement Act, 2007 and extant circulars. Moreover, there was no evidence that the proceeds were remitted to the FCT Treasury, in accordance with extant rules and regulations" Suraju noted.

The group said it was revealed that a total of N142,059,000:00 was granted to 25 members of staff of the Department as cash advances to undertake various official assignments adding that further scrutiny of the relevant documents revealed that the cash advances were mainly N200,000:00 for intervention in mop-up and cleaning exercises in Satellite Towns within the FCT.

HEDA said the frequency and mode of payments as well as the analysis in the payment vouchers revealed that the term “Cash Advance” was just a ploy by the Department to circumvent the Federal Treasury Circular Ref. No. TRY/A2 and B2/2011/OAGF/CAD/026/V dated 3rd June, 2011 which stipulates that “All accounting officers and officers controlling expenditure are to ensure that all local procurement of stores and services costing above N200,000.00 shall be made only through award of contracts except as provided by the Public Procurement Act, 2007”. Financial Regulation 2302(ii) stipulates that “on no account shall special imprest or cash advance be used in place of local purchase order or job order for the procurement of stores locally”.

HEDA listed the high mismanagement of funds, negligence and overwhelming corruption in the MDAs to the tune of over N92,270,721,358.96.

Other unaccounted funds were $225,905, €4,440,835.64

The group said the funds would have gone a long way in providing the much needed infrastructural development for the poor Nigerians.

Suraju said the reports raised suspicion of fraud, corruption and sharp practices.

Informed by the mandate of the EFCC (Establishment) Act 2004, HEDA requests the Commission to investigate the MDAs indicted by the report and prosecute anyone found culpable.

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