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How 28 MDAs illegally Withdrew N13.95 Trillion — Audit Report

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A total of N13.95 trillion was illegally withdrawn by Nigeria’s federal Ministries, Departments and Agencies (MDAs), the 2020 audit report has disclosed.

Twenty-eight (28) MDAs were identified as involved in the illegal transactions following a careful review of the Bank Balances from the Consolidated Financial Statement.

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The audit report showed that the MDAs had negative balances to the tune of N13.95 trillion (N13,955,069,757,335.20), a violation of the Financial Regulations 2009 which states that: “No government bank account shall be overdrawn, or any temporary advance obtained from a bank. In the event of an account being overdrawn, the officer responsible shall be made to refund any bank charges incurred thereon”.

The figures were presented as the current portion of borrowings and current liabilities.

The Federal Ministry of Environment topped the list of the defaulting MDAs, having overdrawn N350.85 billion, followed closely by the Nigeria Stored Products Research Institute (N2.65 billion) and the Public Complaints Commission (N1.48 billion). The Federal Pay Offices in Uyo (N27.95 billion), Benin (N27.95 billion) and Ilorin (N107.50 billion) were the bottom three on the list.

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According to the Auditor–General of the Federation (AuGF), Shaakaa Chira, no approvals were granted to the MDAs for the overdraws, nor were any explanations provided by the MDAs regarding the transactions.

Mr Chira blamed the irregularities on “weaknesses in the internal control system surrounding the consolidation process at the Office of Accountant-General of the Federation,” adding that the unauthorised expenditure and non-disclosure exposed the federal government to avoidable interest payments.

However, an audit of account statements through the Government Integrated Financial Management System (GIFMIS) traced some of the withdrawals to personnel and overhead financing as well as bank charges against MDAs for the usage of the Central Bank of Nigeria (CBN) gateway—a clear negation of the essence of the Treasury Single Account (TSA).

GIFMIS is a comprehensive financial reporting system launched by the federal government in April 2012 to tackle budget management and accounting across MDAs, to address issues of economic inefficiency.

To address the discrepancies, the Auditor-General called for budgetary provisions to cover charges by service providers on MDAs for using the CBN gateway.

He also recommended that the Accountant General of the Federation “forward a schedule of transactions that gave rise to the negative cash and cash equivalents recognised by the twenty-eight (28) MDAs, along with the bank statements of the affected MDAs, to the Public Accounts Committee of the National Assembly”.

Mr Chira further recommended that sanctions relating to irregular payments from public funds prescribed in paragraph 3106 of the Financial Regulations apply. Paragraph 3106 states that: “A public officer who makes an irregular payment from public funds, shall be given 21 days notice to offer an explanation. Where no satisfactory explanation is given, the amount involved shall be recovered from the officer and such officer shall be removed from the schedule.”

Expert reacts

Meanwhile, Development Expert Adenike Aloba has called for the expansion of the powers of the auditor–general beyond mere audit recommendations to forestall the occurrence of financial misappropriations and to fix the loopholes in the country’s financial regulatory system.

“The auditor-general needs more power than friendly reminders and sternly worded requests for documentation. The watchdog community, CSO and media, have continued to say this and the Nigeria Audit Service Bill 2022 was part of the outcomes for a strengthened office of the Auditor-General,” she said.

“Although the Bill was passed in the House of Representatives, unfortunately, the 9th Senate did not pass the bill. There are clear benefits to the auditor-general having more power to do his job, which is the most effective strategy for dealing with these issues.”

 

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