FG discovers N450 billion operating surpluses withheld by MDAs

Federal government on Wednesday, disclosed that it has recovered a whopping sum of N450 billion ‘operating surplus’ from 33 agencies audited so far.
Minister of Finance, Mrs. Kemi Adesoun, made the disclosure while briefing finance reporters in her office in Abuja.
Mrs. Adeosun, who was flanked by the Accountant General of the Federation Mr. Ahmed Idris and the Permanent Secretary of the ministry, Mr. Mahmoud Isa-Dutse, said that the discovery was an outcome of a five year audit conducted between 2010 and 2015.
The Minister decried non-compliance with the Fiscal Responsibility Act (FRA) 2007, which was designed to provide guidelines and controls to elicit greater accountability and transparency in fiscal operations.
“Actual compliance with the provisions of the Act has been poor resulting in revenue leakages as confirmed by our audit findings, including non-remittance and under-remittance of operating surpluses due to the Consolidated Revenue Fund (CRF); operating without an approved budget and overstating of budget and spending above budgeted amount.”
According to the minister, this failure has also resulted in “underreporting of revenues, making payments without invoices and absence of payment receipts, failure to retire cash advances, loans and grants to parent companies without prior approval and poor book keeping.”
They have also failed “to reconcile accounts and existence of irreconcilable differences, lack of a fixed asset register and sale of assets to staff, fixed asset register not updated with all items purchased and purchase of fixed assets directly from IGRs.”
According to Mrs. Adeosun, this poor adherence to proper accounting procedures, ultimately led to inadequate internal audit process and weak internal controls, failure to submit audited financial statements, payroll fraud and exaggeration of payroll costs.
These agencies have also overpaid staff salaries and abused personnel grants, embarked on unapproved monetization of medical and other allowances, paid staff advances and board members’ allowances in excess of approved limits, non-compliance with the Public Procurement Act (PPA) 2007 and general failure to convert to International (Public Sector Accounting Standard (IPSAS) accounting.
In explaining steps that have been taken to arrest this deplorable situation, the minister said mechanisms have been set to increase the number of government agencies required to comply with the strict provisions of the FRA, including remitting 80 per cent of their operating surpluses.
She pointed out that a circular on the inclusion of 92 additional Corporations, Agencies and Government Owned Companies to the schedule of the Act was issued on the 21st of November, 2016.
Consequently, the government will ensure that all Government Agencies submit a budget to be approved by the National Assembly and to improve the quality of the budgeting process.
Accordingly, a circular was issued requesting submission of key documents for review and approval to avoid further flagrant abuse of the accounting process.
She said MDAs are to submit estimates of revenues and expenses for the next three financial years, annual budget (IPSAS Compliant) and Projected operating surpluses.
She warned that “agencies that do not review and approve their budgets as advised will be restricted to payment of salaries until the budget is regularized.”