FG may prosecute CBN, NPA, PenCom, others over un-remitted N450bn surpluses
The federal government may prosecute some revenue generating agencies for unremitted N450 billion operating surpluses into the Consolidated Revenue Fund (CRF) as required by law.
The government generated N272.03 billion in Independent Revenues between January and October 2016 but could prosecute the agencies for failing to remit the amount into the national coffers.
This is even as the Projected independent revenues is set to increase to N811.03 Billion as government recovers owed amounts and drive greater compliance going forward, according to Finance minister, Kemi Adeosun, speaking on Thursday.
Announcing the outcome of an audit process that uncovered those outstanding monies at a press conference in Abuja, Adeosun added that the agencies would be required to come up with a repayment plan.
“So far, we have identified N450 billion outstanding and recoverables as operating surpluses from various government agencies,” she stated.
The agencies which these monies are due according to her include the Central Bank of Nigeria, Nigeria Shippers Council, Nigeria Export Promotion Council, National Health Insurance Scheme, Nigeria Civil Aviation Authority, Nigeria Communication Commission, Nigeria Postal Service, National Information Tech & Dev. Agency,
Nigeria Television Authority, Bureau for Public Enterprises, National Pensions Commission, Nigeria Bulk Electricity Trading Plc, Raw Material Research & Dev. Council, Nigeria Ports Authority, Nigeria Export Processing Zones Authority, Federal Radio Corporation of Nigeria and Council for the Regulation of Engineering
She said so far, 33 agencies have been randomly audited and that the process found that actual compliance with the provisions of the Fiscal Responsibility Act, 2007 (FRA) which was designed to provide guidelines and controls to elicit greater accountability and transparency in fiscal operations was grossly violated.
This has resulted in revenue leakages as confirmed by the audit findings including Non–remittance and under-remittance of operating surpluses due to the CRF; Operating without an approved budget; Overstating of budget and spending above budgeted amount; Underreporting of revenues; and Making payments without invoices and absence of payment receipts.
The audit also found gross Failure to retire cash advances; Loans and grants to parent companies without prior approval; Poor book keeping; Failure 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; Purchase of fixed assets directly from IGRs; Inadequate internal audit process and weak internal controls.
The remaining findings include; Failure to submit audited financial statements; Payroll fraud and exaggeration of payroll costs; Overpayment of staff salaries and abuse of personnel grants; Unapproved monetisation of medical and other allowances; Staff advances and Board Members allowances in excess of approved limits; Non-compliance with the Public Procurement Act (PPA) 2007; as well as Failure to convert to IPSAS accounting.
“We have issued demand notices to those agencies that are owing us operating surplus and we have invited them for a meeting here on the 6th of December asking them to come with their repayment plans or evidence that they have paid there operating surplus into CRF,” Adeosun told reporters
Adeosun said that to control leakages and increase revenues, a Circular was issued on the approved template for the computation of operating surpluses and stated some non-allowable expenses in the computation of operating surpluses.
She also said a Recovery Committee chaired by the Accountant General of the Federation AGF has been set-up to recover the outstanding N450 Billion in a strategy that would involve Bilateral discussions. Quarterly revenue performance monitoring as well as Impromptu visits.
The minister announced that a new financing model will also be instituted for universities and hospitals taking into consideration their funding model and requirement for better controls and improved service delivery.
She disclosed that since the release of Circulars, some Agencies have started making remittances to the CRF and that up to N640 Million has so far been received from Nigeria Shippers Council.
She also said to ensure that all Government Agencies submit a budget to be approved by the National Assembly and to improve the quality of the budgeting process, a Circular was issued requesting that they submit Estimates of revenues and expenses for the next three financial years; Annual budget (IPSAS Compliant); and Projected operating surpluses.
A review team has been set-up to evaluate submitted estimates before budget submission to the National Assembly, and according to the minister, agencies which do not review and approve their budgets as advised will be restricted to payment of salaries until their budget is regularised.