How Presidency illegally moved N14bn to establish Army barracks: Audit Report

The audited report of the federal government for the 2016 financial statement from the Office of the Auditor-General for the Federation (OAuGF), Mr. Anthony Mkpe Ayine, has revealed that the presidency illegally withdrew N14 billion from the Stabilisation Fund for the establishment of an Army barracks.

The report, which is posted on the OAuGF’s website also indicated that one of the flaws among the agencies of government pointed was poor bookkeeping practices, especially in the oil mineral sector, in the management of revenue generation and expenditure, and described it as a major challenge in the anti-graft war in public finance expenditure.

The audit report cited one case of discrepancy by the relevant government agencies, which culminated in the over-payment of two revenue generating agencies, including the Department of Petroleum Resources ( DPR) and the Federal Inland Revenue Service ( FIRS).

According to the report, the overpayment stood at N837.082 billion as cost of revenue collection by the two bodies.
It said: “Our examination of the Accountant-General’s Transcript and FAAC figures revealed that the FIRS and DPR were overpaid cost of collection in the month of August 2016 in the amounts of N305,922,200.48 and N531,160,436.78 respectively totaling N837,082,637.24.

“ It was observed that what was captured in the Accountant-General’s Transcript as payments for the month of August for FIRS and DPR as cost of collection differs from what FAAC approved in the FAAC file. It is expected that only figures approved by FAAC are to be paid by the Accountant-General of the Federation. The difference resulted in overpayments of N837,082,637.24 by the Accountant-General to the two collecting agencies.”

Also contained in the report was the fact that joint venture (J V) cash calls ( funds injected into JVs by the NNPC on behalf of the Federation could not be accounted for in the books of the OAGF and the FAAC.

“These funds are obtained out of revenues accruing to the Federation that would otherwise have been paid into the Federation Account for allocation to the three tiers of government. Firstly, it is unclear how and where the asset values of these investments in Joint Ventures on behalf of the Federation are determined and reported.

“Secondly, from the analysis and review of the Revenue and Account documents presented by the Crude Oil Marketing Department (COMD) of the NNPC in respect of Sales of crude oil and gas and payment of JV Cash Call funding, it was observed that only a marginal sum was returned as revenue from Export of Crude Oil and Gas revenue inflows to the Federation Account from January to December, 2016,” the report said.

“From the total receipts by NNPC of $2,399,642,012.90 (N569,143,803,033.21 from export sales of crude oil and gas for the year, a total amount of $2,348,880,056.93(N517,354, 153,159.77) was paid out to fund JV Cash Calls, leaving only $72,875,099.00 (N22,423,859,671.82) which was paid to the Federation Account.
“It should be noted, that the above JV Cash Calls deducted from the proceeds from export oil and gas sales did not include an amount of N355,173,305,887.21 also paid from the receipts from Domestic Crude oil sales as JV cash calls,” the report stated.

It also pointed out is that the “examination of records and documents presented to the Audit Team in respect of the Excess Crude Account (ECA), revealed that a sum of N361,230,422,517.15 summarised below and classified as PPT/Royalty was deducted from total oil and gas revenue collected before the balance was paid to the Federation Account.
“These deductions would appear to contravene the provisions of Section 162 (1) of the Constitution of the Federal Republic of Nigeria, 1999 which states as amended,” it stressed.

There was also the issue of zero collection of oil revenue for some period.
According to the report, “ It was observed from the CBN Components Statements that no collections were reported into the Federation Revenue Account by some revenue collecting Agencies for certain months of the year. It was not clear from available records why these months recorded no revenue collections and no explanation was provided for this.

“The Accountant-General has been requested to obtain an explanation from the Group Managing Director of NNPC and Director DPR for the non-collection of revenue during these relevant months,” as well as “ensure that any revenue found due for these months is remitted to the Federation Account, and evidence forwarded for audit verification.”

Meanwhile, no fewer than 324 Ministries Departments and Agencies (MDAs) of the federal government failed to submit their accounts for audit in 2016, according to the report.

This figure contrasts with the 215 MDAs which did not submit their accounts in 2015.
There are over 900 MDAs at the federal level. The Auditor-General pointed out that the extensive violation of statutory financial reporting obligations by parastatals is of great concern. According to the report, as at April 2018, 109 MDAs had not submitted their accounts beyond 2013, while 76 agencies submitted last for the 2010 financial year even as 65 others never submitted any account since inception. The report was however silent on culpable agencies. “The extensive violation of statutory financial reporting obligations by Parastatals is of great concern.

Only 51 audited financial statements for 2016 and 149 for 2015 were submitted to the office of the Auditor-General as at December 27, 2017.

The report noted that the development runs foul of the Financial Regulation 3210 (v), which mandates the chief executives of agencies to submit audited accounts to the Office of the Auditor-General of the Federation, OAuGF “not later than 31st May of the following year of Account.”

Section 85 (5) of the Constitution of the Federal Republic of Nigeria 1999 (as amended), empowers the Auditor-General to submit a report on the audit of the Accountant-General’s Financial Statements to the National Assembly within 90 days of receipt of the statements from the Accountant-General of the Federation.
However, the Auditor-General observed in the 2016 audit report that the financial statements of the federal government for the year ended December 31, 2016 were first submitted to him by the Accountant-General of the Federation on June 30, 2017.

“Following my preliminary observations,” he noted, “the Statements were significantly amended and resubmitted on 29th September, 2017. Further amendments to the Financial Statements led to another re-submission on 29th December, 2017 and 16th January, 2018 before the final version was eventually submitted on 20th March, 2018.
“The Financial Statements of Government Statutory Corporations, Companies, Commissions, etc, otherwise called Parastatals are not audited by my Office, in line with Section 85(3) (a) of the 1999 Constitution. However, in accordance with Section 85(3) (b) of the Constitution, their Annual Accounts and Auditor’s reports thereon shall be submitted to me for comments.

“Most of the government Corporations, Companies and Commissions have not submitted their audited accounts for 2016 to me. Only 51 audited Financial Statements for 2016 and 149 for 2015 have been submitted to my Office as of 27th December, 2017, despite the provision of Financial Regulation 3210(v) which enjoins the Chief Executive Officers of these bodies to submit both the Audited Accounts and Management Report to me not later than 31st May of the following year of Account,” the Auditor-General added in the report.