How MDAs Incurred N5.892trillion Extra-Budgetary Spending in 2019 – Auditor General

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How MDAs Incurred N5.892trillion Extra-Budgetary Spending in 2019 – Auditor General

How MDAs Incurred N5.892trillion Extra-Budgetary Spending in 2019 – Auditor General
November 29
07:47 2021

The Auditor General of the Federation (AuGF) Adolphus Aghughu, says Ministries, Departments and Agencies (MDAs) incurred extra-budgetary spending to the tune of N5.892 trillion in 2019.

The AuGF in his 2019 report just submitted to the National Assembly claims “there were no budgets for some revenue items recognised in the Consolidated Statement of Financial Performance amounting to N5.892 trillion.”

The report AuGF/AR.2019/01, dated 18th August, 2021 and signed by the Auditor General of the Federation,  was handed over to  the Clerk of the National Assembly for onward transmission to the Public Accounts Committees of the two chambers of the Senate and the  House of Representatives.

The  AuGF said:”The resulting variances on revenue items not budgeted for could not be justified on ground of performance, the main essence of the Consolidated Statement of Budget and Actual.”

The anomalies, according to him, “could be attributed to weaknesses in the internal control system in the consolidation process.”

Besides, he said about 41 MDAs disbursed grants and contribution amounting to about N400.802 billion without budgetary provision, leading to extra budgetary spending  while another N329.988billion was spent by some MDAs as employees benefits and subsidies without budgetary provisions.

The report alleged discrepancies between the amount consolidated and amount confirmed by MDAs, to an overstatement of about N5.823 trillion, adding that the amount confirmed from thirty four (34) MDAs out of forty seven (47) MDAs that responded to the circularisation were different from that consolidated.

It also alleged that in violation of the provisions of the Fiscal Responsibility Act and the constitution, the Accountant General submitted the Consolidated Financial Statement of the government for audit on the 25th of May, 2021,10 months behind schedule.

It said: “The Accountant-General of the Federation (AGF) submitted the FGN Consolidated Financial Statements (CFS) for the year ended 31st December, 2019, to the Auditor-General for the Federation (AuGF) for audit on 25th May, 2021 through forwarding letter with Ref. No. OAGF/CAD/1724/VOL.II/220, dated 24th of May, 2021 contrary to the provisions of extant regulations. The submission was late by ten (10) months.”

Some of the agencies reported to have carried out what the AuGF called “unusual positive variances in their personnel costs” include Ministry of Budget and National Planning (N146.130 million), National Intelligence Agency (N20.769 billion), Directorate of State Services (N20.620 billion) and the Nigeria Customs Service (N10.503 billion).

Others are Nigeria Prisons Service (Now Correctional Services-N9.130 billion), Federal High Court, Lagos (N8.572 billion), Nigeria Defence Academy (N6.928 billion), Defence Intelligence Agency (N6.152 billion), National Youth Service Corps (N4.371 billion) and Nigeria Immigration Service (N3.397 billion).

Also on the list are  University of  Maiduguri (N3.471 billion), Federal Road Safety Corp (N3.379 billion), National Security Adviser (N3.095 billion), Defence Missions (N2.846 billion), Nigeria Air Force (N2.650 billion), Centre for Automative Design and Development (N2.269 billion) Police Formations and Commands headquarters (N1.492 billion), and University of Nigeria Teaching Hospital (N1.062 billion) ..

The report also said that 55 (Fifty-five) MDAs had an overdrawn or credit balance of N2.340 trillion for 2019, while another 848 MDAs had N645.063 billion positive or debit balances.

He said  the AGF failed to disclose in his financial statement judgement debts and other contingent liabilities involving Nigeria such as the judgement debt of US$6.6billion, plus accrued interest, awarded in favour of Process and Industrial Developments Limited (P&ID) by a London Tribunal in January 2017 against the Federal Government of Nigeria in a case of failed gas project decided.

It said “though the case is still being prosecuted in both the United Kingdom and United States of America Courts, Nigeria may be required to pay the judgement debts plus interest, otherwise, P&ID may be empowered to seize Nigeria’s Commercial Assets, if the case is eventually decided against Nigeria.”

The report also said that four MDAs had balances recognised as “Other Reserves” totalling N197,307,191,724.55, adding that “the nature and purpose of “Other Reserves” was not stated, asking the AGF to disclose what is meant by other reserves.

It said that the Tertiary Education Trust Fund (TETFund) presented about N14.990 billion as Available For Sale Assets Reserve without additional information to aid understanding of the assets, stressing that the AGF should provide the nature, initial recognition criteria and additional disclosure to aid understanding of the assets available for sale reserves.

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