Barely three years after a German funding partner, GIZ, gave the multi-billion naira Lagos State Employment Trust Fund (LSETF) a grant of N17 million for skills development and youth programme, a year-long investigation by KUNLE AKINRINADE has revealed how original copies of vital procurement documents about the project were destroyed in a controversial manner and infractions of Tender processes, leading to a demand for a refund of the sum of N14 million by the international donor.
BEFORE a cheering crowd of participants at the second Lagos Employment Summit on Thursday, March 3, 2022, Governor Babajide Sanwo-Olu announced a 100 percent increment in capital subvention to Lagos State Employment Trust Fund (LSETF).
As part of his scorecard, Sanwo-Olu revealed that his administration had in the last three years committed more than N10 billion in grants to boost LSEFT’s activities and supported over 34,000 micro, small and medium enterprises (MSMEs).
The governor, who spoke on the theme: “Sustainable Job Creation Strategies: Collective Action and Prosperity for All”, at the event held at Eko Hotels and Suites in Victoria Island, gave LSETF’s management a pat on the back for stellar performances since the inception of the agency.
He said: “We have seen that LSETF can work and indeed, it is working. We have seen the potential of the agency in sustaining the creation of job opportunities for our teeming productive residents. I strongly believe that we can achieve a lot more in bringing down the unemployment rate in Lagos if we entrust the agency with a lot more capital grants to support businesses and innovative people.
“We are doing this because the LSEFT management team has given us practical proof of concept that the intervention can boost employment opportunities.
“In this regard, I make an appeal to our funding and development partners to also double their donations to the agency, because there are more people in the state to be taken out of poverty when they have access to business finance.
“This way, we would be empowering more people to create wealth and spread prosperity.”
LSETF was established in 2016 via a law enacted by the Lagos State House of Assembly, with a take-off grant of N25 billion provided by the state government to provide financial support to over 100,000 Micro, Small, and Medium Enterprises (MSMEs).
In its pilot scheme in January 2017, around 705 entrepreneurs emerged as the first set of beneficiaries of the LSETF loan scheme, designed for enterprise development and economic productivity.
It would seem, however, that the governor was unaware that the much-applauded performance of the multi-billion naira employment agency belied the unethical practices that have blossomed in the closets of the agency in recent times.
Violation of terms of contracts
Issues that border on destruction of procurement documents and records as well as flight of due process in the handling of a multimillion-naira grant received from a German funding partner, Deutsche Gesellschaft Fur Internationale Zusammenarbeit (GIZ) GmbH in 2018 have continued to haunt the employment agency to date. Like a festering sore, the N17 million grants for skills development and youth employment programme given to LSETF by GIZ have shaken the integrity and credibility of the agency and have refused to heal.
The financial agreement brokered between LSETF and GIZ stipulates that the grant was meant to organise a youth skills development and empowerment programme that would run for a period of four months (November 2018 to February 2019) while beneficiaries would be given job placement with stipends.
As part of the conditions for the grant, according to sources, GIZ requested that LSETF must implement the project in accordance with its procurement procedure, which includes that vendors and Vocational Training Centers (VTCs) previously contracted for similar programmes funded by other donors must not be engaged for the new project.
Also, open competitive bidding was required by GIZ, requiring that no fewer than three VTCs must submit bids for each of the sectors of the skills acquisition programme- hospitality, catering, fashion design and carpentry among others.
It turned out that LSETF infracted the agreement as some vendors and VTCs were awarded contracts without going through the tender process as demanded by GIZ in the agreement with LSETF, and also in clear violation of the Public Procurement Law of Lagos State 2021, which states in Sections 26(1 a) and 28(3) respectively that: “that there shall be open competitive bidding, using clearly defined criteria and offering to every interested bidder, equal information and opportunities to offer the works, goods, and services needed…the Tender’s Board shall have the power to award and be responsible for procurement of goods, works, and services within the Benchmark set in pursuant to this Law.”
Instead, the employment agency merely re-evaluated some existing VTCs and vendors it had engaged for similar projects funded by an international funding partner. Also, the agency disregarded the funding agreement which required that the staff of the agency would not be engaged to implement the project by deploying its staff members to the field to implement the programme as the project team.
In a routine exercise to find out if LSETF had complied with the project implementation, the international development partner discovered that certain critical aspects of the terms of the agreement had been infracted by the agency.
Disturbed by the development, GIZ, among others, requested that the original copies of certain procurement documents relating to how the bids were opened, a letter of engagement issued to ad hoc personnel of the project team, justification for using the state public procurement policy and approval for the engagement of the agency’s staff as personnel of the project team (in contravention of contract terms to employ ad hoc staff) be provided by LSETF.
Although LSETF hinged its recourse to the use of the Lagos State Public Procurement guidelines or policy on adherence to the sanctity of public procurement law of Lagos State as the reason for non-compliance with the use of GIZ’s procurement procedure in the implementation of the project, it could not, however, provide some vital procurement documents on request by GIZ.
From 2020 to 2021, GIZ, through various communications and correspondences to LSETF, demanded certified copies of the relevant documents about the project in order to comply with the requirements of the annual audit exercise of its country office in Abuja, which was to start in July 2021.
One of the correspondences signed by one Motunrayo Ewumi, sighted by our correspondent dated May 4, 2021, GIZ said: “Please find attached observations from the documents sent in last week. Also note the following: 1. All tender documents must be submitted including the documents (proposals) submitted by other vendors. 2. Justification for the procurement process must be documented, signed, and stamped; the email trail does not suffice. 3. Tender process (is) not carried out for some vendors e.g Career4all, a justification must be documented as to why the vendor was selected instead of going through the tender process.”
A few days later, another letter signed by GIZ’s Ewumi, dated May 19 reminded LSETF of the need to provide necessary supporting documents it had earlier reiterated during a meeting held at the instance of LSETF.
The letter reads: “Sequel to the meeting we had on Monday, May 17, 2021, find below the details of the documents required. 1. Justification letter regarding why the Lagos State procurement policy was used and also for the vendors that were awarded the direct contracts without going through the tender process. 2. All necessary supporting documents should be included and previous ones should be checked to ensure they are correct and factual. 3. All tender documents should be submitted as discussed. 4. Justification letter for the LSETF personnel that worked on the project (Financial Agreement). Please ensure to submit the documents as discussed by Friday, May 28, 2021.”
Discordant tunes over recycled documents
Documents sighted by our correspondent showed the total value of the grant was N17, 984,000. The Financial Agreement (FA) summary shows that LSETF was to spend the sum of N1,079,040 on Publicity; N1,079,040 on Project Team; N16,106,560 on Training Cost and N719,360 on Monitoring and Evaluation.
Out of the total contract sum, a sum of N1,022,600 was expended on Publicity, and N616,140 was spent on Monitoring and Evaluation making a total N1,638,740. Relevant original documents were not provided by LSETF for the remaining expenditure.
The matter dragged on for weeks thereafter as GIZ awaited the submission of the original outstanding procurement documents it requested from LSETF.
In the face of the sustained pressure mounted on LSETF by GIZ for the submission of the documents and records on the project, the Executive Secretary of LSETF, Ms. Tejumola Abisoye, said in a letter to GIZ that original copies of procurement documents relating to the project kept in the custody of the Lagos State Records and Archives Bureau (LASRAB) were recycled and could not be retrieved.
She attributed the circumstances surrounding the recycled documents to lack of supervision by the Procurement Department under the watch of one Mrs. Temitope Adeyemi, who resigned a few days earlier and relocated abroad.
The letter reads in part: “This outstanding document issue has been brought to my attention. My understanding is that we at LSETF has (sic) had some issues with the documents stored since 2016 and was (sic) experiencing storage constraints. We had contacted the Lagos State Records and Archives Bureau (LASRAB), to help us with (a) storage solution for documents that had electronic copies. The communication to the affected units excluded the Procurement Unit.
“However, the Procurement Unit documents were erroneously included due to a lack of supervision and they did not have electronic copies. We only recently commenced an Electronic process for all Procurement activities at LSETF in 2020.
“When we tried to retrieve the document from LASRAB, we were advised that the documents collected were recycled and cannot be retrieved. The Procurement Approvals are however available as copies in Finance Unit. I also understand that some documents were requested from potential vendors.
“The employee responsible at that time has since resigned-Mrs. Temitope Adeyemi. At this time, we are not able to provide the original copies requested, for which I take full responsibilities. We apologise for the inconvenience and can ensure (sic) you this will never happen again.”
The Public Procurement Law of Lagos State 2021 Section 26(12) on Governing Rules on Public Procurement stipulates that “every procuring entity shall maintain both file and electronic copies of all procurement proceedings made within each financial year. The procurement records shall be maintained for a period of ten years from the date of the award of the contract.”
Curiously, as of the time of the purported recycling of the documents at LASRAB, LSETF was just five years old, raising questions as to the rationale behind the early destruction of the said documents.
Subsequently, GIZ demanded from LSETF the refund of the N14 million balance of the N17 million project for which there were no supporting original copies of procurement documents to back its spending.
In a dramatic twist, Mrs. Adeyemi, who had resigned from the employ of the agency on September 1, 2021, and had proceeded on her exit leave got wind of Ms. Abisoye’s letter to the GIZ few days into her exit leave in September 2021. She subsequently forwarded a letter to GIZ denying her complicity in the said destruction of original procurement documents at LASRAB.
She stated that Ms. Abisoye lied in her letter to GIZ wherein she linked her to the destruction of the procurement records.
The letter reads in part: “The previous response by the Executive Secretary (Ms. Abisoye) has prompted my response at this time…The LSETF Procurement Unit received a request from GIZ to provide all necessary documents for the FA (Financial Agreement) and GA (Grant Agreement) grant projects. In the process of gathering these documents, I was informed that the documents have been recycled/destroyed. I was surprised by this because as far as I am aware in my professional capacity, a Lagos State (procurement) document can only be destroyed after 7-10 years.
“The previous email (from Ms. Abisoye) suggests that I was responsible for this, which is a misstatement of the facts. To put it bluntly, this is a lie and I need to protect both my integrity and career. The procurement approval memo clearly stated that the documents are been (sic) sent to LASRAB for safekeeping and archiving purposes. It was at no time communicated to the Procurement Unit that the documents would be destroyed, so how come I am responsible for this?
She added: “From the previous mail, it can be misconstrued that this unfortunate incidence (sic) is the reason for my resignation. This is not so as I have to pursue my career objectives with other organisations that will align with my core values and principles of work in my chosen profession.”
An inquiry forwarded to the email address of Mrs. Adeyemi, who now resides in the United Kingdom (UK), was not responded to as of the time of publishing this report. Also, the identity and contacts of two female officials who were said to have worked with Mrs. Adeyemi at the Procurement Unit were not known at press time.
“Two ladies worked under the supervision of the former Head of Procurement Unit, Mrs. Adeyemi. I do not have their details and contacts, but I am told one of them has also been redeployed from the department,” a source told our correspondent.
LASRAB DG/LSETF responses
In a telephone conversation with our correspondent on July 23, 2022, the Director General of LASRAB, Ms. Bilikis Adebiyi-Abiola explained that documents moved into the custody of LASRAB are usually retrievable and can be provided by LASRAB on request by any agency the documents belong to.
She stated that her agency would not destroy documents kept with it without the consent of the public agencies or parastatals that moved the documents into LASRAB’s custody for safe keeping.
She said: “We are the agency of government responsible for record management and archive in Lagos State. No agency of government can destroy, dispose or recycle any document without our consent.
“We are the ones that work with them to come up with a retention schedule which is basically the amount of time that a document can be used. For example, in line with the procurement law of Lagos State, procurement documents are supposed to be used for 10 years before they can be recycled.
“If an agency decides that it has documents or papers they are no longer using because a lot of agencies are struggling for space with old papers they cannot destroy by themselves, they would call us to come to take the documents into our custody.
“But they would have to write us an official letter stating that those papers have reached their life cycle and we take it up from there by assessing to see if truly the papers have reached their life cycle. We take them away from there and we see if the papers can be archived or not. ”If the papers have no archival value for Lagos State Government, we would recycle them.
Adebiyi-Abiola however declined comments on whether or not the procurement documents were recycled while in the custody of LASRAB.
She said: “In response to your question, I wouldn’t want to say that we (LASRAB) did it (recycle the procurement documents) for LSTEF or not because we have to protect their privacy.
“You know I am working for all government agencies and they have to be comfortable with me that this woman would not be saying this and that about them. So I have to protect their privacy.
“We have the right to do it (recycling documents) and we are doing it for all agencies. But for me to tell you that we did it for this particular agency, I can’t say it.”
Asked further to clarify whether or not there was a correspondent from LSETF requesting LASRAB to recycle some procurement documents, Adebyi-Abiola reiterated that her agency couldn’t have destroyed documents moved into its custody for safe keeping.
“No. We can never do that. As I said, I am not going to say anything specific about the matter because it could be LSETF or any other agency.
“But if any agency asks us to safe keep their documents, what do we gain by destroying them (documents)? Do you understand what I am saying?
“For us to destroy any document, it’s because we have been told by the agency that owns such documents to destroy them, probably because such documents are taking up a lot of space in their office. And when they are coming for retrieval, an officer from the agency will come with an official letter requesting such retrieval and there would be payment for retrieval.
“And when documents are recycled, they are gone. And for somebody to now use our name to say that we did something (recycled documents) without the request from an agency is unfair, because we follow protocol and we have not seen any letter of such.
“However, if any documents have been kept with us in our record centre, they will be there and they would be provided on request for retrieval if truly they are kept in our record centre.”
She urged our correspondent to first of all get clearance from LSETF before she could answer the question about whether or not the documents were destroyed by LASRAB.
“Can I say this, contact LSETF and ask them that you want to ask LASRAB this question and that LASRAB is not giving you a straight answer because LASRAB wants to protect your (LSETF) privacy. Ask LSETF to tell LASRAB if it’s okay (to answer the question).
“But if you want me to say specifically to the fact that there was a recycling of procurement documents belonging to LSETF, I won’t, because I am a professional. I can’t respond to such a question because it’s unethical.
“If I speak and my comments look good I know that such comments would make me run afoul of public service rules, and as the DG of an agency I have to get official clearance to speak on such a matter.
In her response on the telephone, Ms. Abisoye said as the Executive Secretary of LSETF, she has since taken full responsibility for the destruction of the procurement documents in her official communication with GIZ.
She said: “Yes. I agree hundred per cent and I take full responsibility which I already did with GIZ. I take hundred per cent responsibility because as the chief accounting officer, if anything goes wrong (at the agency) at any level of each stage I am responsible and I have taken full responsibility for it.
“I don’t believe in casting aspersions on people. Most importantly, what I normally say is that when you make a mistake, you have to take the next steps to make sure that you don’t make such a mistake ever again. And I think for us at LSETF we will make sure that we tighten things to make sure that that kind of thing doesn’t repeat itself again.
“Like I said, at the end of the day, it is an LSETF’s responsibility. I can’t speak for LASRAB and I don’t think they have (anything) in this case. I just told you I have taken full responsibility for the (recycling of) the documents and I don’t believe in throwing people under the bus.
“I think there’s a lot to learn in public service as there are many things you may not get answers to in public service. But you just have to do your best at all times and let God judge.”
Conflicting explanations
Explaining that the circumstances of the recycled procurement documents have led to the stoppage of funding of LSETF’s activities by GIZ, Ms. Abisoye said: ”LSETF made a mistake. It could still affect GIZ because they are the ones providing funds for some of our programmes, and when we stop receiving funds (from GIZ) because we have given them bad press, which they would consider as bad publicity, we would lose that relationship.
“Already because of the documents issue, we already lost it (funds from GIZ).
“GIZ hasn’t given us any funding, although they still have something going with the Lagos State Government, but not with LSETF anymore.
“We haven’t had any renewed agreement with GIZ since this incident happened.
“As of today, we have trained over 500 people. So, the relationship with GIZ is not one that we can take for granted.
When our correspondent asked Ms. Abisoye to confirm the N14 million refund demanded by GIZ following the inability to provide original copies of procurement documents to justify the implementation of the project, she asked our correspondent to send a mail requesting her official response on the matter.
In an email sent to our correspondent on August 18, 2022, Ms. Abisoye said: “In response to your email of 12th August 2022 for the Lagos State Employment Trust Fund’s (the “Fund”) position regarding the above subject matter, please note that the Deutsche Gesellschaft Fur Internationale Zusammenarbeit (the “GIZ”) GmbH is one of the Fund’s partners. They entered into a Financial Agreement with the Fund on August 17th, 2018 for the sum of NGN17, 000,000.00 – for a period between 12th November 2018 and 28th February 2019.
“As part of the conditions for the grant, the Fund had an obligation to follow GIZ’s internal policy on procurement processes.
“Unfortunately, we found ourselves wanting with this obligation by following the Lagos State Government’s Procurement Rules and recycling unprocessed documents received during implementation. This was/is in accordance with the Lagos State Records and Archives Bureau (LASRAB) directions, guidelines, and the Lagos State Government Civil Service Regulations.
“As a result of this conflict, the GIZ requested the refund of the balance of the grant, which the Fund was obligated to refund in accordance with the agreement.”
Against her earlier explanation that the controversial document matter had cost LSETF further funding from GIZ, Ms. Abisoye said the LSETF had closed ranks with GIZ with attendant partnerships on some projects.
“Following this incident, the Fund realigned its processes with the GIZ and both organizations continue to partner on different programs, including facilitating Peer Learning Programs for other State agencies which the GIZ is supporting with grants.”
Responding on Thursday to an inquiry earlier sent by our correspondent on August 11, 2022, GIZ’s Head of Project, Tobias Wolfgarten admitted that the procurement documents at LSETF were recycled and that it was important that the balance of the grant should be refunded to GIZ.
The letter reads: “I write in response to your enquiry with respect to funding provided by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH to the Lagos State Employment Trust Fund (LSETF). Please excuse the belated response. Unfortunately, your email was filtered out by our system and was found in the spam folder.
“Regarding your request: GIZ partners with the LSETF through the provision of grants for its skills development and youth employment program. Both parties have been committed to the terms of these grants.
‘Following a regular review of LSETF’s compliance with procurement stipulations under one of the grants an error was identified in relation to procurement under the said grant: LSETF noted that in compliance with extant Directions and Regulations in Lagos State, it had recycled unprocessed documents received during the implementation period relating to the grant.
“Due to GIZ’s procurement rules, provided in the agreement for the grant, LSETF had to provide the documentation in order to receive the fund.
“It, therefore, became necessary for LSETF to refund the balance of the grant to GIZ thereby marking a conclusive resolution of this issue.
“The correction of the error does not imply GIZ has general concerns with the compliance with LSETF and GIZ will continue the cooperation with LSETF.”