•MDAs to get approval for budgets, face audit
•Fed Govt denies withdrawal of budget proposal
THE Federal Executive Council (FEC) yesterday endorsed President Muhammadu Buhari administration’s initiative to scrutinise and plug leakages in ministries, departments and agencies (MDAs) generating revenues.
Minister of Information Lai Mohammed and Minister of Finance Kemi Adeosun, who briefed State House correspondents after the FEC meeting presided over by the President, said the main presentation to FEC was to remind ministers, who supervise the revenue-generating boards of their responsibilities under the Fiscal Responsibility Act (FRA).
The Finance minister noted that the Federal Government had discovered that many revenue generating agencies never credited any operating surplus to the Federation Account.
She said the FEC meeting decided to bring those agencies into line, to insist that they must submit their budgets and get approval.
The minister added that the Office of the Accountant-General of the Federation would soon audit some defaulting MDAs and boards.
Mrs. Adeosun words: “Let me remind you that under FRA, these boards and corporations, which generate revenue are supposed to generate an operating surplus. Eighty per cent of which is to be credited to the Consolidated Revenue Fund. But we have discovered that many agencies have never credited anything and never generated any operating surplus, including some whose salaries, overheads and capital are paid by the Federal Government.
“Then in addition, they generate revenue, which they spend without any form of control. So, one of the big initiatives and changes of this administration is to bring those agencies into line, to insist that they must submit a budget, that budget must be subject to approval and they must operate within that budget so that the surplus that is meant to come to the Federal Government can be seen to be used as appropriate.
“So, for clarification, let me just explain that in economies that are non-oil economies, these are the revenues of government. It was because we had oil in the past, nobody has ever really looked at the MDAs, Nigeria Communications Commission (NCC), boards of government and they are many. In fact, they are in their hundreds.
“We had issued a circular in December requesting that they send us their budget and what we discussed today was the responsibility of the ministers to ensure that whether those agencies have boards or not, those budgets are prepared and that the Ministry of Finance is going to sit down with the supervising ministers and with the boards concerned, where necessary, to go through their budgets and make sure that they are reasonable and that the costs are not inflated.”
She added: “We also discussed that in some cases, because some agencies have a track record and history of making sure that every Naira they earned is spent, that we will go in and audit agencies under Section 107 (8) of the Financial Regulations. The accountant-general, who is under the Ministry of Finance, has the powers to go in and make enquiries about how public money is spent.
“So, we will be sending in auditors to some agencies where we believe everything that their cost is simply excessive and not in keeping with our expectations.”
She said the expected outcome of the new move was to boost Internally Generated Revenue (IGR).
Mrs. Adeosun confirmed that every minister endorsed the initiative and were in support of plans to stop revenue leakages.
The minister added: “We are going to make every Naira counts and to make every Naira counts, we have to know how much is coming in and you control how it goes out. The ministers concerned agreed that enough is enough and they even identified boards and agencies under them, where they know that revenue is being diverted.
“So, the key message is that change has now come to those agencies, boards of those corporation, which have been hitherto operating without any control, as we are reining them in and making sure that money is generated for Nigerians and is spent according to approval and any surplus then comes into CRF to be used to fund other areas of government.”
The two minister denied that the Federal Government withdrew the 2016 Budget proposal presented to the National Assembly last month.
Reports, especially on social media, had attributed the purported withdrawal to suspicious bloating of budgetary votes in the proposal.
Mohammed said: “When somebody called me, I told him categorically that there was nothing like that. When a story like this breaks, I believe it will help us to actually be able to pinpoint the source.
“I know for a fact that this administration has not withdrawn the budget from the National Assembly.”
Mrs. Adeosun said: “Let me just speak to you about the budget process. You know the budget is presented to the National Assembly and then there is what we call an interactive budget approval process and you know the agencies will still go and defend their budget at the National Assembly.
“So ordinarily in budget processes anywhere in the world, there can’t be amendments to the budgets arising from that interactive process, which is normal. But let me make it clear, the budget is not being withdrawn or replaced; the budget has been presented and will go through normal process whereby ministries, departments and agencies (MDAs) defend their budgets.”
Stressing that it would be unpatriotic and unrealistic for MDAs to pad the budget, the Finance minister said such action would not see the light of the day with the falling oil prices in the international market.
She said: “To answer that question, let me give as context, oil price has come down from $112 to $34-$35. Anybody that is talking about padding any budget when there is no revenue, is just not serious.”
Mrs Adeosun added that the government had set up efficiency unit to look into how money is spent and the savings.
Noting that a comprehensive audit of all agencies that collect money in foreign currency and remit in Naira had been done, she maintained that the requirement was that such dollar revenue should go to the Central Bank of Nigeria (CBN), which will exchange it into Naira.
According to her, the government had stopped the practice of government agencies remitting dollar revenue in Naira.
“What we discovered in some agencies as you said have been doing that, we have stopped it. But we are now doing an audit to identify other agencies. But what we have identified is that the agency concerned was the Nigeria Maritime Administration and Safety Agency (NIMASA). But we discovered that there are other agencies we have not identified, which also collect funds in foreign currencies, including our foreign missions.”
She said: “So, we are doing a full audit of those accounts to ensure that they are in accordance with the extant procedures and guidelines.
“With Section 108 of the law, what I would say is let’s see the results of those audits because it will be unfair to pre-empt the outcomes of those audits. But it is clear that the financial procedures have been breached. Of course, there is a process for dealing with the culprits of any of such sharp activities.”
