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Tag: MDAs

  • Buhari to MDAs: comply with Single Account order

    President Muhammadu Buhari  yesterday  gave next Tuesday’s deadline for full compliance with his directive for all revenue due to the Federal Government or its agencies to be paid into the Treasury Single Account (TSA) or designated accounts maintained and operated in the Central Bank of Nigeria (CBN).

    A circular issued to all Ministries, Departments and Agencies (MDAs) of the Federal Government by Head of the Civil Service of the Federation, Mr. Danladi Kifasi, urged the MDAs to ensure strict compliance with the deadline to avoid sanctions.

    The circular – HCSF/428/S.1/125 of September 4, 2015, according to a statement by the President’s Special Adviser on Media and Publicity Femi Adesina, noted that a number of MDAs were yet to comply with Circular Ref. No. HCSF/428/S.1/120 of August 7, 2015 which conveyed President Buhari’s original directive on the payment of all Federal Government revenue into a Treasury Single Account.

    The new circular reads: “In this regard, His Excellency, Mr. President has directed that all MDAs are to comply with the instructions on the Treasury Single Account (TSA) unfailingly by Tuesday, September 15, 2015.

    “Heads of MDAs and other arms of Government are enjoined to give this Circular the widest circulation and ensure strict compliance to avoid sanctions,” Mr. Kifasi wrote.

  • Reps probe MDAs over N700b capital projects

    Reps probe MDAs over N700b capital projects

    With effect from tomorrow, the House of Representatives adhoc committee on the non- implementation of capital projects in the 2015 Appropriation Act will commence an investigative hearing with ministries, departments and agencies (MDAs) in attendance.

    In the absence of substantive ministers, Permanent Secretaries of Federal Ministries would have to explain to the lawmakers factors responsible for the  non-implementation of the N700.78 billion component of the N4.4 trillion approved in the 2015 Appropriation Act by the National Assembly with three quarters already gone of the fiscal year.

    The National Assembly while considering the Executive’s  2015 budget, proposal increased capital expenditure from N633.53 billion to N700.78 billion and reduced recurrent expenditure from N2.616 trillion to N2.584 trillion.

    The Ahman Pategi headed Committee is expected to assess the performance of Federal Ministry of Finance in carrying out its mandate as contained in the Appropriation Act and Section 30(1,2) of the Fiscal Responsibility Act 2007 and report back to the House on resumption on  September 29.

    Just before the House went on recess, a motion titled “Non-implementation of capital projects as Contained in the 2015 Appropriation Act; Federal Government budget and serial breach of the Fiscal Responsibility Act by the Federal Ministry of Finance and threats to my effective representation of my constituency,” sponsored by a member, Hon. Patrick Asadu (PDP-Enugu) acted as a catalyst for the resolve of the lawmakers to institute the probe.

    When the debate began, members expressed worry over the report that over 11,000 projects were abandoned across the country and warned that further delays in the implementation of the 2015 capital budget will expose the country to higher eventual expenditures on the same projects.

    While presenting his argument on the motion, Asadu said the non release of funds for the implementation of the capital components of previous Appropriation Acts was worrisome.

    He said:  “By Sections 81 and 82 of the 1999 Constitution as amended, the Federal Government expenditures must be either as direct charges on the constitution, as contained in the Appropriation Act or supplementary Appropriation Act where applicable or as may be specifically prescribed by the National Assembly, while Section 30(1) of the Fiscal Responsibility Act clearly mandates the Hon. Minister of Finance through the Budget Office to monitor and evaluate the implementation of the annual budget, and assess the attainment of fiscal targets and report thereon on a quarterly basis to the Joint Finance Committee of the National Assembly and to also publish same in the mass and electronic media not later than 30 days after the end of each quarter of the financial year.

    “There has not been any constitutional amendment adjusting the financial year by the National Assembly nor has any public announcement has been made by the Ministry of Finance in any mass and electronic media on the implementation of the budget and attainment of fiscal targets.”

    Speaker Yakubu Dogara thereafter inaugurated an adhoc committee headed by Pategi to ascertain the level of implementation of the capital expenditure of the 2015 Appropriation Act after members overwhelmingly voted in favour of the motion.

  • Charging application fee by MDAs illegal, says FCC

    Charging application fee by MDAs illegal, says FCC

    The Acting Chairman, Federal Character Commission (FCC) Mohammed Bello Alkali yesterday frowned at the practice of collecting application fees by Ministries, Departments and Agencies (MDAs) for application online, describing it as illegal.

    Alkali who spoke with reporters in Abuja, stated that it has come to the notice of the FCC that MDAs have been charging applicants what they call application fee, for job processing, insisting that it was wrong.

    He said: “The application fee charged by these MDAs ranges from between N2,000 and N3,000.

    “This practice is illegal as it runs contrary to Federal Character Commission guidelines on recruitment into the Nigerian public service as well as Presidential Directives on Recruitment which completely stopped buying of scratch card.

    “The commission will henceforth, without further notice sanction any Chief Executive of MDAs that flout these guidelines.”

    Alkali said the commission is on a sensitisation campaign, notifying applicants that they are not supposed to pay fee for job whether on-line or hard copy.

    Recruiting MDA should arrange for the payment of approved consultants without taking the applicants’ money, he said.

  • Commission urges Fed Govt to fix debt limit for MDAs, states

    Commission urges Fed Govt to fix debt limit for MDAs, states

    The Acting Chairman, Fiscal Responsibility Commission (FRC), Victor Muruako yesterday appealed to the Federal Government to fix debt limit for Ministries, Departments and Agencies (MDAs), as well as the state governments.

    He said although the FRC Act stipulates that 90 days after the commencement of the Act, governments should fix debt limit, steps have not been taken to fix the limit of how much governments and agencies can borrow or owe.

    This  has given the states and  MDAs the liberty to borrow endlessly, pointing out that the lacuna, has made it impossible for the commission to hold the establishment accountable for exceeding any debt limit

    Muruako, who spoke at the meeting on modalities for Fiscal Responsibility Index in Abuja, said the states and federal government’s MDAs have always hidden under the belief that there is no prescribed constitutional limit to how much they can borrow  or owe, hence, they cannot  be controlled in this regard.

    “The Act provides that 90 days after its commencement,  the federal government should take the bold step to fix the debt limit As we speak, no step  has been taken along that line to fix the debt limit so that leaves the door open that even when you accuse some agencies and some states of over borrowing they will ask you what is their limit. Of course, we don’t have it. So, we are appealling that at this stage the debt limit should be fixed,”Muruako said.

    He revealed that the Commission  succeeded in getting the MDAs to remit over N350billion to the Consolidated Revenue Fund (CRF) as at May 2015.

    He said that all the  MDAs and the scheduled corporations are required to supply accurate and reliable data and information to the commission on request, failing which the commission is empowered by Section 2(1) of the FRA to compel the defaulting person or agency to comply.

    He called on the Federal Government, the MDAs, parastatals and the National Assembly to cooperate and ensure that the budget planning starts in April and the Appropriation Act is signed latest by the end of December in the year preceding the budget year so that the implementation of the budget can commence from January of the budget year.

    According to Muruako, “government has since 2009 not kept to the provisions of Section 12 of the FRA which puts the fiscal deficit threshold at three per cent of the GDP. This violation is a major threat to the objectives of the Act.

    On operating surplus and general reserve fund of schedules corporations, the he said that section 22 of the Act provides that one-fifth (20%) of the operating surplus is to be retained by each of the scheduled corporation at the end of each financial year, while four-fifth (80%) of the operating surplus is to be paid into the Consolidated Revenue Fund of the Federation.

    Some MDAs, said Muruako, use different accounting methods and practices in arriving at the operation surplus.

    He added that : “In order to standardize the practice, the commission has come  up with an operating surplus template that will soon be presented for discussion and possible adoption.”

    Speaking, Barrister Eze Onyekpere of Centre for Social Justice and Fiscal Responsibility Index (FRI) sought for the review, inputs and critique of the FRI process so as to make it responsive to the needs of MDAs and the service delivery process.

  • NYSC to MDAs: don’t reject corps members

    NYSC to MDAs: don’t reject corps members

    THE  National Youth Service Corps (NYSC) yesterday urged organisations, especially Ministries, Departments and Agencies (MDAs), to always accept corps members posted to them for primary assignments.

    In a statement in Abuja, the scheme’s director general, Brig.-Gen. Johnson Olawumi, said corps members are posted based on their disciplines and within the limits imposed by the NYSC posting policy.

    He told employers that the corps members answered the clarion call to participate in the national service out of patriotism and always looked forward to rendering services for the country’s progress.

    Brig.-Gen. Olawumi said: “In view of the foregoing, all stakeholders, including employers, are requested to always give the young men and women of the scheme the necessary support and encouragement by accepting them whenever posted for primary assignment.

    “It is noteworthy that rejection of corps members posted to organisations, resulting in some of them roaming the streets in search of places of service, is at variance with the ideals of the founding fathers of the NYSC scheme and should therefore be discouraged by all well-meaning Nigerians.

    “On our part, we in the NYSC remain committed to contributing to the socio-economic development of our dear country through harnessing of the potentials of these patriotic youth and will continue to count on the support of all and sundry in that regard.”

     

  • Fed Govt shifts MDAs’ handover notes till May 25, says APC

    Fed Govt shifts MDAs’ handover notes till May 25, says APC

    THE All Progressives Congress (APC) yesterday released more facts on its position that the President Goodluck Jonathan’s transition committee was not cooperating with the committee raised by the President-elect, Muhammadu Buhari.

    In a statement in Abuja yesterday, its National Publicity Secretary, Alhaji Lai Mohammed, said Buhari’s committee had hoped to get the handover notes of Ministries, Departments and Agencies (MDA) yesterday, as earlier indicated informally to it by the Federal Government’s committee.

    But the statement claimed that the incoming administration’s men were told “point blank that the notes won’t be ready until May 24th”. “Because this date falls on a Sunday, that means we won’t be getting the handover notes until May 25th, just four days before the May 29th handover date,” the APC claimed.

    The party described the Peoples Democratic Party’s (PDP’s) spokesman, Olisa Metuh, as a man with an incurable disdain for the truth for issuing the statement in which he tried to cast aspersion on the APC.

    Metuh had accused the APC of ‘’fabricating lies’’ over the issue of the Jonathan administration’s non-cooperation with the Buhari’s committee.

    The APC statement reads in part: “We say, with all sense of responsibility, that as of today, May 14th 2015, just about two weeks to the May 29th handover date, no shred of information as to the status of governance from any MDA of government has been given to our transition committee.

    “If that qualifies, in Metuh’s lexicon, as cooperation, then there is a problem somewhere. We dare Metuh or anyone for that matter to controvert the fact that not a line of handover note has been handed over to our transition committee. Until then, Metuh has egg on his face.”

    The party restated its earlier advice to Metuh to urgently undertake a crash course in how to be an opposition party spokesman so that he would not be talking or writing himself into avoidable trouble in the days ahead.

    It urged the PDP spokesman to always cross-check the information available to him to separate rumours from facts, saying had he done that, he would not have issued the statement.

    ‘’Metuh decided to put his foot in his mouth when he latched on to the statement made by our transition committee’s chairman, forgetting that in making his statement, the chairman was only acting the statesman that he is by not saying anything that will put the Federal Government in bad light.

    “A discerning party spokesman, rather than a rabble-rousing one, would have understood the elder statesman’s stand for what it is instead of using it as a peg to issue a needless, hollow statement that puts his party and government in bad light. We had decided to allow sleeping dogs to lie, but now that Metuh has stirred the hornet’s nest, it is time to put out the facts for Nigerians to judge.

    ‘’What happened was that, following the request by our transition committee to meet with them, they invited us to what was the first formal meeting between both transition committees. But the meeting was a mere photo-op, as it yielded nothing concrete as far as handover notes are concerned.

    ‘’In fact, what we met at the so-called meeting was far worse than what we had thought. Whereas we had hoped to get their handover notes on May 14th (the date they had indicated to us informally), they told us point blank that the notes won’t be ready until May 24th. Because this date falls on a Sunday, that means we won’t be getting the handover notes until May 25th, just four days before the May 29th handover date

    “How do they honestly expect us to peruse thousands of pages of handover notes, ask pertinent questions and seek necessary clarifications within four days? Because we want a smooth transition, we asked if we could meet with some of the ministers pending the release of the handover notes, but they said no. When one of their members even suggested that the whole process be fast-tracked, they did not budge.

    “Despite this set back, we decided not to put the whole issue in the public domain, until the babbling Metuh decided to look for trouble, describing the deliberate stonewalling by the Jonathan administration as cooperation,’’ it said.

    The APC assured Nigerians that whether or not the Jonathan administration cooperates with it during the transition, the party will live up to expectation by providing purposeful governance.

  • Better late

    Better late

    •FG’s embrace of the electronic revenue system for all remittances is still welcome

    The directive by the Federal Government that all ministries, departments and agencies (MDAs) should effect an automated channel for remitting all revenues from commercial banks to the Consolidated Revenue Account of the government is welcome. It is in line with Nigerians’ quest for a transparent system of capturing all payments and expenses.

    There have been suggestions in recent years that commercial banks have been playing games with deposits with them. The huge profits declared by the banks and the unrealistic emoluments paid out to their executives have been hinged mostly on such deals. It has affected the structure of the economy, as core banking duties, including lending to the real sector, have been neglected.

    Despite guidelines on loans to the agriculture sector, for example, many banks prefer to pay the penalty than adhere to the rules. Enforcement of the e-collection mode is likely to instill discipline in commercial banking in the country. It has also been demonstrated that efficiency and effectiveness are enhanced when electronic platforms are engaged for such transactions. This has been the experience with the Lagos State government which has adopted the method for more than 10 years. It is one of the secrets behind the enhanced internally generated revenue of the state government.

    We find it difficult to understand why it took the Federal Government so long to realise that over-dependence on oil revenue could only spell disaster for the country. Had taxes, rates and fees been efficiently collected before the recent slump in oil prices, the effect on the economy would probably not have been so devastating. We also call on the Accountant-General of the Federation, the Federal Ministry of Finance and the Central Bank of NIgeria to be more vigilant in monitoring the use to which the e-platforms are put by the commercial banks.

    We are constrained once again to point out that there are many countries that depend absolutely on taxes and non-oil receipts. One primary duty of governments in meeting the welfare needs of their citizens is ensuring that the tax net is wide and resilient enough to capture as much revenue as needed to bridge the gap between the rich and the poor.

    At this point that all the indices indicate that tougher times could be ahead for the country, we call on the Federal Government to think out of the box to lead the nation out of the wood. Youth unemployment is at all-time high; the exchange rate keeps threatening to move up inflation rate; public service workers are no longer guaranteed regular payment of salaries and there are threats that institutions of state may collapse if the needful is not done to seal up leakages that have kept funnelling public funds into private accounts of the over-protected super rich.

    The Federal Government should revisit the recommendations of panels set up to streamline revenue generation and collection. The loud silence on the reports suggests to the outside world that Nigeria is unwilling to effect changes in the process of governance. This has adversely affected its image.

    This is the age of technology and digitalisation, Nigeria must not be portrayed as an analogue country that has no use for the electronic device. Just as the Independent National Electoral Commission (INEC) has insisted on enforcing electronic accreditation of voters this year, we support the move to get all government money deposited with the Central Bank.  Although it has come so late in the day, it is a step in the right direction.

  • CBN urges MDAs to deploy e-channels in remittances

    THE Central Bank of Nigeria (CBN) has asked Ministries,Departments and Agencies (MDAs) to adopt e-payment channels for their transactions.

    Salaries, pensions and supplies and taxes are to be paid through the electronic channels. The policy applies to organisations with over 50 employees.

    In a circular, the apex bank said the process would reduce time and transaction costs, minimise leakages in government revenue receipts, provide reliable audit systems, and make it comply with global payment standards. The policy is also expected to ensure confidentiality of transactions.

    CBN said, henceforth, payment instructions and associated schedules are no longer to be transmitted to banks by organisations in the public and private sectors through unsecured channels, such as paper-based mandates, flash drives, compact discs and email attachments.

    The transactions, the financial services regulator said, must be routed through bank-approved electronic platforms, which transmits the instruction to debit a payer’s account and credit that of a beneficiary, mobile account, electronic wallet or other electronic channels.

    It will include the ability of a payer to monitor and obtain electronic feedback on the status of any payment, without depending on any third party, manual or semi-manual means.

    Draft guidelines that will ratify the policy have been sent to commercial banks and payment service providers. The exercise is in line with the CBN Act, 2007, Section 47, Sub Section 2(2d).

    It said the policy aligns with the National Payment Systems Vision 2020 (NPSV) aimed at ensuring the availability of safe and effective mechanisms for making and receiving various payments from any location and at any time.

    The CBN said all public and private sector organisations, which relates with employees, pensioners, suppliers, taxpayers and others, are considered as stakeholders required working for the success of the policy.

  • Taxation of contract and direct labour procurement of Ministries,Departments and Agencies (Mdas) of government in Nigeria. (1)

    The Nigerian Tax Laws have provisions for the Taxation of contract Expenditure including those of Government, Ministry, Department and Agencies. The withholding tax (WHT) provision was introduced into the tax system in 1997 with limited coverage to rent, dividends and directors fees. Tax deduction at source has since been expanded to include:

    – All aspects of building, construction and related services.

    – All types of contract and agency arrangement, other than outright sale and purchase of goods and property in the ordinary course of business.

    – Consultancy, technical and professional services.

    – Management services.

    – Commissions

    – Interest and Royalty.

    The introduction of WHT regime came about in order to address the problem of tax evasion although, there is the overriding objective of full disclosure, transparency, predictability and fairness.

    Despite the huge Tax Revenue from award of contract and related source deductions, there is a growing interest in the usage of direct labour system in project procurement in Nigeria especially in the public sector. Direct Labour system is one of the several options of procurement used for project delivery process. This type of system is regarded as in-house because procuring entity, as different from contractor’s staff carry out the project delivery process and activities. One of the reasons for the preference for direct labour procurement is the Tax effect. Government Ministries, Department and Agency consume the services of contractors and hence are to be charged VAT by contractors who execute contract for them.

    This paper is intended to highlight how Government Expenditures are taxed in Nigeria and the extent to which direct labour procurement can be a Tax evasion scheme. This paper will not in any way address Tax issues relating to Corporate and Individual Expenditures.

     

    The Public Procurement Act 2007 And Award Of Contract

    By the provisions of the Public Procurement Act 2007, the following should be noted about award of contract and Public Procurement:-

    i. Procuring Entities should outsource those services that are either not part of their core business activity or for which there is a fluctuating requirement in terms of specialist skills or Equipment, or where the open market provides a more efficient and commercial alternative.

    ii. The approval and maintenance of monetary and prior review thresholds is important for the faithful implementation of the PPA. The thresholds establish relevant approving authorities and methodologies. “Monetary Thresholds” is defined in the interpretative section of the Act to mean the value limit in Naira set by the Bureau outside of which an approving authority may not award a procurement contract.

    iii. Procurement to be executed:-

    a. by open competitive bidding, except as otherwise exempted;

    b. In a manner which is transparent, timely, and equitable for ensuring accountability and conformity with the Public Procurement Act and regulations deriving therefrom;

    c. With the aim of achieving value for money and  fitness for purpose;

    d. In a manner which promotes competition, economy and efficiency; and

    e. In accordance with the laid down procedures and timelines.

    iv. Where the Bureau has set prior review thresholds, no funds shall be disbursed from the Treasury/federation Account/ or any bank account of any procuring entity for any procurement falling above the set thresholds unless the cheque, warrant or other form of request for payment is accompanied by a “Certificate of ‘No Objection’ to Award of Contract” duly issued by the Bureau.

    v. Subject to the monetary and prior review thresholds for procurements, the Parastatal Tenders’ Board of a government agency, Parastatal, or corporation or in the case of a ministry or extra-ministerial entity, the Ministerial Tenders’ Board shall be the Approving Authority for the conduct of public procurement.

    vi. The following procedure shall be observed by ministries, extra ministerial offices, and other arms of government in implementing their procurement plans, viz;

    a. Advertise and solicit for bids in accordance with guidelines prescribed by the Bureau from time to time;

    b. Invite two (2) credible persons as observers in every procurement process, one from a private sector professional organization relevant to the procurement and the other from non-government organization working in transparency, accountability and/or anti-corruption areas;

    c. Receive, evaluate and make a selection of the bids in accordance with prescribed guidelines;

    d. Obtain the approval of the tenders board for the award of contract to successful bidder.

    e. Obtain “certificate of ‘No objection’ to award contract” from the Bureau where contract is outside the threshold.

    vii. All bidders in addition to requirements contained in any solicitation documents shall:

    a. Possess the necessary:

    – Professional and technical qualifications to carry out particular procurement

    – Financial capability;

    – Equipment and other relevant infrastructure;

    – Shall have adequate personnel to perform the obligations of the procurement contracts.

    b. Possess the legal capacity to enter into the procurement contract

    c. Not be in receivership, the subject of any form of insolvency or bankruptcy proceedings or the subject of any form of winding up petition or proceedings

    d. Must have fulfilled all its obligations to pay taxes, pensions and social security contributions.

    viii.         Procurement Approval Threshold  (2012)

    ix. Reduction or Contract splitting is an offence in the Public Procurement Act.
    x. The Accounting Officer of every procuring entity shall be the person charged with the line supervision of the conduct of all procurement process; in the case of Ministries, the Permanent Secretary and in the case of Extra Ministerial Departments and Corporations, the Director General or Officer of Coordinate responsibility.
    xi. Procurement by Accounting Officers must be on the

    basis of approved quotation or Tender. Selection must be made from at least three quotations.

    xii. Section 19 of the Public Procurement Act 2007 specifies conditions for “Force Account” i.e Direct Labour, which should be executed within three months, to include

    – The procuring entity has ascertained that a schedule of rates, cost – plus or target contract would not be feasible, as quantities of work to be carried out cannot be defined in advance;

    – Works are small and scattered or in remote locations with no local contractors and demobilization costs for outside contractors would be too high;

    – Works must be carried out without disrupting existing operations;

    – The risk of unavailable work interruptions is better borne by procuring entity than by a contractor;

    – No contractor is interested in conducting the work at a reasonable price;

    – It has been demonstrated that Force Account (Direct Labour) is the only practical method for constructing and maintaining works under special circumstances; or

    – Where national security would be compromised if any other method was used.

     

    BLIBLIOGRAGHY

    1. Financial Regulations (Revised to January 2009); Federal Republic of Nigeria.

    2. Public Procurement Act 2007: Federal Republic of Nigeria.

    3. Companies Income Tax Act, Cap C. 21, LFN 2004

    4. Value Added Tax Act, Cap V.1 LFN 2004.

    5. Federal Inland Revenue Service Information circular No: 9801 (1998)

    6. Federal Inland Revenue Service Information circular No: 9502 (1995)

    7. Federal Inland Revenue Service Information circular No: 2006/02 (2006)