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Tag: OAuGF

  • 2020 audit report: OAuGF asks Labour Ministry to account for N3.106 billion

    2020 audit report: OAuGF asks Labour Ministry to account for N3.106 billion

    The Office of the Auditor General for the Federation has stated that the Federal Ministry of Labour and Employment must provide an account for the expenditure of over N3.106 billion incurred in the 2020 financial year, which failed to follow due process and necessary approval.

    It said that failure to do so would require the ministry to refund the funds to the government’s treasury.

    In its report submitted to the National Assembly in December 2023 on noncompliance with extant government regulations in government expenses for 2020, the Auditor General accused the ministry of various infractions and failure to show evidence of expenses carried out within the period under review.

    The Nation however observed that while the Ministry responded to some of the issues contained in the 32 audit queries from the Office of the Auditor General, they chose to remain silent on many others.

    For example, the Auditor General’s report alleged that the Ministry failed to provide documents, files, correspondences, returns, and accounting records relating to the running of the Geneva Desk Office and how a total of N351.252 million was spent in 2019 and 2020.

    The report also said that the Ministry paid its staff the sum of N226.078 million for monitoring and inspection of capital projects and updating of fixed assets register in the 6 geopolitical zones, monitoring and inspection of capital projects in 2020 and monitoring and inspection of zonal/state labour offices, job centres, capital projects, and skills acquisition centres without evidence specific timelines of visits, scope of work and reports on such inspections.

    Also, the report said that out of the sum of N653,669,705.00 granted as cash advances in 2020, the Ministry failed to account for N344. 027 million, alleging multiple advances granted to staff when the previous ones had not been retired leading to loss of government funds

    It alleged that after awarding a contract for upgrading Skills Vocational and Training Centres in Warri, Calabar, Lagos, and Ibadan in December 2020, based on bids and quotations submitted, the Ministry issued another letter two weeks later revising the schedule of requirements to enable.

    It said: “The revised schedules were inflated and in some cases, especially for the capital items, the quantities to be supplied were reduced to accommodate the inflated prices. The revised schedule made the government to lose a total of N15,502,677.07.

    “Evidence of justification for the variation in prices and quantities such as applications by the contractors, appropriate approvals from the initial approving authority who approved the original contracts, reports of market survey to support the prices reviewed, and Need Assessment Report to justify that these items and the quantities were needed were not produced for audit.”

    The OAuGF also alleged that the Ministry paid the sum of N261,502,802.54 to 54 contractors in 2018, N209,267,695.26 to 32 contractors in 2019 and N26,528,204.59 to 4 contractors in 2020 for the renovation of non-existent Job Centres in the geo Political Zones of the country, across the country and in Akwa Ibom, Kaduna, Kano and Sokoto respectively.

    The report said the Ministry failed to provide records such as the Schedule of Assets and fixed Asset Register to support the existence of the Job Centres and supporting documents such as Job completion Certificates, photographs before and after the renovation, reports, etc, to support the expenditure.

    Furthermore, the report said that the Ministry awarded the contract for the procurement of equipment for the specialist skill acquisition centres at Alor, Idemili North L.G.A and lfitedunu, Dunukofia L.G.A, Anambra State in 2018 and paid the contractor N46,353,415.50, adding that “the existence of the items could not be verified despite the presence of records such as Store Receipt Vouchers (SRV) and Job Completion Certificate issued in December 2019 by the Ministry.

    “Evidence of procurement due process and contractors’ eligibility for the contract award such as open competitive bidding, company profile, certificate of registration, tax clearance certificate, PENCOM registration certificate, VAT registration certificate, etc, were not produced for scrutiny.

    “Efforts made by Audit to carry out a physical inspection of the items supplied were unsuccessful as the team was told that the items supplied were packed at the Minister’s private residence and therefore, not accessible.”

    It also said that the Ministry awarded the contract for the procurement of equipment for the specialist skill acquisition centre at the cost, of N41,224,455.00 and paid the contractor N11,610,094.04 (net of taxes)  without evidence that the items were supplied.

    It said further that “evidence of procurement due process and contractor’s eligibility for the contract award such as open competitive bidding, company profile, certificate of registration, tax clearance certificate, PENCOM registration certificate, VAT registration certificate, etc, were not produced for scrutiny.

    “Efforts made by Audit to carry out a physical inspection of the items supplied were unsuccessful as the team was told that the items supplied were packed at the Minister’s private residence and therefore, not accessible.”

    It also accused the Ministry of disregarding the advice of the Bureau of Public Procurement to invite bids from the local vehicle Assembly plant for the procurement of two pickup utility Vehicles and went ahead to spend about N49 million for the vehicles even after the BPP rejected its request.

    It also reported that the Ministry spent a total of N58.217 million on Revenue Monitoring visits despite low revenue generation by the Ministry without evidence of the exercise. Was carried out, while the sum of N32.209 million was granted as cash advances to officers of the Ministry for the procurement of stores and services.

    It said that the sum of N235.920 million was paid through various vouchers for different activities such as National Employment Council Meeting, sensitization and advocacy on the “ills of irregular migration by the Honourable Minister and his aides to South East, monitoring and licensing private employment agencies, training on recruiters’ license, and International Labour Organization standards training for labour officers.

    The money, the report said was also listed for monitoring and licensing private employment agencies, while part of the money was allegedly paid to 14 officers for various purposes relating to Cooperative Societies including cooperative project monitoring, inspection and supervision, promoting and forming new cooperative societies for job creation, monitoring, inspection and supervision of cooperative societies.

    It also said part of the money was also paid to an official of the Ministry with two (2) paid vouchers without evidence such as a proposal showing dates, team list, or programmes’ reports, adding that the said monies were paid without relevant supporting documents.

    Other payments to be accounted for by the Ministry include N47.734 million paid to a consultant for services not rendered, N30. 998 million was also paid as a consultancy contract for the implementation of the international Public Sector Accounting Standards (IPSAS) inclusive of Assets/Liabilities management in Zonal Offices, State/FCT and job centres.

    The report also accused the ministry of making payment for non-existent contracts in Anambra state including the Fencing of a specialist Skill acquisition Centre at Awka, the construction of a borehole at the Skill acquisition Centre, the construction of a Generator house and procurement and installation of Generator set at skill acquisition Centre, Awka, construction of Generator house and procurement and installation of Generator set at skills acquisition centre, correctional centre Prison, Onitsha and construction of solar powered borehole at skill acquisition centre, Bison, Onitsha.

    It said: “Efforts to carry out a physical inspection of the projects were unsuccessful as the Officers at the state office were unable to provide details of the location of the project sites and other relevant information about the execution of these projects”.

    In addition, the report said the Ministry awarded and paid for three contracts for fencing, construction of a borehole, generator house and procurement/installation of a generator set at Specialist Acquisition Center, Neni Aniocha LGA, Anambra State without evidence of contract execution, such as functional borehole at the Centre and the generator set was not provided for audit.

    Read Also: OAuGF: how SEC blew N24.9b on wardrobe, other allowances in three years

    The report identified duplication of contracts for the Construction and Equipping of Skill Acquisition Centres in Akure, Ondo State and Effurun, Uvwie LGA, Delta State which it said was awarded twice.

    It also alleged that four contracts worth N178.169 million were awarded for the construction of the Skill Acquisition Center at Ifitedunu Dunukofia, Anambra State, amounting to duplication of contract and payment for job not executed.

    It also said that the three contracts valued at N150.843 million were awarded for the construction, fencing and landscaping and equipping of the Bungalow Skill Acquisition Centre, at Owowo, Igalamela Odolu LGA, Kogi, adding that the contractor only constructed the Perimeter Fence and Gatehouse.

    It also reported that the Minimum awarded two contracts for the construction and equipping of the Skills Acquisition Center at Dambo, Zaria, Kaduna State worth totalling N144.885 million with the contractor receiving his payment six weeks after the contract award, while four officers of the Money were paid N680, 000 to ascertain the completion of the construction, fencing and landscaping of the Center before handover to the ministry.

    The report said further that “Physical inspection of the Construction, Fencing and Landscaping project by audit showed that the project belonged to the Federal Ministry of Agriculture and Rural Development and was awarded to a different contractor”.

    In Kano state, the report said the Ministry paid N56. 869 million for three contracts for the construction of one bungalow Skill Acquisition Centre at Sheka, Kumbotso LGA, Kano State, renovation of the Federal Ministry of Labour and Employment State Office, Kano and the procurement of some office Equipment for State Labour Offices and Headquarters, North East Zone without the contracts being executed.

    It also identified irregularities in the contract awarded to two contractors for the construction of an Ultra-Modern Skill Acquisition and Vocational Center at Okpokuegbe, Ezza North LGA, Ebonyi State as well as the construction of Skills and Vocational Training Centre in ljebu-Ode, Ogun State.

    It also alleged that the Ministry paid for q contract for the construction of Skills and Vocational Training Centres in Jibia LGA, Katsina state, in Isin Local Government Area, Kwara State, and Ikenne, Ogun state without the approval of the Ministerial Tenders Board.

  • MDAs circumvent constitution, financial regulations, says OAuGF

    MDAs circumvent constitution, financial regulations, says OAuGF

    Going by the latest report by the Office of the Auditor-General of the Federation (OAuGF), many Ministries, Department and Agencies (MDA) violated extant laws and spent billions of naira that were not appropriated in 2020.

    The OAuGF gave the detailed account of the infractions two years after its last report.

    Section 80 (2) of the 1999 Constitution as amended States that “No moneys shall be withdrawn from the Consolidated Revenue Fund of the Federation except to meet expenditure that is charged upon the fund by this Constitution or where the issue of those moneys has been authorised by an Appropriation Act, Supplementary Appropriation Act or an Act passed in pursuance of section 81 of this Constitution”.

    Also, Section 80(3) states that “No moneys shall be withdrawn from any public fund of the Federation, other than the Consolidated Revenue Fund of the Federation, unless the issue of those moneys has been authorised by an Act of the National Assembly”.

    The 2020 Audited Report of government finances dated November 30, 2023, submitted to the National Assembly contained revelations of unbudgeted expenditure and unremitted revenue to government coffers in the 2020 financial year.

    Constitutionally, the 2020 Auditor-General’s report ought to have been submitted to the National Assembly in 2021. It was submitted via a letter referenced AuGF/AR.2020/01 dated November 30, 2023.

    The report contained 26 audit queries issued to the OAuGF detailing different infractions and abuse of the financial regulations and treasury circulars; 27 queries against the Security and Exchange Commission and 31 audit queries against the Ministry of Labour & Employment.

    Last year, The Nation reported that the delay in the appointment of a substantive Auditor-General of the Federation was delaying the submission of an audited report of government finances to the National Assembly as the director over-seeing the office cannot sign any final audit report.

    On October 21, 2023, President Bola Ahmed Tinubu appointed Shaakaa Chira as the substantive Auditor-General

    In its Report, the said that 28 MDAs, including some Federal Pay Offices, Office of the Surveyor-General of the Federation, Airforce Institute of a technology among others had negative balances of cash and cash equivalents amounting to N13,955,069,757,335.20.

    The report said: “The amount was presented in the Consolidated Statement of Financial Position as Current Portion of Borrowings/Cash & Cash Equivalent under Current Liabilities.

    “There was no further information in the notes to the FGN CFS on what gave rise to the negative cash and cash equivalents recognised by the twenty eight MDA.

    “The above anomalies could be attributed to weaknesses in the internal control system surrounding the consolidation process at the OAuGF.”

    The report also indicted about 256 MDAs for engaging in extra budgetary expenditure amounting to N284, 316,170,124.34 in 2020, saying “the total expenditure disclosed for the affected MDA was N361,273,553,365.49, against the approved budget of N76,957,383,241.15, hence the extra budgetary expenditure.

    According to the report, the sources of the extra spending were neither disclosed, nor the evidence of supplementary appropriation or approved virement provided, attributing it to failure of the accounting officers of the affected MDA to ensure that proper budgetary and accounting systems are established and maintained to enhance internal control, accountability and transparency.

    It also attribute it to lack of due diligence from the Accountant-General of the Federation in ensuring that the release of the overhead costs was limited to approved estimates.

    The accountant-general said in his management response to the issue that “GIFMIS is budget based software; it could not allow payments without a budget. The MDAs with waivers to spend 75 per cent of their revenue were allowed to add whatever they spent as a supplementary budget. Several of the affected MDAs have grants or aid, these is to be classified as supplementary budget. Those, with AIE, revenue & grants sources have had their budgets adjusted as supplementary budgets.

    Another 18 MDAs incurred an overhead expenditure of N129,348,691,232.01 which were not supportes by budgetary provision as required by extant regulations, but the accountant-general, in a management response contained in the report said the MDAs involve ate “mostly those that had waivers to spend a percentage of their revenue to sustain themselves”.

    Read Also: Reps to probe over 300 MDAs’ failure to submit audited accounts to OAuGF

    The report said that 34 MDAs reported zero overhead expenditure despite having a total budget of N6,965, 100,151.00, adding that “no additional information was disclosed to enable users understand how the MDA operated without overhead costs”.

    The AuGF report reported an extra budgetary expenditure of N342.916 billion on employee benefits and subsidiaries above the appropriated amounts, adding that while N7.027.nillion was budgeted for Employees Benefit the total expenditure was N335.657 billion was spent.

    It also said that the sum of N14, 284,446,488.75 was spent on subsidies without budgetary provisions.

     The report said that 72 MDAs exceeded their Employee benefits budget by N328,631,067,959.54 saying “the total expenditures of the 72 MDA were N335,657,780,939.50 while the total budget was 8’7,026,712,979.96, hence the reported extra budgetary expenditure.

    The auditor-general reported that 106 MDAs exceeded  their personnel costs budget by N78,761,272,804.54, saying “the total expenditures of the 106 MDA was N882.90 billion, while the total budget was N804.14 billion

    “No information was disclosed thereon in respect to the authorisation of the expenditure by way of either supplementary appropriation or virement upon which the personnel budget was exceeded.”

    About N1.23 trillion was recognised as Intangible Assets for 659 MDAs without the schedule showing the classification and nature of the Intangible assets contrary to the provision of IPSAS 31 and Summary of Significant Accounting Policies, while there was no disclosure to enable the audit confirm which category of the intangible assets has finite or infinite life.

    According to the report, a review of the consolidated statement of financial performance shows that the gain of N244 ,326,407.50 from disposal of assets was disclosed in both Note 24 and Consolidated Statement of Financial Performance as Gain or Loss on Disposal of PPE.

    The AuGF stressed that out of a total of One hundred and ten (110) MDA that were circularised, only twenty did not respond, adding that the balances recognised in the FGN CFS against the unresponsive MDA amounted to N1.721 trillion.

    The Consolidated Statement of Financial Position showed a negative Net Assets of N33.34 trillions as at December 31, 2020, adding that the accountant-general should provide justification for the negative net assets balance reported in the FGN CFS to the Public Accounts Committees (PAC) of the National Assembly.