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Thursday 1 November 2018

How National Assembly Mismanaged Billions Of Naira Through Illegal Expenditures, Fraud

How National Assembly Mismanaged Billions Of Naira Through Illegal Expenditures, Fraud

National Assembly

A new report has shown how the National Assembly mismanaged billions of naira through illegal expenditures and fraud.

About N3.5 billion was misappropriated in 2016 by the management of the National Assembly, an audit report has revealed.

The monies were siphoned through various schemes such as failure to retire advances, financial documentation irregularities, excess payment for goods, controversial purchases and diversion of funds.

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These findings were contained in the 2016 annual audit report released by the Auditor General of the Federation.

The report, released this year, noted how the agency failed to provide receipts, vouchers or contract documents for many transactions made in 2016.

As Senate President, Mr Saraki heads the overall institution of the National Assembly.

Some other key officials in the National Assembly with direct or oversight management responsibilities include the Speaker of the House of Representatives, Yakubu Dogara; Clerk of the National Assembly, Mohammed Omolori; Chairman of the National Assembly Service Commission, Adamu Fika; and Director General of the National Institute of Legislative Studies, Ladi Hamalai. Some of them were directly indicted n the report.

INDICTMENT

During the audit of the accounting records maintained at the National Assembly and its agencies, at the management section, under the General Services, it was revealed that capital account payment vouchers for amounts totalling N417 million (N417,312,538.79), raised for settlement of some contractors, were without vital supporting documents, ”a financial decision that depicts violation of Financial Regulation which provides that all vouchers shall contain full particulars of each service as to enable them to be checked without reference to any other document and will invariably be supported by relevant documents.”

“The Clerk to the National Assembly, Mohammed Sani Omolori, should produce the supporting documents to the payment vouchers or recover the amount in question from the contractors,” the auditor ruled.

Also, during the audit of staff salary accounts, 37 payment vouchers with amounts to N67 million (N66,713,355) were observed to have been paid between January and June, 2016 for items not related to personnel cost.

The payees in the cashbook also did not correspond with those in the bank statement. This irregularity is a violation of Financial Regulation which states that “Expenditure shall strictly be classified in accordance with the estimates and votes must be applied only to the purpose for which the money is provided. Expenditure incorrectly charged to a vote shall be disallowed.”

“The sum of N66,713,355.08 being irregular expenditure should be recovered from the officer who approved the payments from the personnel vote,” the auditor instructed.

Review Of Expenditure

During the review of documents of capital expenditure vote by the auditor, it was discovered that payments totalling N116 million (N116,162,522.60) were made between April and June, 2016 to some contractors for various jobs carried out, without raising payment vouchers.

This contravenes the provisions of Financial Regulation which state that under no circumstance shall money be paid for services, for which a voucher has not been raised.

”The Clerk to the National Assembly should produce the payment vouchers for examination,” the report added.

Also, a total sum of N57 million deducted from various contract payments in respect of Withholding Tax and Value Added Tax was without evidence of remittance to the tax authorities.

The clerk was asked to produce the acknowledgement receipts from the Federal Inland Revenue Service for verification. He was stated, in the report ”to have ignored the auditor on these issues.”

‘Watery Documentation’

The general services account of the National Assembly was depleted by about N751 million on account of “watery financial documentations” and failure of staff to retire advances according to the report.

In the documents, it was revealed that N625 million was granted to the Constitution Review Committee through four payment vouchers between March and June 2016. These were not supported with relevant documents and details of the expenses.

“This is a violation of Financial Regulation which stipulates that all payment vouchers should contain full particulars of each service, so as to enable them to be checked without reference to any other documents and will invariably be supported by relevant documents,” the auditor said.

The report also revealed that cash advances totalling N126 million was granted to 11 members of staff through 19 payment vouchers between March and December 2016 for procurement of goods and services. However, these advances were not retired as at the time of examination in June 2017.

The clerk was instructed to recover N126 million from the ”defaulting officers in compliance with Financial Regulation which stipulates that accounting officers are responsible for ensuring the prompt repayment of all advances by instalments or otherwise.”

Indicted Senate

At the upper chamber of the National Assembly under Mr Saraki, scrutiny of financial documents of the Senate revealed that about N974 million was not accounted for as against financial regulations. This was mostly due to poor control in the management and accountability of public funds, ”where members of staff of the Senate fail to retire advances worth millions of naira”, the report explained.

The auditor noted that: “Personal advances totalling N747,286,680.00, granted to staff between February and December 2016 for various procurements and services, were not retired as at the time of examination in June 2017.”

The clerk was instructed to recover the whole sum from the defaulting officers and furnish recovery particulars for verification. He has not.

It was also revealed that the Senate purportedly made payments of over N100 million ”for taxes with no supporting documents.”

“Withholding and Value Added Taxes totalling N118,625,057.48, which were purportedly remitted to the Federal Inland Revenue Service, were not acknowledged with revenue receipts. The Clerk to the National Assembly should produce the receipts from the Tax Authorities for verification.”

Other payment vouchers for amounts totalling N109 million paid from the Capital Expenditure vote, were not presented for audit examination by the Senate.

The auditor has subsequently directed the Clerk to produce the payment vouchers for examination, ”or refund the amount in question to government coffers.”

House of Representatives, Legislative Institute Indicted

A review of documents of the House of Representatives under the leadership of Mr Dogara, also revealed that about N1 billion was misappropriated.

Pay As You Earn (PAYE) deductions from staff salaries totalling N821.6 million was claimed to have been remitted to tax authorities with no receipts or documented evidence to show for it during audit verification, a development the auditor noted runs in contravention to Financial Regulation. The regulation states that “deductions for WHT, VAT and PAYE shall be remitted to the Federal Inland Revenue Service at the same time the payee who is the subject of the deduction is paid”.

Also, according to provisions of Financial Regulations that require accounting officers to provide adequate advances’ records and to ensure that officers granted advances retire them promptly, advances granted to officers of the House of Representatives totalling N254 million for procurement of goods and services between January and December, 2016 remained unretired as at the time of examination in June 2017.

Financial recklessness and misappropriation of funds are not the exclusive preserve of the law making sections. According to the audit report, this extended to the National Institute for Legislative Studies, where N412 million was paid for 11 motor vehicles purchased at a contract sum of N375.9 million.

How National Assembly Mismanaged Billions Of Naira Through Illegal Expenditures, Fraud


INFOGRAPH: Showing how national assembly mismanaged billions of Naira through illegal expenditures, fraud.

Examination of the capital account cashbook revealed that after formal payment was made for the vehicles, an additional sum of about N37 million was paid to the same contractor in September 2016 under the same contract, ”without approval”.

The auditor has directed the management of the institute to justify the over-payment, which is in excess of the contract sum or recover the funds.

Extensive Rot

Also, at the institute, it was discovered that seven members of staff who were redeployed from the National Assembly to provide ‘specialised’ services were paid N11 million from the overhead costs vote. The payment, however, could not be ”measured, since the personnel details such as salary grade levels, steps, status and rank of the officers were not disclosed in the payroll sheets”.

”The management of the institute should justify these payments or recover the amounts from the seven officers and furnish recovery particulars for verification,” the report noted.

The institute is an organ of the National Assembly established by an Act of Parliament.

President Goodluck Jonathan signed into law the agency on March 2, 2011 following the passage of the same by the Senate and the House of Representatives. The institute is headed by Ladi Hamalai, who has been Director General since its establishment.

Rot In National Assembly Service Commission

At the National Assembly Service Commission headed by Adamu Fika who has been its Executive Secretary since 2013, it was revealed that about N26 million was financially mismanaged.

For instance, the report noted that during its 445th meeting held on September 8, 2016, the commission approved N110 million for the training of officers on Salary Grade Level 14 and above in Dubai, United Arab Emirates.

Investigation by the auditor revealed that for the training, N128 million was actually paid through 10 payment vouchers to the participants as ‘estacode allowances’ and also to the two consultants engaged for the training. Cash advances totalling N10 million were then granted to 34 officers as course fees including N5 million paid to a consultant as course fees.

It was also discovered that the number of officers slated for training was not certain. The numbers varied from 33 officers to whom cash advances were granted, ”to 57 and 75 who were paid estacode allowances and air-tickets while letters of the award of contracts to the consultants were not produced for audit”.

The report asked the chairman of the commission to justify the payment of the additional N17.6 million; explain the payment of N10 million as advances to the officers, while also clarifying the exact number of officers trained.

“No response was received from the National Assembly Service Commission. Therefore, appropriate sanctions should be meted out and the commission compelled to enforce my recommendation on this matter,” the auditor said.

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Cheating Government

At the Legislative Aides Section, N12 million earned as interests on bank accounts in a commercial bank between January and December 2016, was not paid into the Consolidated Revenue Fund.

The sum of N9 million was earned from the Personnel Costs account, while the overhead account earned an interest of N3 million.

The non-remittance of these amounts, according to the auditor, contravened Financial Regulation which stipulates that “Interest earned on bank accounts must be properly classified to the appropriate revenue head of Accounts and paid to the Consolidated Revenue Fund”.

“The Clerk to the National Assembly should remit the sum of N12,274,587.77 to the Consolidated Revenue Fund and forward relevant particulars for verification,” the auditor stated.

Also, documentation irregularities were observed in the recruitment of legislative aides and this resulted in the payment of salaries and allowances ”not worked for”, totalling N9 million.

The actual dates of appointments of some aides were found to differ from the dates of assumption of duty by several months ”which is quite abnormal” the report explained.

The Clerk has been requested by the auditor ”to restore normalcy in the process of documentation in respect of dates of appointment and assumption of duties of the aides, recover the sum of N9 million overpaid to the aides in question, and forward recovery particulars for verification”.

Official Reacts

Repeated efforts to get reactions from the Clerk of the National Assembly, Mr Omolori and spokesperson of the Senate, Sabi Abdulahi, were not successful as calls placed to their known telephone lines did not connect.

However, the spokesperson of the House of Representatives, Abdulrazak Namdas said he was not aware of the said report.

“I cannot give you an answer right now because I am not aware of what you just told me. I need to speak to the appropriate committee before I get back. I think it is not something I can give you a straight away answer. I just heard it (report) from you, so I have to get across to the relevant authorities to get the information and then get back to you.

”Do you know the chairman committee on public accounts? Well, this is the committee that can give us a straight away answer and during this electioneering campaign, I am not too close (to them). Let me get back to my colleagues and then get back to you.”

He didn’t pick subsequent calls from placed by PREMIUM TIMES.

A Recurring Decimal- Activist

Meanwhile, the country officer and head of the Nigeria office of the Open Society Initiative for West Africa (OSIWA), Jude Ilo, while reacting to the report expressed disgust.

”This has been happening and one would naturally expect a different kind of response under a government that came in on the credentials of integrity and anti-corruption. Issues identified in the audit reports are ‘small wings’, it doesn’t take a lot of work, for instance, to hold responsible the officers who are culpable for these kinds of actions; government doesn’t have to do a lot of work to get things to happen properly.

”They (government) are not doing it, which then calls into the question the whole posturing that they are interested in accountability and anti-corruption, if you can’t even discipline staff right under your control.

”The National Assembly over the years has not been able to assure Nigerians that they are in any way interested in probity, accountability and all of that. It is a recurring event every year that the National Assembly budgeting process is opaque. We don’t know how resources given out to them are reported on (spent), and for a body that is in charge of making laws for the country, this is lawless because that is what you get from these kinds of events.

”It is a combination of executive and legislative inadequacies undermining critically feeble conversation about anti-corruption. Perhaps you bring this attitude back a bit and ask ourselves a fundamental question, are we really interested in doing things right?

Are we really interested in allowing the report of the auditor general to correct processes that sour the country? If we continue this way, there is no amount of prosecution or posturing that will allow the country to recoup (funds) or plug the leaks.”

****
Source: PREMIUM TIMES

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