Immigration, NPA, CAC, SEC, NIMASA, others too
Federal Government has ordered comprehensive probe of all revenue generating agencies in the country as part of measures to ensure that all funds collected are remitted into government coffers.
The affected agencies numbering over seventy include: the Nigerian National Petroleum Corporation, NNPC, the Central Bank of Nigeria, CBN, the Nigerian Maritime Administration and Safety Agency, NIMASA, the Nigerian Ports Authority, NPA, Corporate Affairs Commission, CAC, and the Federal Inland Revenue Service, FIRS. Others are the Securities and Exchange Commission, SEC, Nigerian Immigration Service, NIS, Nigerian Customs Service, NCS, Nigeria Communications Commission, NCC, Nigerian Investment Promotion Commission, NIPC, Nigerian Export Promotion Commission, NEPC, Nigerian Export Processing Zones Authority, NEPZA and the Nigerian Railway Corporation among other agencies.
Briefing State House Correspondents after yesterday’s Federal Executive Council meeting at the State House Abuja, Minister of Finance, Kemi Adeosun also disclosed that those agencies have been mandated to present their budget for approvals.
The minister denied the report that the 2016 budget presented to the National Assembly by the President had been discreetly withdrawn for adjustment.
“The principal discussion in our meeting today was the initiative by this administration to plug revenue leakages in our MDAs that generate revenue. The presentation to FEC was to remind ministers who supervise these revenue-generating boards of their responsibilities under the Fiscal Responsibility Act.
“Let me remind you that under FRA, these boards and corporations who generate our revenue are supposed to generate and operate on surplus, 80 percent 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, capital is paid by the federal government.
“Then in addition to that, 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 all those agencies into line; to insist that they must submit a budget, that budget must be subjected 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 MDAs, NCC, so many agencies, so many boards of government and they are many, in fact they are in their hundreds.”
On the order for those agencies, including NNPC, NIMASA and several others, to submit their budgets for approval, she said “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 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, that the costs are not inflated.
“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 Act. The Accountant-General, who is under the Ministry of Finance has the powers to go in and make inquiries 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.
“The expected outcome of this is that the internally generated revenue (IGR) which new budget is banking on will actually become a reality.”
On some agencies collecting revenues in foreign currencies and remitting same into government coffers in Naira, Adeosun said “We have done a comprehensive audit of all the agencies that actually collect money in foreign currency and remit in Naira, the requirement is that such monies should go to CBN, which should exchange the money into Naira.
“What we discovered in some agencies, we have stopped it; but we are now doing an audit to identify other agencies. But one thing we have identified is that the agency concerned was NIMASA; but we discovered that there are other agencies we have not identified, who also collect funds in foreign currencies, including our foreign missions. So, we are doing a full audit of all those accounts and to ensure that all those revenues now are converted in accordance with the extant procedures and guidelines.”
The Fiscal Responsibility Act made provisions for the return of 80% of the operating surplus to the treasury and the remaining 20% to a General Reserve Fund. This is explicitly stated in the Part 1V of the Act which addresses the Budgetary Planning of Government Corporations and Related Agencies. It says in Section 22 ,23 and 24 that: “1) Notwithstanding the provisions of any written law governing the corporation, each corporation shall establish a general reserve fund and shall allocate thereto at the end of each financial year, one-fifth of its operating surplus for the year. (2) The balance of the operating surplus shall be paid into the Consolidate Revenue Fund of the Federal Government not later than one month following the statutory deadline for publishing each corporation’s accounts. 23. 1) The corporation’s surplus be classified as a Federal Treasury Revenue 2) Where a corporation’s result is a deficit, the deficit shall be classified as the corporation’s loss for the fiscal year . 3) Each corporation shall, not later than three months after the end of its financial year, cause to be prepared and published its audited financial reports in accordance with such rules as may be prescribed from time to time. 24. Cessation of Application. The provisions of sections 20, 21 and 22 shall cease to apply to any of the corporations from the date of privatization.
The Fiscal Responsibility Act 2007 has provided these accountability channels and has gone further with a provision giving every Nigerian a standing to seek the enforcement of the provisions of the Act in court as provided in Section 51.
The Finance Minister that heads of agencies found culpable in the act after the ongoing audit would be dealt with appropriately.
The current effort to probe the revenue generating agencies will be the second attempt in the life of the present administration. Late last year, Edo state Governor Oshiomohole-led National Executive Council Adhoc Committee on Excess Crude Accounts and Remittances to the Federation Account announced that it had engaged the services of PricewaterhouseCooper and KPMG to conduct a forensic audit of the Nigerian National Petroleum Corporation, Nigeria Customs Service, Federal Inland Revenue Service among other federal government revenue-generating agencies. Till date the result of that investigation is yet to be made public.
Between 2009 and 2012, Sixty revenue generating agencies of the Federal Government generated and failed to remit over N9.4trillion to the coffers of the government.
Some of the listed agencies include the Bank of Industry, Central Bank of Nigeria, Nigerian Port Authority and Power Holding Company of Nigeria.
A report of an investigation conducted by the House of Representatives showed that the agencies either spent the money on their operations or simply failed to remit it to the Consolidated Revenue Fund of the Federal Government.
The figure is separate from the N6.132tn, which it said the Nigerian National Petroleum Corporation and its subsidiaries generated internally from 2009 to 2011 and did not remit to government.
The House clarified that the figure for the NNPC did not include crude oil sales expected to have been paid into the Federation Account.
Meanwhile, Finance Minister has denied the alleged withdrawal of the budget proposal saying the budget is presenting undergoing scrutiny by the federal lawmakers. Her words: “You know the budget is presented to the NASS 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 the budget processes, anywhere in the world, there can be amendments to the budgets arising from that interactive process, which is normal.
“But let me make it very clear. The budget is not being withdrawn or replaced. The budget has been presented and will go through normal process whereby MDAs defend their budgets. It is possible in the process of that, because as you know the legislature is not a rubber stamp, their job is to scrutinize the budget and to approve that budget. So there may be some changes that occur as a result of that interactive process, but that process is normal everywhere in the world where a budget is presented. So I think it is important to make that clarification,” she said.
The minister also dismissed the insinuation that the budget could be padded by the lawmakers insisting that such was impossible considering the parlous financial position of the country.