The Auditor-General’s latest report has unveiled alarming financial misconduct and irregular payments amounting to a staggering ₦197.72 billion within various government Ministries, Departments, and Agencies (MDAs). This report, covering activities from 2020 to 2021, highlights widespread violations of financial regulations, irregular contract awards, and mismanagement that point to systemic flaws in the government’s financial and procurement processes.
The audit, detailed in the Auditor-General’s Annual Report on Non-Compliance and Internal Control Weaknesses, paints a troubling picture of how funds were mismanaged across several federal MDAs. The report emphasizes that deliberate disregard for financial regulations and lax oversight mechanisms have enabled significant losses.
Key highlights of the irregularities include:
- Unauthorized Contract Awards: A total of ₦7.39 billion was linked to contract irregularities across 32 MDAs, with violations stemming from the failure to follow competitive bidding processes as mandated by Paragraph 2921(i) of the Financial Regulations (2009).
- Payments for Unexecuted Contracts: Another ₦167.59 billion was paid for contracts that were either partially executed or not executed at all, contravening Paragraph 708 of the Financial Regulations, which prohibits payments for undelivered goods or services.
- Due Process Violations: Contracts amounting to ₦20.33 billion were awarded without adhering to prescribed procurement processes, violating Section 16(21) of the Public Procurement Act (PPA) 2007.
- Exceeding Financial Thresholds: A sum of ₦2.41 billion was paid for contracts awarded above approved financial thresholds without obtaining the necessary “Certificate of No Objection” from the Bureau of Public Procurement.
Breakdown of the Irregularities
Contract Irregularities: ₦7.39 Billion
Irregularities in the award of contracts were found in 32 MDAs. Among the offenders:
- Rural Electrification Agency (REA) in Abuja recorded the largest irregularity, with contract violations amounting to ₦2.12 billion.
- The Nigerian Security Printing and Minting Company Plc (NSPM) had the smallest irregularity in this category, amounting to ₦11.72 million.
The audit noted that these irregularities occurred due to a lack of competitive bidding, which is crucial for ensuring transparency and value for money in procurement.
Payments for Unexecuted Contracts: ₦167.59 Billion
The report revealed shocking figures showing that payments were made for contracts that were either incomplete or not executed at all. Some of the worst offenders include:
- Nigerian Bulk Electricity Trading Plc in Abuja, responsible for a massive ₦100 billion in irregular payments.
- The National Centre for Women Development, with irregular payments of ₦2.17 million, recorded the lowest amount in this category.
These transactions reflect severe lapses in oversight and a blatant disregard for financial rules that explicitly prohibit payment for undelivered goods or services.
Violation of Due Process: ₦20.33 Billion
Twenty-four MDAs were found guilty of ignoring established due process in awarding contracts, as required by the Public Procurement Act (PPA) 2007. Key offenders include:
- Nigerian Security Printing and Minting Company Plc (NSPM), which accounted for ₦14.14 billion in due process violations.
- The Corporate Affairs Commission, with the least irregularity in this category, amounting to ₦8.98 million.
These violations highlight the failure of government agencies to adhere to mandatory procurement plans and obtain necessary approvals.
Exceeding Financial Thresholds: ₦2.41 Billion
In five MDAs, contracts exceeding approved financial thresholds were awarded without the proper certification from the Bureau of Public Procurement. Among these:
- Ahmadu Bello University Teaching Hospital (ABUTH) in Zaria was the worst offender, with violations totaling ₦1.06 billion.
- The Federal Medical Centre (FMC) in Bida had the lowest irregular payment in this category, at ₦9.9 million.
This lack of compliance with financial thresholds raises concerns about unchecked spending and the misuse of public funds.
The Auditor-General’s findings shed light on systemic problems in government financial management. Key issues identified include:
- Lack of Accountability: Heads of agencies appear to operate without fear of repercussions, enabling repeated violations of financial regulations.
- Weak Oversight Mechanisms: The absence of robust internal controls allows irregularities to persist unchecked.
- Procurement Irregularities: The failure to adhere to procurement laws undermines transparency and fair competition, increasing the likelihood of corruption.
- Impact on Public Services: Mismanagement of funds on such a scale diverts resources away from essential public services, harming development and citizen welfare.
To address the issues identified, the Auditor-General’s report calls for urgent action, including:
- Stronger Oversight: Establishing stricter monitoring mechanisms to ensure compliance with financial regulations and procurement laws.
- Accountability Measures: Holding heads of agencies responsible for financial misconduct, with clear penalties for violations.
- Capacity Building: Providing training for procurement officers and financial managers to reduce errors and improve compliance.
- Independent Audits: Increasing the frequency of independent audits to detect and deter irregularities.
- Transparency: Publishing procurement records and audit findings to promote transparency and public accountability.
The revelations in the Auditor-General’s report are a wake-up call for urgent reform in Nigeria’s public financial management systems. The scale of the irregularities—₦197.72 billion—underscores the need for immediate corrective measures to prevent further losses and ensure that public funds are used responsibly. By enforcing stricter oversight, enhancing accountability, and fostering transparency, the government can restore public trust and ensure that funds serve the intended purposes of national development and citizen welfare.
