Financial Irregularities Exposed
An audit report has uncovered a staggering N4.64bn in financial irregularities within Nigeria’s Federal Ministry of Works (Housing Sector). The findings, detailed in the Auditor-General for the Federation’s Annual Report, cover the period between 2020 and 2021. These financial discrepancies, which were prevalent under former Minister Babatunde Fashola, raise serious concerns about non-compliance with financial regulations and procurement laws. The report highlights significant lapses in internal controls, leading to improper payments and unapproved expenditures.
Payments Made Without Proper Documentation
The report identifies several issues, including payments made without proper documentation and the allocation of funds beyond approved budgets. For example, N1.08bn was paid from the GIFMIS account without required payment vouchers, breaching established financial regulations. The audit also reveals that N546m was transferred to project accounts without proper documentation or budgetary provision. These actions indicate severe weaknesses in the ministry’s internal controls.
Extra-Budgetary Expenditures and Legislative Violations
One of the most alarming findings was the extra-budgetary expenditures totaling N2.89bn. This includes N1.88bn spent without legislative appropriation, a clear violation of Section 80(4) of Nigeria’s 1999 Constitution. Over N1bn was paid to contractors for Katsina State road projects included in the 2017 Appropriation Act. The Ministry failed to obtain National Assembly approval, showing clear disregard for due process in managing public funds.
Unregistered Contractors and Irregular Contracts
The audit also uncovered contracts worth N493.97m awarded to companies that were not registered with the Corporate Affairs Commission (CAC), as required by law. Some contractors were paid for projects despite lacking legal incorporation, increasing the risk of mismanagement and non-execution of contracts. The report reveals N170.36m paid to unregistered companies and contracts awarded to a company not incorporated for three years. This violation of the Public Procurement Act and Companies and Allied Matters Act exposes serious regulatory breaches.
Overpayments and Non-Compliance with Procurement Rules
Further issues include overpayments to contractors in Oyo and Edo States, where mobilisation fees exceeded the prescribed limits. The audit report revealed N110.81m paid as mobilization fees for a project in Oyo State, exceeding regulations. It also highlighted missing documentation for contracts, including absent bids, tender evaluations, and advertisements. This highlights the continued disregard for procurement rules, further contributing to the mismanagement of public funds.
Call for Reforms and Sanctions
The Auditor-General’s report has called for immediate action to address the financial mismanagement within the Ministry of Works. It recommends that the Permanent Secretary justify the questionable payments and recover the funds to remit them to the Treasury. The report calls for sanctions against officials responsible for violations, stressing the importance of enforcing financial regulations. The Senate has vowed to take action against heads of agencies involved in financial misconduct, including parliamentary sanctions. These actions aim to uphold financial accountability standards and deter future non-compliance within government agencies.
The findings present a grim picture of the Ministry’s financial management and underscore the urgent need for reforms to protect public funds from further mismanagement and potential diversion.
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