Thursday, 7 January 2016

FG to Audit All Revenue Generating Agencies

The federal government has ordered the audit of all revenue generating agencies in the country in order to ensure that all funds collected are remitted into its coffers.

Finance Minister, Mrs. Kemi Adeosun, who briefed State House correspondents after the first Federal Executive Council (FEC) meeting this year, also said that the relevant agencies had been mandated to present their budgets for approval.

The minister also denied reports that the 2016 budget presented to the National Assembly by the president had been discreetly withdrawn for adjustment following public outcries over some subheads considered bogus.

According to ThisDay News, Adeosun, who addressed the press alongside her Ministry of Information and Culture counterpart, Alhaji Lai Mohammed, said the audit was aimed at plugging all loopholes in order to free funds for the implementation of the budget when passed.

She said: “The principal discussion in our meeting today was the initiative by this administration to plug revenue leakages in our ministries, departments and agencies (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 (FRA).

“Let me remind you that under FRA, these boards and corporations which generate poor revenue are supposed to generate and operate a surplus, 80 per cent of which is to be credited to the Consolidated Revenue Fund (CRF), 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.

“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, and that budget must be subject 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 appropriately.

“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 ever really looked at the MDAs – so many agencies and so many boards of government – in fact they are in their hundreds.”

Also speaking on the directive given to the agencies, including the Nigerian National Petroleum Corporation (NNPC), Nigerian Maritime Administration and Safety Agency (NIMASA) and several others to submit their budgets for approval, she said: “We issued a circular in December requesting that they send us their budgets and what we discussed today was the responsibility of the ministers to ensure that whether those agencies have boards or not, those budgets must be prepared so that the Ministry of Finance can 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 and that the costs are not inflated.”

She said FEC also noted that some agencies had a track record of making sure that every naira they earned was spent and the government has directed that they stop 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 that their cost is simply excessive and not in keeping with our expectations,” she added.

According to her, the expected outcome of the audit is that internally generated revenue (IGR), which will form the fulcrum of the 2016 budget and beyond, would actually become a reality.

On the alleged withdrawal of the 2016 budget, she said: “You know the budget is presented to the National Assembly and then there is what we call an interactive budget approval process and you know the agencies will still go and defend their budgets at the legislature.
“So ordinarily, in 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 the normal process whereby the MDAs defend their budgets.

“It is possible that in the process, because as you know the legislature is not there as a rubber stamp, their job is to scrutinize the budget and to approve that budget, 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.”

The minister also dismissed the perception that the budget might be padded by the lawmakers, insisting that this was impossible considering the parlous financial position of the country.

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 currencies and remit in naira.

“The requirement is that such monies should go to the Central Bank of Nigeria (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. One we identified was NIMASA, but we discovered that there were other agencies we had not identified which also collect funds in foreign currencies, including our foreign missions.

“So we are doing a full audit of all those accounts to ensure that all those revenues are now converted in accordance with the extant procedures and guidelines.”

She warned that heads of agencies found culpable in the act after the ongoing audit would be dealt with appropriately.

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