FG misapplied N1.04 trn special fund in 10 years - Senate report
(Nigeria) The Senate Committee on Public Accounts
alleged on Tuesday that the Federal Government misapplied N1.04 trillion
from the Special Funds Accounts, SFA to unrelated purposes.
The committee’s finding is contained in a report on the status
inquiry into the SFA, which was presented at the floor of the Senate in
Abuja.
Presenting the report, Sen. Ahmed Lawan (ANPP-Yobe), Chairman, Senate Public Accounts Committee, said the infractions were made between 2002 and June 2012.
Lawan said that several approvals of funds from the SFA during the period did not conform with the purposes for which the funds were established.
The SFA was established in 2002 as an interventionist fund for the development of the solid minerals sector, ecology and other critical areas of the economy.
The SFA, managed by the Federal Government, comprises the three per cent Development of Natural Resources Account, 1.46 per cent Derivation and Ecology Account, and 0.72 per cent Stabilisation Account.
Those deductions came from the federation account, said the report.
According to the report, N1.51 trillion accrued to the SFA as at June 30, 2012, from figures obtained from the Office of the Accountant-General of the Federation, OAGF.
Out of the amount, N1.23 trillion was recorded as total payments to beneficiaries from the account, the report said.
However, the report noted that the operation of the natural resources, ecology and stabilisation accounts were grossly abused.
It said several releases under this account were not related to the intendment of the account.
On natural resources account, the report detailed 16 abuses under this account, which amounted to N701.4 billon in 10 years, representing 100 per cent of the total amount released under the period.
Some of the infractions included a N2 billion loan granted for payment to Gitto Costruzioni General Nigeria Limited on Sept. 19, 2005.
Also the Federal Ministry of Foreign Affairs was granted a loan of N3.7 billion in 2004 to purchase a chancery in Tokyo.
Ostensibly, the loan to the ministry came from the account that was meant to assist states develop alternative mineral resources to oil and gas.
In other infractions to the natural resources account, the report noted that N5.7 billion loan was granted to the Ministry of Power and Steel in 2005 for the payment of severance package to disengaged steel workers.
Similarly, in October 2007, the Ministry of Finance also withdrew N10 billion for the payment of arrears of monetisation benefits owed Federal Government parastatals.
On the ecology account, the report said that out of N329.8 billion released during the period under review, N149.8 billion was abused, representing 45 per cent.
The report revealed that N750 million was released for the development of the Abuja Downtown Mall in 2007 from the fund meant to assist states ravaged by ecological problems.
Also misappropriated from the ecological funds was a N1 billion loan to Edo State Government, released in November 2002 and March 2003, respectively.
The Presidential Research and Communication Unit also received N200 million loan from the ecological fund in November 2002.
On the stabilisation account, created to provide for unforeseen contingencies and economic downturn, the report noted that N191.7 billion from the account was misapplied.
A total of N255 billion was released to the account between 2002 and 2012, and the report put its ``level of abuse’’ at 75 per cent.
From the account, a loan of N309.2 million was granted to the Inspector-General of Police for purchase of vehicles for the UN peacekeeping operations in Haiti in 2006.
Also, N2.8 billion loan was granted to pay Federal Government of Nigeria 50 per cent contribution to the Phase 1 of the pioneer car finance scheme for public servants in paramilitary agencies in 2007.
The report by the committee also observed that out of N580 billion loans granted from the three accounts, N347.9 billion had yet to be recovered from various beneficiaries several years after.
It also noted that there were no regular reconciliation between the OAGF and the Central Bank of Nigeria.
The committee’s recommendation for the Federal Government to recover all outstanding loans within six months did not pass through at the Senate.
Also a recommendation for a legislation to be passed by the National Assembly to establish and regulate the SFA was also not passed.
In his explanation, Senate President David Mark said some of the recommendations by the committee had already been captured in a bill before the Senate to regulate the operations of the SFA.
Mark, however, said the report was a ``wake-up call’’ to the legislators to be active in their oversight functions.
The Senate, therefore, directed its Public Accounts Committee to investigate further the disbursement and repayment of loans from the SFA.
Earlier, several senators, who spoke after the presentation of the report, commended the committee for a painstaking work.
The senators were unanimous in their outrage over the revelations from the report and they conceded blame over their lax oversight functions of government agencies.
In his contribution, Sen. Victor Ndoma Egba (PDP-Cross River) said the report had shown that ``nothing has changed between when this Senate did the investigation into the PTDF and now’’.
``The situation of our public finances has even gotten worse. We are here because the system has allowed too much discretion to the executive and when you have too much discretion it becomes the rule of man as against the rule of law.
``This is because we have failed here; as far as I am concerned this is more an indictment of the NASS than of the executive. How come we allow such huge funds to be spent without any law or guidelines from 2002 till today?'' he asked colleagues.
Also speaking, Sen. Ayogu Eze (PDP-Enugu) said a major lesson from the report was for the Senate to insist that the executive must present a revenue profile before subsequent debates on the budget
``I support the suggestion that before we debate the budget we should spend a lot of time to look at the revenue profile.
``Some of the items that are captured here were said to have been used to fund budgets that we passed here.
``If we had looked at revenue profile we would have seen that some of the money is moving from one of these accounts to the budget that we are going to pass. Much as everybody is indicted, the legislature should rise up to its responsibility of overseeing the management of public funds,’’ he said.
On his part, Sen Bukar Ibrahim (ANPP-Yobe) noted that ``these abuses have been going on for as long as we have been having governments in Nigeria’’.
He appealed to his colleagues to adopt the recommendation of the committee on a legislation to regulate the disbursements from the special funds.
``What is more important is the recommendations of this Committee. There is no point crying over spilt milk.
``We can’t bring back President Obasanjo or anybody else and punish them at this stage when something has been going on all these years.What is important is to take these recommendations individually and implement them,’’ he suggested
Presenting the report, Sen. Ahmed Lawan (ANPP-Yobe), Chairman, Senate Public Accounts Committee, said the infractions were made between 2002 and June 2012.
Lawan said that several approvals of funds from the SFA during the period did not conform with the purposes for which the funds were established.
The SFA was established in 2002 as an interventionist fund for the development of the solid minerals sector, ecology and other critical areas of the economy.
The SFA, managed by the Federal Government, comprises the three per cent Development of Natural Resources Account, 1.46 per cent Derivation and Ecology Account, and 0.72 per cent Stabilisation Account.
Those deductions came from the federation account, said the report.
According to the report, N1.51 trillion accrued to the SFA as at June 30, 2012, from figures obtained from the Office of the Accountant-General of the Federation, OAGF.
Out of the amount, N1.23 trillion was recorded as total payments to beneficiaries from the account, the report said.
However, the report noted that the operation of the natural resources, ecology and stabilisation accounts were grossly abused.
It said several releases under this account were not related to the intendment of the account.
On natural resources account, the report detailed 16 abuses under this account, which amounted to N701.4 billon in 10 years, representing 100 per cent of the total amount released under the period.
Some of the infractions included a N2 billion loan granted for payment to Gitto Costruzioni General Nigeria Limited on Sept. 19, 2005.
Also the Federal Ministry of Foreign Affairs was granted a loan of N3.7 billion in 2004 to purchase a chancery in Tokyo.
Ostensibly, the loan to the ministry came from the account that was meant to assist states develop alternative mineral resources to oil and gas.
In other infractions to the natural resources account, the report noted that N5.7 billion loan was granted to the Ministry of Power and Steel in 2005 for the payment of severance package to disengaged steel workers.
Similarly, in October 2007, the Ministry of Finance also withdrew N10 billion for the payment of arrears of monetisation benefits owed Federal Government parastatals.
On the ecology account, the report said that out of N329.8 billion released during the period under review, N149.8 billion was abused, representing 45 per cent.
The report revealed that N750 million was released for the development of the Abuja Downtown Mall in 2007 from the fund meant to assist states ravaged by ecological problems.
Also misappropriated from the ecological funds was a N1 billion loan to Edo State Government, released in November 2002 and March 2003, respectively.
The Presidential Research and Communication Unit also received N200 million loan from the ecological fund in November 2002.
On the stabilisation account, created to provide for unforeseen contingencies and economic downturn, the report noted that N191.7 billion from the account was misapplied.
A total of N255 billion was released to the account between 2002 and 2012, and the report put its ``level of abuse’’ at 75 per cent.
From the account, a loan of N309.2 million was granted to the Inspector-General of Police for purchase of vehicles for the UN peacekeeping operations in Haiti in 2006.
Also, N2.8 billion loan was granted to pay Federal Government of Nigeria 50 per cent contribution to the Phase 1 of the pioneer car finance scheme for public servants in paramilitary agencies in 2007.
The report by the committee also observed that out of N580 billion loans granted from the three accounts, N347.9 billion had yet to be recovered from various beneficiaries several years after.
It also noted that there were no regular reconciliation between the OAGF and the Central Bank of Nigeria.
The committee’s recommendation for the Federal Government to recover all outstanding loans within six months did not pass through at the Senate.
Also a recommendation for a legislation to be passed by the National Assembly to establish and regulate the SFA was also not passed.
In his explanation, Senate President David Mark said some of the recommendations by the committee had already been captured in a bill before the Senate to regulate the operations of the SFA.
Mark, however, said the report was a ``wake-up call’’ to the legislators to be active in their oversight functions.
The Senate, therefore, directed its Public Accounts Committee to investigate further the disbursement and repayment of loans from the SFA.
Earlier, several senators, who spoke after the presentation of the report, commended the committee for a painstaking work.
The senators were unanimous in their outrage over the revelations from the report and they conceded blame over their lax oversight functions of government agencies.
In his contribution, Sen. Victor Ndoma Egba (PDP-Cross River) said the report had shown that ``nothing has changed between when this Senate did the investigation into the PTDF and now’’.
``The situation of our public finances has even gotten worse. We are here because the system has allowed too much discretion to the executive and when you have too much discretion it becomes the rule of man as against the rule of law.
``This is because we have failed here; as far as I am concerned this is more an indictment of the NASS than of the executive. How come we allow such huge funds to be spent without any law or guidelines from 2002 till today?'' he asked colleagues.
Also speaking, Sen. Ayogu Eze (PDP-Enugu) said a major lesson from the report was for the Senate to insist that the executive must present a revenue profile before subsequent debates on the budget
``I support the suggestion that before we debate the budget we should spend a lot of time to look at the revenue profile.
``Some of the items that are captured here were said to have been used to fund budgets that we passed here.
``If we had looked at revenue profile we would have seen that some of the money is moving from one of these accounts to the budget that we are going to pass. Much as everybody is indicted, the legislature should rise up to its responsibility of overseeing the management of public funds,’’ he said.
On his part, Sen Bukar Ibrahim (ANPP-Yobe) noted that ``these abuses have been going on for as long as we have been having governments in Nigeria’’.
He appealed to his colleagues to adopt the recommendation of the committee on a legislation to regulate the disbursements from the special funds.
``What is more important is the recommendations of this Committee. There is no point crying over spilt milk.
``We can’t bring back President Obasanjo or anybody else and punish them at this stage when something has been going on all these years.What is important is to take these recommendations individually and implement them,’’ he suggested
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