ONC0VERED! How Fashola's Works Ministry Spent N4.6bn Without Approval, Appropriation
Thompson Nsisongabasi
Nov 20, 2024
Audit Report Reveals Fashola's Works Ministry Spent N4.6bn Without Approval, Appropriation
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An audit report by the Office of the Auditor-General for the Federation (OAuGF) has uncovered financial irregularities totalling over N4.64 billion in the Ministry of Works and Housing between 2020 and 2021.
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According to The Punch, the findings from the OAuGF's annual report on the ministry's activities between 2020 and 2021 revealed significant lapses in internal controls while Babatunde Fashola, former Lagos State governor, was in charge.
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The report did not only detail how payments were made without proper documentation, but also exposed extra-budgetary expenditures, mobilisation fees exceeding approved thresholds, and how contracts were awarded without following due process.
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It was also revealed that N1.08 billion was paid from the Government Integrated Financial Management Information System (GIFMIS) account without the requisite payment vouchers. This violated Paragraph 601 of the Financial Regulations, 2009.
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The report also stated that N546 million was transferred to project accounts without adequate documentation or budgetary provision.
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While attributing the anomalies discovered to weak internal control mechanisms in the ministry, the report also warned of risks such as fund misappropriation and loss.
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It stated that the ministry failed to respond to its queries on the issues raised. The report then recommended that the ministry's Permanent Secretary justify the payments, recover the funds and remit them to the Treasury.
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It also recommended that evidence of compliance be submitted to the National Assembly's Public Accounts Committees.
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EXTRA-BUDGETARY SPENDING
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On extra-budgetary spending, the report uncovered expenditures amounting to N2.89 billion, including N1.88 billion spent without legislative appropriation.
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The report also stated that over N1 billion was paid to contractors for road projects in Katsina State, but these were only included in the 2017 Appropriation Act.
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"The sum of N1,883,795,670.51 (One billion, eight hundred and eighty-three million, seven hundred and ninety-five thousand, six hundred and seventy naira, fifty-one kobo) was expended by the Ministry without evidence of appropriation,ÔÇØ the report reads in part.
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"The sum of N1,003,039,708.79 (One billion, three million, thirty-nine thousand, seven hundred and eight naira, seventy-nine kobo) was paid to four contractors for the construction of roads in Daura, Katsina State.
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"The project was budgeted for in the 2017 Appropriation Act, and approval for the extra-budgetary expenditures in (i) and (ii) above, totalling N2,886,835,379.30 (Two billion, eight hundred and eighty-six million, eight hundred and thirty-five thousand, three hundred and seventy-nine naira, thirty kobo) by the National Assembly was not presented for audit.
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"The above anomalies could be attributed to weaknesses in the internal control system at the Federal Ministry of Works (Housing Sector).ÔÇØ
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The report advised the ministry to not only recover the funds and ensure remittance to the Treasury but also implement sanctions against officials involved in the irregular awards.
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OTHER FINANCIAL INFRACTIONS
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The report also pointed out that the ministry paid N110.81 million as mobilisation fees for a project, exceeding the 15% limit prescribed by Paragraph 2933 of the Financial Regulations.
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Interestingly, the contract was also awarded on a Sunday, raising concerns about procedural integrity.
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The report revealed that a contract worth N46.31 million for classroom construction in Edo State was awarded without adhering to due process.
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It was noted that N40.83 million, representing 88.18% of the contract sum, was paid to the contractor, exceeding mobilisation thresholds.
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Five contracts worth N27.84 million were also awarded without obtaining bids from at least three unrelated contractors, as required under Section 24 (1) of the Public Procurement Act, 2007.
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The report painted a grim picture of financial management in the Federal Ministry of Works (Housing Sector). It cited pervasive internal control weaknesses, poor compliance and lack of accountability.
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It also stressed the need for urgent reforms to prevent further financial mismanagement and safeguard public funds.
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FIJ
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— Thompson Nsisongabasi