As part of efforts to ensure that funds collected are remitted into its government accounts, the Federal Government has ordered the audit of all revenue generating agencies in the country.
The Minister of Finance, Mrs. Kemi Adeosun stated this while speaking to State House correspondents, shortly after the inaugural Federal Executive Council (FEC) meeting.
She disclosed that these agencies had been mandated to present their budgets for approval.
The Finance Minister, who was flanked by Minister of Information and Culture counterpart, Alhaji Lai Mohammed, stated that the essence of the audit was to plug loopholes and ensure free funds for the implementation of the budget when passed.
“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 said .
The minister stated that the expected outcome of the audit is that internally Generated Revenue (IGR), would form the fulcrum of the 2016 budget and beyond, would actually become a reality.
According to her, “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.”
She continued, “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.
Speaking further, Adeosun said, “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.”
On the directive given to Federal Government agencies, including the Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian National Petroleum Corporation (NNPC) and others to submit their budgets for approval, Adeosun confirmed that a circular was issued to that effect in 2015.
In her words, “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 disclosed that 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.