16 revenue-generating agencies fail to remit N19bn to Consolidated Revenue Fund

A recent report from the Auditor General of the Federation’s office has revealed that 16 revenue-generating agencies did not remit over N19 billion to the Consolidated Revenue Fund in 2017.

The Consolidated Revenue Fund is an account that is owned and managed by the Federal Government, where all its revenues are paid.

The Auditor General’s office has the fundamental function to protect public interest by performing a detailed and objective examination of public accounts and also scrutinising ministries, departments and agencies’ expenses.

According to the report, the Bureau of Public Enterprise (BPE) topped the list of unremitted revenue, with the sum of N7.58 billion.

Some of the other affected agencies and institutions include Federal University Dutsin-ma, Katsina State, with an unremitted sum of N31,461,559.60; University of Abuja, Abuja (N603,446,911.37); Modibbo Adama University of Technology, Yola, Adamawa State (N8,884,010.00); Federal University, Oye-Ekiti, Ekiti State (N24,812,174.73); Federal University of Technology, Owerri, Imo State (N748,178,771.25), and the Teachers Registration Council of Nigeria (N355,059,967.21).

Others are the National Examination Council (NECO) with an unremitted sum of N3,498,463,711.01; News Agency of Nigeria with N32,324,585.60; Securities and Exchange Commission (SEC) with N2,297,199,080.00, and the Federal Medical Centre, Abeokuta, Ogun State, with N155,169,590.25, among others.

The report also noted that several revenue-generating agencies dissipate funds on excessive overhead expenditure and extra-budgetary expenditure on contracts thereby reducing their operating surplus.

“We also found that 26 of the MDAs that were audited did not deduct and/or remit a total of N1.65 billion,” the report said.

The Auditor-General’s report  also observed that 160 agencies defaulted in submission of audited accounts for 2016; 265 agencies defaulted in submission of audited accounts for 2017, while 11 agencies have never submitted any financial statements since inception.

“Some of the government corporations, companies and commissions have not submitted their audited accounts to me as at 30th June 2019, despite the provision of Financial Regulation 3210(v) which enjoins the Chief Executive Officers of these bodies to submit both the audited accounts and management reports to me not later than 31st May of the following year of accounts,” Anthony Ayine, Auditor-General of the Federation, said in the report.

“As in previous years, the annual budgeting process of the Federal Government remains flawed and unable to support genuine development. Delays in the passage of the budget had a direct impact on the ability of MDAs to perform their functions and rendered the annual budget execution process ineffective to a large extent (especially regarding capital expenditures),” Ayine said.

The Auditor-General said there is the need for the executive and the legislature to work better together on the passage and implementation of budgets if Nigeria is to achieve meaningful development.

“Overall, audit found that the sum of N20.6 billion in various taxes such as Pay As You Earn(PAYE), Withholding Tax (WHT) and Value Added Tax (VAT) in the year under review was not remitted to the Consolidated Revenue Fund of the Federal Government by MDAs,” the report said.

The office of the Auditor-General also noted that non-remittance of revenue surpluses by revenue-generating agencies affects financial liquidity of the government and reduces government’s efforts to adequately fund its annual budget which may increase government’s internal and external borrowing, thereby increasing the debt burden.

The Auditor-General recommended that a proper strategy to improve the oversight of revenue-generating agencies should be devised and implemented.

“A timely reconciliation of all revenues accruing to the Consolidated Revenue Fund should be done immediately, to ensure that funds meant for the government are remitted immediately. Adequate sanctions should be implemented against the heads of agencies failing to remit appropriately and in a timely manner,” the report said.

On tax refunds, it said that in the course of ascertaining the appropriateness and accuracy of outflows from tax refund account maintained by both Federal Inland Revenue Service (FIRS) and Office of the Auditor-General of the Federation (OAGF) in 2017, it was observed that FIRS’ internal processes were not compliant with Section 23(3) of FIRS ACT 2007.

The Act states explicitly that “any tax refund shall be made within 90 days of the decision of the service made to subsection (2) of this section, with the option of setting off against future tax by the taxpayer”.

Details of the report showed that applications for tax refund as of December 31, 2017, stood at N47.4 billion while the amount due for payments on that date stood at N23.1 billion. Similarly, the budgetary provision for tax refund in 2017 was N25 billion but there were delays in approval from management after tax audit. There were also delays in the refund to taxpayers after tax audit and approval stages had been carried out, the report added.

The Auditor-General noted that the development created inconvenience to taxpayers and impacted the finances of households and businesses in the country.

“The chairman of FIRS is required to ensure that the yearly budgetary provision for tax refund is adequate and that the 90-day timeframe for tax refund is met,” the report said.