Transport ministry spent public funds without following due process – Auditor-General

The sum of N1.66bn has been discovered to have been spent by the Federal Ministry of Transportation in 2021 without adherence to standard procedures and due processes.

This formed part of findings contained in an annual report of the Auditor-General for the Federation on Non-compliance/internal control weakness in Mnistries, Departments and Agencies (MDAs) for the period January to December 31, 2021, published recently.

The audit at the Federal Ministry of Transportation for the period under review comprised issues of diversion of public funds, payment of ghost workers, payment for services not rendered among others, totalling a financial cost of N1,663,276,505. Chibuike Amaechi was minister of transport in 2021.

Unjustified Spending

The audit report found out that over N1bn was used for personnel audit without relevant records and documents.

According to the findings, N968 million was used for salaries and wages, while social contribution totalling N1.089 billion was paid for audit of personnel, contravening Paragraph 110 of the Financial Regulations, 2009, and Section 85 (2) of the 1999 Constitution of the Federal Republic of Nigeria (as amended).

The report noted that all efforts made towards obtaining relevant records and documents such as nominal roll, monthly payslips, variation control file, list of newly employed staff, establishment returns of each department, among others, to facilitate the audit examination of personnel cost proved fruitless.

The report attributed the anomalies to weaknesses in the internal control system at the ministry, resulting in payment to ghost workers and diversion of public funds.

The auditor-general recommended that the permanent secretary prove to the Public Accounts Committees of the National Assembly how N1,089,848,974.00 was used by providing relevant records and documents, or face sanctions relating to irregular payment, failure to manage public funds effectively and gross misconduct as specified in paragraphs 3106, 3115 and 3129 of the Financial Regulations, 2009.

The report also uncovered N93.million used as payments for training programmes without relevant supporting documents.

The report explained, “Eighteen (18) payments totaling N93,539,100.00 (Ninety three million, five hundred and thirty nine thousand, one hundred naira) were made between June and September, 2021 for workshops/trainings of the officers of the Ministry.

“The Ministry failed to attach relevant supporting documents such as letter of invitation, reports, evidence of attendance, copies of the certificates issued, pictures etc. to the paid vouchers used in effecting the payments.”

These actions contravene paragraphs 708, 603 (i) and 415 of the Financial Regulations, 2009.

Responding, the management said, “Most of the payments captured are actually the DTA element of the payment which was paid to the officers to enable them to attend the training programme. Where the course fee element was paid to a member of staff, it must be as a result of the fact that the consultant cannot be found on the GIFMIS platform to enable direct payment. The relevant documents are hereby provided for your perusal.”

The report however said the findings remain valid until the permanent secretary justifies to the Public Accounts Committees of the National Assembly (NASS), “the payment of N93,539,100.00 (Ninety three million, five hundred and thirty nine thousand, one hundred naira) without supporting documents.

“Account for the sum of N93,539,100.00 paid to officers of the Ministry, recover and remit the sum of N93,539,100.00 to the Treasury,” as well as forward evidence of remittance to NASS, otherwise, face sanctions as specified in paragraph 3106 of the Financial Regulations, 2009.”

Irregular Payments

The report exposed irregular transfers of over N400 million to Nigerian Export-Import bank (NEXIM), disregarding paragraphs 112(i) and 415 of the Financial Regulations, 2009.

The audit report observed, “A paid voucher with Reference No. FMOT/ABJ/CAP/169 dated 31st March, 2021 amounting to N25,177,312.00 (Twenty five million, one hundred and seventy seven thousand, three hundred and twelve naira) was made to the Nigerian Export-Import Bank (NEXIM) to provide a Seed Fund for the implementation of Economic Community of West African States Inter-States Road Transit (ECOWAS/ISRT) Scheme for year 2020.

“The amount remitted to the Nigerian Export-Import Bank account by the Ministry has so far risen to N400,177,312.00 (Four hundred million, one hundred and seventy- seven thousand, three hundred and twelve naira), while the expected target is #500 million naira.

“There was no concrete evidence to show that: (a) the money contributed is presently being put to use (b) (ECOWAS/ISRT) Scheme is actually existing; and (c) the Scheme is On-Going since 2015 till date, and bank statement/other evidence of actual transfer from NEXIM Bank to ECOWAS was not made available for audit.”

Following the management’s inability to provide satisfactory response to the issue raised, the Auditor-General’s report recommended that the ministry’s permanent secretary be requested to: “Produce to the Public Accounts Committees of the National Assembly, evidence that Economic of West African States Inter-State Road Transit (ECOWAS/ISRT) Scheme is existing and on-going.

“Account to the Public Accounts Committees of the National Assembly, the sum of N400,177,312.00 (Four hundred million, one hundred and seventy-seven thousand, three hundred and twelve naira) transferred to NEXIM.

“Recover and remit to the Treasury, the sum of 400,177,312.00 and forward evidence of remittance to the Public Accounts Committees of the National Assembly, otherwise, sanctions relating to irregular payment, failure to manage public funds effectively and gross misconduct as specified in paragraphs 3106, 3115 and 3129 of the Financial Regulations, 2009 respectively, should apply.”

Unapproved Travel Expenditure

Similarly, N68.59 million was reported as payment for overseas travel without approval, failing to comply with Paragraph 2 (i) of the Establishment Circular of 15th October, 2019 with Ref No. SGF/OP/I/S.3/XII/158, which requires that all yearly travel plans for statutory meetings and engagements receive express clearance from the Office of the Secretary to the Government of the Federation “and/or the Office of the Head of the Civil Service of the Federation within the first quarter of the fiscal year before Implementation.”

Also, Paragraph 2 (ii) of the document mentioned above indicates that all public funded local and foreign travels must be strictly, for official purposes, be backed with documentary evidence, stressing that foreign travels must be for highly essential, statutory engagements that are beneficial to the interest of Nigeria.

The audit observed that: “Six (6) paid vouchers totaling #33,563,469.10 (Thirty three million, five hundred and sixty three thousand, four hundred and sixty nine naira, ten kobo) were raised in favour of officials of the Ministry for Conference and other official Programmes in Kenya, South Africa, Morocco, Greece and France.

“Evidence of approval by the Head of Civil Service of the Federation or the Secretary to the Government of the Federation was not attached to the payment voucher or presented to audit, and three (3) officers of the Ministry were paid US$3000 (three thousand US dollars) as contingency allowance for the trips. This amount remained unretired at the time of the audit exercise.”

Although the management responded, the Auditor-General’s report flayed the response, recommending that the ministry explain to NASS why the sum of N33.56 billion was used for overseas travel without approval by the relevant government authorities, as well as show proof of US$3,000 used as contingency allowance.

The audit urged the ministry to recover and remit to the Treasury the funds and forward evidence of remittance to National Assembly, or face strict sanctions accordingly.

Contract Award Without Due Process

Furthermore, N11.1 million was found as payment made for course and training fees without due process being followed by the transport ministry.

“The Ministry paid Course Fees amounting to N11,120,000.00 (Eleven million, on hundred and twenty thousand naira) to the Nigerian Institute of Transport Technology (NITT) for the training of 78 participants drawn from various departments. The sum of N90,000.00, and N100,000.00 respectively, were paid for each participant as course fees,” said the report.

The Auditor-General’s report faulted the ministry’s action for failing to provide evidence of open competitive bidding such as newspaper advertisement, quotation of other bidders, technical or evaluation report for award of the contract.
The report also noted that out of the payments made, N7m was paid to NITT without Value Added Tax, Withholding Tax, and Stamp Duty deductions.

It therefore called for recovery and remittance of the funds to the treasury, or severe sanctions apply according to appropriate financial regulations.

Business Day recalls that President Bola Tinubu had, in September, reaffirmed the Federal Government’s dedication to strengthening the independence of the Office of the Auditor-General of the Federation (OAuGF). This move, he said, aims to enhance its effectiveness and efficiency towards executing its mandate.

Tinubu, represented by George Akume, Secretary to the Government of the Federation, emphasised this commitment during the public presentation of the OAuGF Strategic Plan 2024-2028 in Abuja.