Early last month, it was widely reported in the media that the Office of the Auditor-General of the Federation (AuGF) uncovered alarming irregularities in contract payments amounting to billions of Naira across various ministries, departments, and agencies (MDAs) within the country. According to the findings detailed in the Auditor-General’s Annual Report on Non-Compliance and Internal Control Weaknesses for 2020-2021, significant contract fraud was revealed, involving some notable governmental agencies. The violations, covering activities between the years 2020 and 2021, included irregular payments for contracts and payments for jobs that were either partially executed or not executed at all.
In light of these public financial irregularities—and many more yet to be uncovered—this article seeks to explore possible measures or strategies to curb, if not totally eradicate, the growing incidence of contract scams, which are becoming increasingly prominent across different sectors. Some of the measures to address this menace can be proactive (preventive processes) or reactive (detective processes). Part 1 of this series focuses on the proactive approach, specifically the “Due Process Review Mechanism.”
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The concept of due process officially entered the Nigerian governance framework in 2007, following the enactment of the Due Process Review and Public Procurement Act of 2007. It is a term widely used in public governance literature to stipulate that government businesses and activities, such as contract awards, should be conducted in an open, economical, and transparent manner, devoid of favouritism or corrupt tendencies. Openness implies that the tendering process must be accessible to all, without bias toward any particular person or group. Economical considerations mean the process must prioritise cost-effectiveness while maintaining high quality. Transparency ensures the bidding process is non-restrictive, inclusive, and accessible from start to finish. Freedom from favouritism means the bidding process must be impartial, free from sentimental attachments or undue influence. Finally, corruption-free execution requires the process to be insulated from gratification or financial inducements in any form.
Another perspective sees due process as a mechanism certifying that only projects meeting all requirements are funded while promoting adherence to international competitive bidding standards. In Nigeria, the Budget Monitoring and Price Intelligence Unit (BMPIU) is tasked with ensuring compliance with due process. Its primary objective is to promote fiscal transparency and adherence to government guidelines on budgeting and procurement of facilities or contract services at the most affordable cost. Additional objectives include ensuring procurement rules and procedures are implementable and enforceable.
For due process mechanisms to thrive in government and public sector entities, several factors must be operational. A well-structured internal control system must be deployed alongside effective financial controls. Adherence to budgets and budgetary controls is essential, as is efficient expenditure management. The system must aim to eliminate leakages, wastages, and mismanagement while ensuring open and transparent revenue collection processes. Proper record-keeping and regular external audits of government records and books are crucial. Moreover, government employees must be reoriented to comply with ethical codes of conduct. All government procurements should be properly advertised before their review by the BMPIU. Lastly, a robust judicial system is necessary to prosecute public officials involved in financial misconduct, serving as a deterrent to others.
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The adoption of the due process mechanism by the government and its functionaries, alongside all ministries, departments, and agencies (MDAs), offers numerous benefits. It significantly reduces contract inflation, leading to cost savings through BMPIU-reviewed contracts. It also creates a level playing field for all contract bidders and promotes strict adherence to international competitive bidding processes, ensuring efficient contract execution. Furthermore, it helps reorient contract bidders and the general public to ensure that government activities are conducted openly, economically, and transparently.
Kingsley Ndubueze Ayozie, KJW, FCTI, FCA—an advocate of good governance and a chartered accountant—writes from Lagos.
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