Financial Recklessness: NCAA, FAAN, many other govt agencies have case to answer.

By Levinus Nwabughiogu

 Hon. Adeola Solomon Olamilekan is the Chairman, House of Representatives Committee on Public Accounts. In this interview, the lawmaker, who represents Alimosho Federal Constituency of Lagos State, x-rays the activities of his Committee, saying that many federal ministries and agencies stink.

How has it been chairing the House of Representatives Committee on Public Accounts?
It has been wonderful two years chairing the Committee on Public Accounts of the Federal House of Representatives. On assumption of office as the chairman of the Committee in September 2011,

part of the challenges this committee was confronted with was the backlog of unattended Auditor-General’s (AG) report over the years either by omission, error or lack of human capacity.

When I came on board, I went as far back as 2003 Auditor- General of the Federation (AGF) report which was left unattended to. I have 2003/2010. As a chartered accountant, I cannot just set aside the unattended report and say I want to start on a clean slate. What will become of the unattended report?

So, I took it upon myself to start the work from 2003, consolidate altogether and ensure that each time the ministries appear before us, we start from 2003 to 2011. And we succeeded in attending to over 150 out of 601 Federal Government agencies. It took some time to lay the report before the House. And since we have been able to reduce the backlog, the Committee decided to streamline it to 2010/2011 which we are currently working on. But, even at that, there are still challenges. Many of these government agencies have one reason or the other to dodge their appearance before the Committee.

You have been indicted by the office of the Auditor-General for financial impropriety and it is expected that you appear and defend your position. But the next thing is to see letter of excuses that today, we are in Malaysia , tomorrow, we are in London , next tomorrow, we are in the US and so on. So, working under that disguise, the Committee has no choice than to keep rescheduling. And don’t forget, if we have scheduled an agency for this week and it is not appearing and we have scheduled other agencies for the next six months, there is no space to accommodate it.

Bringing it back will be after another six months. But we have decided that any agency that we send letter to and it refuses not to appear hiding under the disguise that it is leaving the country; you have to give documented evidence to show that you are not within the country at the time of the exercise. If you are on sick bed, you have to show us letter to show that you are unavoidably absent at the time as a result of this and that. Any agency that fails to go in that direction, the Committee will not hesitate to issue warrant of arrest to forcefully bring it to appear before the Committee. So, this is a new idea we have brought to it and we are working round the clock to ensure that that becomes effective. Because I continue to wonder; this is spent money.

*Olamilekan Adeola

And the AGF has found you wanting. Before this query arrives the House, there are processes.
There is what we called an exit meeting, a meeting between the agency and the office of AGF. At exit meeting, all the findings of the AGF will be given to that agency to respond to within a specified period of time and failure on the part of the agency to respond leads to query. That same agency that cannot clear itself at the exit meeting with the AGF Office now believes that when it appears before the House, it is the prerogative of the House to clear it with documents they have refused to give to the Office of AG at the exit meeting. And that it why we as a Committee go a step further. That is why our reports don’t come out on time. We go a step further by asking for the original of the documents, asking for the working papers of the Office of the AGF and compare and come out with a position. We still carry out what we call status enquiry on the financial activities of that particular agency.

Now, if you any agency one, two, three times and it refuses to appear, we issue warrant of arrest. I think
that will put the agencies on their toes. In Ghana, the Committee on Public Accounts sits on live telecast. It is not shrouded in secrecy or done in the Committee hearing room. If that opportunity is given to us, we will ensure that ours is also televised live. I think with that, the perception, the thinking and the workings of government will change faster.

Can you tell us some of your findings so far?
There are a lot of findings. The Auditor General’s Report is a public document.
The media should have access to it. Once the document is laid before the House, it becomes a public document. You have the right to know what is contained in that report. And it is expected of the Office of the AGF to invite the media and tell them the content of the report. Last week, we invited the Office of AGF for the 2011 report. All it could give to us was a summary of the report. It is not supposed to be. What are the high points?

What are the low points and what are those things that we discovered which we believe you want the House to look into? 
So, the committee mandated the Office to go back, worknd report accordingly. There are flaws, anomalies fraud that have been discovered by this Committee. We had missing files.

Ministry of Science and Technology appeared before the Committee and could not account for a contract file of over N200million. They could not account for documentation of expenditure for over one hundred and something million Naira. That is just one out of the lot. You see ministries trampling on the agencies under them collecting funds that are not budgeted for; like what you have just seen in the case of Aviation Minister that went to into NCAA accounts; money which had been set aside to monitor airplanes; money paid by airline operators to NCAA to work with, money that has not been provided for in the budget, the Minister believes NCAA is under her purview and she could go into the account, withdraw money from that account and spend the way she likes.

And we have written to NCAA now to appear before the Committee, ‘Give us the statement of your accounts in the last 5 years’.

Because we are not just looking at NCAA with the purchase of the bullet proof cars. There are transactions that must have gone on behind the scene.

And we are not only going to deal with NCAA, we are also looking in the direction of Federal Airports Authority of Nigeria (FAAN) relating to the issue of Bilateral Agreement Special Accounts (BASA) ; what is in that account is several billions of dollars and Naira?

We need that account from these two agencies for the last five years, inflows and outflows. We will marry the two with relevant documentary evidence such as the vouchers that have been used and the approvals that have been sought to access those funds.  When you come to the ministry, for instance, of education, they will go as far as
TETFUND, UBEC and all other agencies under its purview asking for funds to be moved to the ministry; money that has been made in accordance with the law setting up that particular agency to
be diverted for the usage of the ministry.

And don’t forget those agencies funds are charged against consolidated revenue. If I don’t know any, I know that of UBEC. In a year, as part of its first line charge from government, UBEC receives a minimum ofN100 to N200 billion.
How have we applied these fund for the betterment of our education? And if you compare such funds
released to those agencies with what is happening in our education system, you find out that
there is nothing on ground. So, we are looking at these issues holistically. When you look at the funds going down the drain unknown to many Nigerians and if you start counting on the tips of our fingers, you start seeing agencies like the Ecological Funds Office, Ministry of Education, Water Resources and the worst of them is the Ministry of Environment. So, I am of the firm belief that these errors, anomalies that we noticed in all these accounts will give room for change. We will be laying before the House, very soon, the service wide vote account. The vote constitutes 40% of the overall budget in 2013 specifically. And that particular vote is spent at the discretion of the President.
These are not funds to be accessed by any ministry or agency of government. If any ministry or an agency wants to access that fund, you apply to the Director –General of the Budget Office who will seek approval of Mr President through the Minister of Finance before any agency can access.

We have tried to analyze our recurrent expenditure for the year; the capital expenditure and how much was the provision for the special expenditure service wide vote head for the year and what has been the performances of each of the heads, performance of the capital vote head, and the performance of the
recurrent vote head; performance of the service wide vote heads. But I am glad that while other votes head of the Federal Government such as  the special capital will perform as low as 30 %, the recurrent will perform as high as 70 to 80%, the service wide vote will perform as high as 90 to 95 %. And it is the aggregate of these two that we call budget performance for the year. But we have been able to analyze that and I believe it will go a long way to throw more light to what is non- performance of our budget.

Does it mean that the Committee did not have prior knowledge of the financial reports of these agencies because you are asking for reports that span 2003 to 2012?

I want you to understand the workings of this committee. The Committee is empowered by the Constitution to do two things.

One: to work on the report laid before the House from the Office of the Auditor-General of the Federation. Two: to carry out investigation into the accounts of the agencies of the Federal Governments. Now, what we have before us is the query raised by the Office of the AGF on the financial activities of NCAA. Looking in that direction, the Committee now went a step further by trying to ask, prior to the scandal, for the details of accounts of NCAA and FAAN. The new managing Director of FAAN has been avoiding the Committee.

He has been dodging. If you listened to his comment, he said the issue of procurement of bullet-proof cars is politics. I continue to wonder when somebody who ought to be a technocrat, somebody who ought to be working to ensure safety of industry, is saying that the purchase of bullet proof cars, which is before the public, is all politics. We have invited him and the NCAA DG for more than three times. All they do is send letters to the Committee that they are not chanced. But the Committee is going fully out with them. They have queries to answer. It is not that we don’t have foreknowledge of what is happening.

But the Committee goes a step further to look into the activities of the agencies.

You raised the issue of service wide vote account earlier and said that you looked at the activities covering more than five years. Can you tell us you findings?

I want to be a little bit careful in discussing the contents of this report. But I will just give you an idea of what the report is all about. The Federal Government budget that you see every year is majorly divided into capital and expenditure revenue. When you come to the area of expenditure, you have the recurrent and capital. And the capital is divided into overhead and personnel. Now, as a result of safeties, at the state level, we normally refer to service wide vote as expenditure vote head. What the vote head  tends to achieve is that should there be any emergency and the governor needs to access the funds relating to any agency, he can always go into the special expenditure vote head and draw that fund from there.

But for you to incur expenditure in that head, you need what we call Authority to Incur Expenditure, AIE. But, if you look at the ministries and agencies, go into their budget, you will find out that there is nothing to write home about. For instance, year in year out, the structure of Nigeria ’s budget has been 72 percent. The last one; 72% of it was for recurrent while just a paltry sum of 28 percent was for capital. Now looking at that, the remaining difference of that particularly budget is further divided into three. The 60 percent of the overall budget is for recurrent and capital expenditure of all the ministries and parastatals. That is what the minister, the permanent secretary can write on concerning any agency or so that is contained in his or her own budget.
For instance, it is the idea of the Ministry of Works and Infrastructure to reconstruct Gwagwalada/Abuja, Lokaja road this year.

And the cost of that particular road is N40 billion. It is expected that if we have a budget that will spread over four years, you say every year, the ministry will budget N10 billion for this particular road. So, once the N10biilion has been exhausted, we have to wait till next year’s budget. But along the line, we know that, in the next four years, that road will be ready.

But this is not the case. The ministry approaches the Budget Office that they need N30billion to build this road, the Office will say they don’t have N30 billion; go and plan on N5 billion Naira to start the road. The remaining N25 billion will be taken to the service wide vote. So, by the time the ministry tells the Budget Department that this is our budget this year, what the ministry is told is, ‘you need N5 billion for this year, go and plan on N2 billion’. The remaining N3 billion is set aside. By the time they collect all the funds from these agencies, they put into service wide vote account which constitutes over 40 per cent of the overall budget size of the Federal Government.