New Telegraph

February 29, 2024

Audit of MDAs: Fraudulent deals stun Senate c’ttee

CHUKWU DAVID reports that the Senate Public Accounts Committee that is considering reports of the Auditor-General of the Federation has made some stunning discoveries on the shoddy operations of some establishments of the Federal Government

The Senate Public Accounts Committee, which is chaired by Senator Matthew Urhoghide, a Peoples Democratic Party (PDP), Edo South chieftain is constitutionally empowered to scrutinize the activities of ministries, departments and agencies (MDAs) of the Federal Government, with a view to tackling corruption in the agencies and ensuring accountability in public service. The committee, specifically undertakes this constitutional cum legislative assignment, by considering reports of the Auditor-General of the Federation, which is usually made available to the apex legislative Assembly on yearly basis.

The legislative scrutiny of these reports forms the major tool off overnight of the MDAs by the country’s highest lawmaking institution. Through this oversight mechanism, the Senate has been able to unravel so many rots and corruption going on in the various government establishments, set up to serve the needs of the country and the citizenry in particular. In fact, the Senate Public Accounts Committee appears to be overwhelmed by the quantum of fraud perpetrated in MDAs.

Just last week, the Senate Public Accounts Committee, discovered how the Management of Petroleum Equalization Fund (PEF) placed N34 billion in a fixed deposit account without remitting the interest of N182 million to the coffers of the Federal Government. According to the available information, the agency only remitted N82 million, thereby pocketing N100 million from the interest of N34 billion in various banks.

The Senate Public Accounts Committee made the discovery while considering the 2016 Auditor-General’s report, which is currently being scrutinized by the apex Chamber. However, the management of PEF failed to appear before the committee, which was scheduled for Wednesday last week, just as there was no letter by the agency to justify its absence at the investigative hearing.

The new management of the Nigerian Upstream Regulatory Commission is expected to respond to the allegation since the Federal Government had scrapped the Petroleum Equalization Fund, following the enactment of the Petroleum Industrial Act (PIA). The query by the Office of the Auditor-General of the Federation (OAGF) to PEF reads in part: “At the Petroleum Equalization Fund (Management) Board, it was revealed that in 2015, the Board placed the sum of N34.3 billion in fixed deposit accounts in various banks which yielded interest in the sum of N182.4 million.

“However, the Board remitted only the sum of N82. 2 million to the Consolidated Revenue Fund, leaving a balance of N100.1 million unaccounted for. “This act is a contravention of the provision of Financial Regulation 222, which stipulates that “interest earned on bank accounts must be properly classified to the appropriate revenue head of Accounts and paid to the Consolidated Revenue Fund.

“The Executive Secretary should remit the outstanding interest yield of N100.1 million immediately to the Consolidated Revenue Fund and furnish evidence of remittance for my verification. “Failure to comply should attract appropriate sanctions in line with Financial Regulation 3112, which stipulates that “where an officer fails to give a satisfactory reply to an audit query within seven days for his failure to account for govern-ment revenue, such officer shall be surcharged for the full amount involved and such officer handed over to either the Economic and Financial Crimes Commission (EFCC) or Independent Corrupt Practices and other related offences Commission (ICPC).”

In a related development, the Senate Public Accounts Committee also discovered how the National Agency for Food and Drug Administration and Control (NAFDAC) paid N97 million for a used 1,000KVA generator at the Isolo office of the agency in Lagos. It was also reported that the generator later packed up barely four months after it was purchased.

It was discovered that NAFDAC ignored the recommendation of the supervising consultants that two 500KVA generators should be supplied, and instead purchased 1,000 KVA used Caterpillar generator. While the Senate panel considered the report of the Auditor-General, the Acting Chairman of the Committee, Senator Suleiman Hadejia, who expressed dissatisfaction with the development, called for the prosecution of the affected contractor by the Independent Corrupt Practices and Offences Commission (ICPC).

Reacting to the query, the Director- General of NAFDAC, Prof. Mojisola Adeyeye, said that no action was taken on the matter until she started her tenure as DG of the agency, adding that the contractor had been blacklisted by the agency.

She said that the ICPC is currently handling the matter but was unable to establish whether the contractor had been prosecuted by the anti-graft agency. The committee, however, vacated the query but urged the agency to ensure that the contractor is prosecuted. The query read in part: “A company was awarded a contract to supply a 1,000KVA Caterpillar generator at NAFDAC Isolo office complex at the cost of N97,096,841.00 (Ninety-seven million, ninety-six thousand, eight hundred and forty- one naira). “The physical verification of the item revealed the following: (i) (ii) (iii).

The contract was awarded and executed against the recommendation of the supervising consultants that 2 (two) 500KVA generators should be supplied instead. The capacity of the 1,000KVA generator supplied, is more than the requirement of the entire Isolo office complex. “The generator functioned for only four months and packed up and for over one year, at the time of audit visit, the management of NAFDAC had not taken any step to seek for a replacement under the warranty. The Director-General was therefore asked to take urgent steps to recoup the amount invested in this project or cause the contractors to replace the equipment with an appropriate recommended generator that will match the capacity of the building and equipment at the Isolo Office complex.

“Responding, the Director-General explained that the contractor had been requested to immediately replace the generator with a new one since it was discovered that the 1,000 KVA generator set supplied was not a brand new caterpillar generator. “She attached a letter dated 3rd April 2016, which was acknowledged by the contractor on 3rd May, 2016. In the letter, the contractor was asked to replace the generator on or before 17th May, 2016, failing which the agency will take necessary action to ensure it receives value for money for the 1000 KVA generator it paid for.

“However, over 18 months after the letter was delivered to the contractor, NAFDAC had not taken further action on the matter. The Director-General of NAFDAC was asked to as a matter of urgency, refer this matter to the EFCC for recovery of the amount paid and prosecution of the contractor, who should also be blacklisted from all future dealings with NAFDAC, as required by Financial Regulation 3105. My position on the Director- General’s response was communicated to her.”

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