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Senate Ignores Accountant General’s Financial Abuse Warning, Approves N238.15 Billion For Customs

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It was a session marked by protests in the Senate on Tuesday, February 4, 2020, as the upper chamber approved N238.15 billion budget for the Nigerian Customs Service, NCS, amidst allegations of breaches and abuses by the agency.

But for the swift intervention of the senate president, Ahmed Lawan, the lawmakers would have rejected the report submitted by the Committee on Customs, Excise and Tariffs for the approval of the budget.

Lawan’s intervention, however, defied a recommendation last week by the Auditor General of Federation, AGF, Anthony Ayine, that the National Assembly should withdraw the budgetary allocations of Ministries, Departments and Agencies, MDAs, which failed to get their accounts audited.

The auditor general, in his recommendation while submitting the 2017 audit report to the National Assembly said: “Stringent sanctions, including withholding financial releases and sanction of the chief executive officer, should be imposed on defaulting agencies that do not render timely accounts as provided in the constitution, financial regulations and other relevant laws.”

Ayine also said that 160 agencies defaulted in the submission of audited accounts for 2016; 265 for 2017; and that 11 agencies had never submitted any financial statements since inception.

On the floor of the Senate yesterday, allegations of failure to make its accounts available for auditing, illegal withdrawals from the federation accounts as well as frivolous spending were raised against the NCS by the lawmakers as reasons its budget should not be approved.

They also alleged that the NCS, like some other agencies, has, for the past six years, not submitted its audited reports to the auditor general of the federation.

Some of the lawmakers who kicked against the report said it was sad that the NCS was getting seven percent from all revenues collected, two percent from all Value Added Tax, VAT, allocation from federation account and other revenues and still failed to submit its accounts for auditing.

In his contribution, James Manager said that irrespective of what the committee had agreed with the House of Representatives Committee, the report was too scanty for the senators to look at. “The committee should have taken a proper look at the report before submitting it to us. We need to look at the federation account properly.”

Gabriel Suswam said that before the customs budget should be passed, a proper explanation should be made, so that the Senate would understand why some figures were not adding up.

Solomon Olamilekan had earlier observed that the seven per cent for the customs was enough to defray the expenditure of the agency, noting that apart from the seven per cent, the agency still draws funds from the federation account.

Matthew Urhoghide, who is the chairman of the Committee on Public Accounts, said: “The fact that customs is collecting seven per cent does not mean that its budget should not be audited.”

Ibn Na’allah noted that because the accounts of agencies had not been audited, the nation had fallen below civilised standards. “This Senate has a duty to bring all agencies into conformity with the vision of the Federal Government. We must bring our institutions to conform with what will make the country proud. We can’t pass this kind of budget.”

In his intervention to prevent the report from being thrown out, Lawan, said: “We expect MDAs to present their audited accounts before the end of the year, especially towards the end of December or at least the first quarter of the next year, that is if we include all the calendar months.

“If any agency refuses or fails without any cogent reason, we have reason to take a drastic action when it comes to appropriation, because not to account for what you were given in the previous year, is to say you are not prepared to take a new budget.

“So, I’m advising the MDAs, especially those that are not up to date with their audited accounts to do so. We could decide as a National Assembly to take measures against agencies of government that are not up to date with their audited accounts.”

Relying on the 1999 Constitution, Ayine said: “I am required by Section 85 (5) of the Constitution of the Federal Republic of Nigeria 1999 (as amended) to submit my report on the audit of the accountant-general’s financial statements to the National Assembly within 90 days of receipt of the statements from the accountant-general of the federation.

“The financial statements of the Federal Government of Nigeria for the year ended 31st December, 2017 were first submitted to me by the accountant-general of the federation on 20th December, 2018. Following my preliminary observations, the statements were significantly amended and resubmitted on 26th April, 2019.

“In accordance with Sections 85 (2) and (5) of the constitution, I have examined and certified the accounts subject to the comments and observations contained in this report.”

He added that the financial statements of government statutory corporations, companies, commissions and so on, otherwise called parastatals, were not audited by his office in line with Section 85(3) (a) of the 1999 Constitution.

“However, in accordance with Section 85 (3)(b) of the constitution, their annual accounts and audit reports thereon shall be submitted to me for comments. 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.”

The report further revealed some defaults in the audit report of the MDAs, saying; “A number of major weaknesses and lapses in the management of public funds and resources were identified across several MDAs during the annual audit. A separate section is therefore included in this annual report to highlight the key issues.

“Our findings range from irregular expenditures to failure to surrender surplus revenues to the treasury, all running into billions of naira. Also notable was the continuing failures in the implementation of International Public Sector Accounting Standards, IPSAS.

“Overall, our findings are indicative of significant weaknesses in expenditure control, accounting, financial reporting and in the completeness and accuracy of the consolidated financial statements,” he said.

Presenting the customs budget report before the Senate earlier, Alimikhena explained that the proposal was based on the Federal Government Medium Term Expenditure Framework, MTEF.

He added that the total expenditure of N238.15 billion was being proposed for the 2020 financial year as follows:
• personnel cost, N98.61 billion representing 41.41 per cent Annex 1;
• overhead cost, N15.95 billion representing 6.70 per cent Annex 11; and
•capital cost, N123.59 billion representing 51.89 per cent Annex III.

On the recommendation, the lawmaker said: “The tasks for the NCS are enormous at this period of international security threat and dwindling economies. In consideration of the needs assessment of the service, the committee hereby recommends that the Senate do approve a total sum of N238,149,325,832.70 for the agency for the 2020 financial year.

“Given the importance of the agency in terms of economic stimulation, trade facilitation, revenue collection and security at the borders and ports, the committee hereby urges the Senate to give the budget a speedy passage.”

Hattip to Guardian

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