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FG misappropriated N1.5tn in Special Funds Accounts –Senate

By on May 1, 2013

The Senate on Tuesday considered the report of its Committee on Public Accounts, which detailed how the sum of N1.51tn in the Special Funds Accounts mismanaged by the Federal Government between 2002 and 2012, concluding that poor legislative oversight was partly responsible for the abuse.

The accounts comprised the three per cent Natural Resources Fund, the 1.46 per cent Derivation and Ecology Account and the 0.72 per cent Stabilisation Account.

Presenting the report for consideration, the Chairman of the committee, Senator Ahmed Lawan, said the money accrued to the three accounts as of June 30, 2012, of which N1.24tn was paid out.

He said a total of N580bn was also paid out to various organisations and individuals as loans contrary to the objectives of the funds, even as N348bn of the borrowed fund had yet to be refunded.

Giving a further breaking down of the loans, the report stated, “The operation of the National Resources Account is grossly abused because several releases under this account were not related to the intendment of the account.

“A total of N329,329,745,916 was granted as loan, out of which N200,585,790,991.64 is still outstanding under the National Resources Account.

“Under the Derivation and Ecology Account, a total of N61,000,000,000 was granted as loan out of which N30,000,000,000 is still outstanding.”

One notable observation of the committee was the 100 per cent abuse of the Development of Natural Resources Account.

It revealed that of the N701.5bn, which accrued to the account, not a naira was used for the development of natural resources.

Instead, the amount was used either as loans to other agencies and organisations to finance deficits and shortfalls, or were paid out to finance other government projects.

For the Derivation and Ecology Account, out of the total N329.9bn paid out, N149.9bn was allegedly diverted to other uses outsides its mandate.

The same observation was made on the Stabilisation Account, where a total of N191.8bn was allegedly misapplied out of the N255.5bn that accrued to the account.

Some of the inexplicable loans granted from the accounts, according to the committee, include the N87.7bn granted to the Independent National Electoral Commission in 2010 to commence fresh voters’ registration even though the exercise was provided for in the budget; N2bn granted to Gitto Construction Company; N1bn granted to the Edo State Government under the leadership of Mr. Lucky Igbinedion; N12bn granted to Ghana and Sao Tome and Principe in 2004 and 2007, respectively; and the N200m released to the Presidential Research and Communication Unit in 2002.

The committee observed that “several approvals of funds from the Special Funds Accounts do not conform to the purposes for which the funds were established. There are no operational guidelines for the administration, regulation, approval and procedures for the release of money from the funds.”

The committee stated in its report, “The funds are practically being operated as loan granting pools. Several beneficiaries of the funds utilise the funds for purposes that are not contemplated by the intendment of the funds.

“The socio-economic development and environmental integrity of Nigeria are threatened by the continuous misapplication of the money from the Special Fund Accounts to unrelated purposes. Loans granted from the accounts have not been paid back several years after such loans were granted.”

It also added that there were no regular reconciliation between the Accountant-General of the Federation and the Central Bank of Nigeria.

The Senate, however, resolved that the committee would need to return to determine the actual beneficiaries of the loans that had not been paid back to the accounts as well as determine the details of what was outstanding.

President of the Senate, David Mark, said, “I think our problem here is how these funds have been utilised, but like Victor Ndoma-Egba rightly pointed out, I was going to ask if we have any guidelines at all on the Special Fund Accounts or is it just at the discretion of the President of the federation?

“The problem we have with these funds is that, apart from not having guidelines for them or any Act guiding the disbursements and the utilisation, we also, at the various committees or the committee responsible, are not taking enough pain, we just take it for granted that these funds exist and we can use them in any way and manner that whoever operating it decides.

“I think that is truly an indictment on the National Assembly. You brought this up now; this is a wakeup call for the National Assembly to its work properly because if we have been following this …it started in 2002. Since the Presidential order came into effect on the accounts, we have never really bothered about it.

“I think that overall, we share in the blame – both the legislature and the executive – in these disbursements and my contribution at this point will be that the committee should go back and look at those who have paid back and those who have not paid back their loans. The report has not stated that. Those who have taken loans should be asked to pay back. All of us are displeased with what has happened here.”

The Deputy President of the Senate, Ike Ekweremadu, said in an event where the money was not recovered, the Senate should invite the Economic and Financial Crimes Commission and Independent Corrupt Practices and other related Offences Commission to wade into the matter, as failure to do so would be interpreted by the public as the National Assembly abdicating its responsibilities.

He said, “Section 8(82) of the Constitution states that no money shall be withdrawn from the Consolidated Revenue Fund of the Federation except to meet expenditure. In this situation, we have seen where money meant for the Ecological Fund is being used to develop airports, to build malls and to build abattoir.

“So, that is the crux of the matter. Most of them, according to the report of the committee, indeed all of them, have not been recovered.

“I will like to ask this committee whether it made contacts with the beneficiaries of these loans just to hear their own side to be sure that these loans were not repaid. Because if they were repaid, it becomes another kettle of fish what became of the money.”

The Deputy Majority Leader, Senator Abdul Ningi, who is also the Deputy Chairman of the Committee on Public Accounts, said, “This is sheer crass executive recklessness and the National Assembly is indifferent to it. We must not under any guise sweep away these findings. Going forward, this chamber must have to add a committee to make sure that the loans, which were collected, are refunded, and where there is a breach, people must be brought to book by being prosecuted.

“This impunity is ongoing; it has not stopped because even in 2011, we could see the impunity by the coordinating minister. That means the trend continues.”

A bill is already before the Senate seeking to make provisions for the administration of the accounts, it has passed first reading.

 

 

[Punch]

One Comment

  1. Nura

    May 1, 2013 at 11:30 pm

    What next?