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NAFDAC yet to remit N1.44bn operating surplus – FRC

By BusinessNews Staff on July 18, 2014

The National Agency for Food and Drug Administration and Control has yet to pay operating surpluses amounting to N1.44bn to the Federation Account, the Fiscal Responsibility Commission has said.

The Chairman, FRC, Chief Victor Muruako, said this at a meeting between the two government agencies in Abuja on Wednesday.

Statistics provided by the FRC at the meeting showed that out of operating surpluses of N1.96bn generated by NAFDAC between 2007 and 2009, the agency paid only N516.22m, leaving a gap of N1.44bn.

Details showed that the agency had a surplus due of N491.25m in 2007, while it paid N64.05m, leaving a balance of N427.2m.

In 2008, the operating due surplus amounted to N857.13m and it paid N93.56m, leaving a gap of N763.57m; while in 2009, its due surplus amounted to N607.68m but paid N105m, leaving a balance of N502.68m. In 2010 and 2011, NAFDAC’s operating surplus was in the negative.

The Fiscal Responsibility Act, 2007 requires government agencies to return 80 per cent of their operating surpluses to the Consolidated Revenue Account of the Federal Government.

Murako also raised other issues in the accounts submitted by NAFDAC.

He said, “There are unusual increases in the cost of maintenance declared in the 2010 audited accounts. Building increased from N93.66m to N315.64m, or 2,237 per cent, and other equipment from N58.99m to N203.49m, or 244.9 per cent, during the period.

“Professional/consultancy fees also exhibit an unusual increase from N36.4m to N193.8m or 432.4 per cent during the same period.

“The financial statement shows remittance of operating surplus of N90m. It is not clear if the amount is for earlier years because the result for 2010 shows deficit. If it is for earlier years, then, it should not be charged to current income. This needs clarifications.

“There is need to promptly remit arrears of operating surpluses to the tune of N1.44bn owed by the agency for the years ended 2007 to 2009.”

The FRC had in a letter to NAFDAC also noted some observations in its accounts that needed explanation.

The commission said, “Under investment of the agency in the 2010 accounts, there is N50m with Fortune Bank Plc, which is carried from year to year. The commission demands for plausible explanation with proof of what has become of the fund since; as it stands now, there is no such entity as Fortune Bank Plc.

“Under Note 12 in the 2010 accounts, N700m was ascribed to ‘Loan to NAFDAC’. This implies that the agency owes itself. This portends serious financial irregularity, which needs clarification.

“Over 74 per cent of amounts owed, totalling N615m, are not explained even in the notes to the accounts 2010. A clear explanation backed by documentary evidence should be given.

“The revenue generated by the agency over the years is all spent on operations despite the budgetary allocations for staff salaries, etc. The agency is reminded that the constant declaration of deficit is a reflection of inefficiency and level of competence of the managers.”

[Punch]

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