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FG issues guidelines to MDAs on budgeting, revenue, expenditure

By on December 13, 2015

In a move designed to rein in more revenue and control spending in Ministries, Departments and Agencies (MDAs), the Federal Government has issued a circular on guidelines vis-a-vis budgeting, revenue and expenditure.
The move is aimed at ensuring that MDAs remit revenue and generate operating surpluses which, by law, should be credited to the Consolidated Revenue Fund (CRF).

The Minister of Finance, Mrs. Kemi Adeosun explained in a statement last night that the circular was aimed at compelling boards and agencies, which currently operate outside of budgetary control to comply with the law.
Section 22(2) of the Fiscal Responsibility Act (FRA) lists agencies such as the Nigerian Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency (NIMASA), National Agency for Foods and Drugs Administration and Control (NAFDAC), Joint Admission and Matriculation Board (JAMB), Nigerian Television Authority (NTA), Nigerian Communication Commission (NCC), Corporate Affairs Commission (CAC), and National Examinations Council (NECO) as those which should remit 80 per cent of their operating surplus into the CRF.

According to the statement, which was signed by the Director (Press), Ministry of Finance, Mr. Marshall Gundu, the minister disclosed that records showed very poor compliance with the provisions of the Fiscal Responsibility Act.
“Some agencies have never credited the Consolidated Revenue Fund despite having salary, capital and overhead financed by the Federal Government. Indeed, cost to income rates of 99.8% have been the average, meaning that they spend all their internally generated revenue and subventions released to them.
“The minister said such practices are not sustainable in any economic climate and with the current serious economic challenges being faced by Nigeria, can no longer be tolerated. Accordingly, all revenue generating agencies must comply with the circular and cut their costs,” the statement said.
In the circular sent to the MDAs, the minister said revenues generated by all of them must be reported on a gross basis prior to any deductions.

All self-funded federal agencies are also to limit their annual expenditures from their internally generated revenues to not more than 75 per cent of their total gross revenue, while fully funded agencies are to remit all their internally generated revenue (IGR) to the CRF.
The circular said henceforth, 80 per cent of the resulting operating surplus by MDAs should be remitted into the CRF on a quarterly basis, in accordance with the Fiscal Responsibility Act.

The statement said in order to ensure continual monitoring, all MDAs funded through the annual budget must submit monthly Expenditure Transcripts and Revenue Returns, to the Office of the Accountant-General of the Federation (OAGF), while agencies not funded through the annual Federal Government budget are to prepare and submit quarterly Management Accounts including Revenue Returns to the OAGF.

The minister reminded all MDAs that in line with Financial Regulations (FR) 107, the Accountant-General of the Federation shall carry out routine revenue monitoring and inspection visits to them to verify compliance with the new guidelines.
The circular said any Accounting Officer/Chief Executive Officer of MDAs that defaults in remitting revenues as appropriate and as when due shall be sanctioned accordingly and the renewal of the tenure of appointment of Accounting Officers/Chief Executive Officers shall be tied to their compliance with the content the new guidelines.

 

[ThisDay]