Auditor-General Report Uncovers Over N4.6billion Unapproved Spending In Ministry Of Works Under Ex-Minister Fashola

An annual audit report by the Office of the Auditor-General of the Federation (OAuGF) has uncovered over N4.64 billion unapproved spending in the Federal Ministry of Works and Housing, currently headed by former Governor of Ebonyi, Dave Umahi as the Minister. 

The annual report which reportedly covered activities between 2020 and 2021 and revealed significant lapses in internal controls under the former Minister of Works, Babatunde Fashola

According to the report, the financial irregularities include payments made without proper documentation, extra-budgetary expenditures, mobilization fees exceeding approved thresholds, and contracts awarded without following due process.

The report stated that a sum of N1.08bn was paid from the Government Integrated Financial Management Information System account without the requisite payment vouchers, violating Paragraph 601 of the Financial Regulations, 2009.

Similarly, N546million was transferred to project accounts without adequate documentation or budgetary provision.

The report noted that the financial irregularities were caused by weak internal control mechanisms in the Ministry and warned of risks such as fund misappropriation and loss.

The audit report recommended that the Permanent Secretary of the Ministry to justify the payments, recover the funds, and remit them to the Nigerian government’s appropriate account.

It further recommended that evidence of compliance should be submitted to the National Assembly’s Public Accounts Committees, failing which sanctions under Paragraph 3106 of the Financial Regulations should apply.

The report also uncovered extra-budgetary expenditures to the tune of N2.89 billion, including N1.88 billion spent without legislative appropriation.

The report further stated that over N1 billion was paid to contractors for road projects in Katsina State, which were only included in the 2017 Fiscal Appropriation Act.

According to the audit report, the expenditures violated Section 80(4) of the 1999 Constitution, which mandates legislative approval for all withdrawals from public funds.

The PUNCH quoted the audit report as stating, “The sum of N1,883,795,670.51 (One billion, eight hundred and eighty-three million, seven hundred and ninety-five thousand, six hundred and seventy naira, fifty-one kobo) was expended by the Ministry without evidence of appropriation.

“The sum of N1,003,039,708.79 (One billion, three million, thirty-nine thousand, seven hundred and eight naira, seventy-nine kobo) was paid to four contractors for the construction of roads in Daura, Katsina State. 

“The project was budgeted for in the 2017 Appropriation Act, andApproval for the extra-budgetary expenditures in (i) and (ii) above, totalling N2,886,835,379.30 (Two billion, eight hundred and eighty-six million, eight hundred and thirty-five thousand, three hundred and seventy-nine naira, thirty kobo) by the National Assembly was not presented for audit.

“The above anomalies could be attributed to weaknesses in the internal control system at the Federal Ministry of Works (Housing Sector).”

The report recommended the recovery of the unauthorised funds and sanctions for people responsible for the financial irregularities in accordance with the provisions of relevant financial laws in the country.

Furthermore, the report revealed that there were contracts worth N493.97 million which were awarded to companies not registered with the Corporate Affairs Commission (CAC).

The report stated that out of the N493.97, N170.36 million was paid to unregistered entities, and a company awarded a contract in 2016 was only registered in 2019, contravening the Public Procurement Act, 2007, and the Companies and Allied Matters Act, 2020.

According to the audit report, “Payment for Contracts totalling N493,967,484.24 (Four hundred and ninety-three million, nine hundred and sixty-seven thousand, four hundred and eighty-four naira, twenty-four kobo) were made to non-existing companies.

“The sum of N5,825,989.28 (Five million, eight hundred and twenty-five thousand, nine hundred and eighty-nine naira, twenty-eight kobo) was paid to a contractor vide payment voucher with Ref. No PROC/PBHD/CAP1345/2020 dated 30th December, 2020, out of the total contract sum of N493,967,484.24 without the company being incorporated.

“Three contractors were paid a total of N170,355,961.05 without evidence of incorporation with the Corporate Affairs Commission (CAC).

“A company that was awarded a contract on the 25th of November, 2016 was incorporated with CAC on the 16th of August, 2019.

“The above anomalies could be attributed to weaknesses in the internal control system at the Federal Ministry of Works (Housing Sector).”

The Auditor-General asked the Works Ministry to recover the funds, ensure remittance to the Treasury, and implement sanctions against officials involved in the irregular awards.

It further noted that in Oyo State, the ministry paid N110.81 million, representing 22.61 percent of a total contract sum, as mobilisation fees for a project, exceeding the 15 per cent limit prescribed by Paragraph 2933 of the Financial Regulations.

It stated that the contract was also irregularly awarded on a Sunday, which raised questions about the ministry’s adherence to procurement laws.

It therefore called for the recovery of the excess payment and recommended strict sanctions for gross misconduct under Paragraph 3129 of the Financial Regulations.

Additionally, the report stated that a contract amounting to N46.31 million for classroom construction in Edo State was awarded without due adherence to procurement laws.

According to the report, the sum of N40.83 million, representing 88.18 percent of the contract sum, was paid to the contractor, which exceeded mobilization thresholds.

It also stated that five contracts worth N27.84 million were awarded without obtaining bids from at least three unrelated contractors, as required under Section 24(1) of the Public Procurement Act, 2007.

The report said that the ministry failed to present essential documents, including advertisements, tender evaluations, and meeting minutes, stressing the need for urgent reforms to prevent further financial mismanagement in the country.