The Federal Government, yesterday, ordered the auditing of all revenue generating agencies in the country with a view to ensuring fiscal discipline and transparency in the system.
The Minister of Finance, Mrs. Kemi Adeosun, who briefed State House correspondents shortly after the first Federal Executive Council (FEC) meeting in the year chaired by President Muhammadu Buhari, said the move is to ensure that all funds being generated are remitted into government coffers so that the internally generated revenue (IGR), which government is banking on to finance the budget, becomes a reality.
She also said those agencies have been mandated to present their budgets for approvals.
Adeosun, who briefed newsmen in company of her Information and National Orientation counterpart, Alhaji Lai Mohammed, stressed that the initiative would help to plug all loopholes in the system.
“The principal discussion in our meeting today was the initiative by this administration to plug revenue leakages in our MDAs that generate revenue. The presentation to FEC was to remind ministers who supervise these revenue-generating boards of their responsibilities under the Fiscal Responsibility Act (FRA).
“Let me remind you that under FRA, these boards and corporations who generate our revenue are supposed to generate and operate surplus, 80 per cent of which is to be credited to the Consolidated Revenue Fund. But we have discovered that many agencies have never credited anything and never generated any operating surplus, including some whose salaries, overheads, capital is paid by the Federal Government.
“Then, in addition to that, they generate revenue which they spend without any form of control. So, one of the big initiatives and changes of this administration is to bring all those agencies into line; to insist that they must submit a budget, that that budget must be subject to approval and they must operate within that budget so that the surplus that is meant to come to the Federal Government can be seen to be used as appropriate,” she explained.
She noted that the revenue generating MDAs, in a non-oil economy, are the source of revenues of government.
On the order for those agencies, including NNPC, NIMASA and several others, to submit their budgets for approval, the minister said a circular has already been issued to the effect.
“We had issued a circular in December requesting that they send us their budget and what we discussed today was the responsibility of the ministers to ensure that whether those agencies have boards or not, those budgets are prepared, that the Ministry of Finance is going to sit down with the supervising ministers and with the boards concerned, where necessary, to go through their budgets and make sure that they are reasonable, that the costs are not inflated.
“We also discussed that in some cases, because some agencies have a track record and history of making sure that every naira they earned is spent, that we will go in and audit agencies under Section 107 (8) of the Financial Regulations. The Accountant-General, who is under the Ministry of Finance, has the powers to go in and make inquiries about how public money is spent. So, we will be sending in auditors to some agencies where we believe that their cost is simply excessive and not keeping with our expectations.
“The expected outcome of this is that there will be that internally generated revenue (IGR) which new budget is banking on will actually become a reality,” she said.
On the alleged withdrawal of the 2016 Budget presented to the National Assembly by the President for adjustment following public outcry against some subheads considered bogus, Adeosun denied the report, insisting that the budget is not going to be replaced.
“You know the budget is presented to the NASS and then there is what we call an interactive budget approval process and you know the agencies will still go and defend their budget at the NASS. So, ordinarily, in budget processes anywhere in the world, there can be amendments to the budgets arising from that interactive process, which is normal.
“But let me make it very clear. The budget is not being withdrawn or replaced. The budget has been presented and will go through normal process whereby MDAs defend their budgets. It is possible in the process of that, because as you know the legislature is not a rubber stamp, their job is to scrutinise the budget and to approve that budget. So, there may be some changes that occur as a result of that interactive process, but that process is normal everywhere in the world where a budget is presented. So, I think it is important to make that clarification,” she said.
The minister also dismissed the insinuation that the budget could be padded by the lawmakers, insisting that such was impossible considering the parlous financial position of the country.
On some agencies collecting revenues in foreign currencies and remitting same into government coffers in naira, Adeosun said: “We have done a comprehensive audit of all the agencies that actually collect money in foreign currency and remit in naira. The requirement is that such monies should go to CBN, which should exchange the money into naira.
“What we discovered in some agencies, we have stopped it; but we are now doing an audit to identify other agencies. But we have identified that the agency concerned was NIMASA; but we discovered that there are other agencies we have not identified, who also collect funds in foreign currencies, including our foreign missions. So, we are doing a full audit of all those accounts and to ensure that all those revenues now are converted in accordance with the extant procedures and guidelines.”
She disclosed that those heads of agencies found culpable after the ongoing audit would be dealt with appropriately.