Following a forensic audit of 15 government-owned companies that revealed that N8.1 trillion was not remitted into the Federation Account between 2010 and 2015, the Nigerian government has announced new measures to ensure that all revenue accrued to the government from these enterprises are effectively collected.
Earlier this year a forensic report by auditing firm, KPMG, showed that the Government Owned Enterprises (GOEs) as they are officially known did not remit N8.1 trillion within a period of five years, which the Minister of Information, Lai Mohammed, in May, said was equivalent to the country’s yearly national budget.
Now the government has moved to plug the income leakages from its revenue-generating agencies. A circular from the office of the Secretary to the Government of the Federation dated October 16 obtained by PREMIUM TIMES has come up with new measures to ensure that all funds generated by these companies are correctly and efficiently swept in the Federation Account.
The new measures were also aimed at making the companies more efficient, reduce wastage and eradicate corruption.
The circular stipulated a re-categorisation of the GOEs into self-funded, partially funded or fully funded, as is the practice in other countries in the world, to optimise their contributions towards funding the federal budget.
“Government has noted also that most GOEs remit less operating surpluses to the Consolidated Revenue Fund (CRF) than is required by law and/or financial regulations, thereby imposing avoidable restrictions on government’s ability to implement its developmental agenda,” the circular reads.
Henceforth, the performance contracts of the chief executive officers (CEOs) and other top management staff of these enterprises will include financial indicators and targets.
Also, the office of the Accountant General of the Federation will be required to regularly monitor the revenue and expenditure performance of all GOEs and ensure that they are published monthly.
There shall also be a quarterly Budget performance review of the GOEs by the budget office.
The circular stated that the government will now strictly enforce the peg of expenses, “frequency of board meetings, overseas travels” as well as cut “other potentially wasteful practices.”
The circular also reiterated that it is mandatory for all GOEs to use the Treasury Single Account (TSA) for all financial transactions. According to the circular, remittances are now be collected quarterly instead of annually as was the practice.
Other measures stipulated in the circular include:
“Accounts of all GOEs shall henceforth be audited within 4(four) months after the end of each financial year;
“the computation of the operating surplus shall be reviewed to allow the deduction from the agency’s revenues of only operational expenses, wholly, reasonably and necessarily incurred in its operations;
“annual budgets of GOEs shall be presented to the Budget Office of the Federation for review, further to which they will be submitted to the National Assembly by Mr. President along with the national budget. GOEs shall no longer send their budgets directly to the National Assembly;
“consideration and passage of budgets of GOEs shall going forward, be scheduled alongside the main budget of the Federal Government; and
“agencies with capacities to be self-funding shall be categorised and removed from the National Budget. “
According to the circular, revenue departments to be manned by “Professional Treasury Officers from the Office of the Accountant-General of the Federation” would be created within the GOEs.
The Secretary to the Government of the Federation, Boss Mustapha, who signed the circular, said incentives will be included within these measures to encourage compliance. He also said the government will undertake legislative actions to amend sections of the acts establishing some GOEs to accommodate the newly announced procedures.
Some of the GOEs affected by these newly announced revenue-collecting measures are the Nigeria Social Insurance Trust Fund (NSITF), Nigerian Coal Corporation (NCC), Nigerian National Petroleum Corporation (NNPC), Nigeria Electricity Regulatory Commission (NERC), Nigeria Deposit Insurance Corporation (NDIC), Nigerian Television Authority (NTA), Federal Radio Corporation of Nigeria (FRCN), Voice of Nigeria (VON), and National Communication Commission (NCC).