N10bn Payment to Local Contractors in 2017 Budget – AGF
The attention of the Accountant General of the Federation (AGF), Mr. Ahmed Idris, has been drawn to some misleading and false publications by the Premium Times and Saharareporters which alleged extra-budgetary spending over the release of N10 billion for contractors’ liabilities.
The Office of the AGF wishes to disclaim the malicious reports as there was no extra-budgetary spending over the release of the funds for contractors’ liabilities.
The Office of the AGF had in recent times observed that the Premium Times has formed the habit of distorting and concocting allegations against the Federal Government, the Federal Ministry of Finance and OAGF in a bid to achieve a hidden agenda despite all efforts made to set the record straight before representatives of Premium Times and also present documents to support the transparency and accountability in the release of funds to the Ministries, Departments and Agencies (MDAs) and institutions of Government.
Mr. Idris clarified that the alleged N10 billion was duly appropriated for under the Service Wide Vote.
He said, “The payment of the sum of N10 billion for local contractors’ liabilities was not outside the budget, and its release followed laid down extant financial regulations. This money was appropriated for in the Service Wide Vote.
“In fact, the sum of N20 billion was provided for local contractors’ liabilities under the 2017 Appropriation for all Ministries, Departments and Agencies (MDAs) and institutions of Government, including the Independent National Electoral Commission, National Assembly, Judiciary and other statutory bodies.”
He explained further that the procedure for application of the funds was that the money had to pass through the agencies and institutions of Government which awarded the contracts.
“In the past, payments were directly made to contractors but this created a lot of reconciliation problems. The procedure was however changed in 2017 for accountability purposes.
“The funds now pass through originating MDAs and Institutions of Government with returns in respect of the Authority to Incur Expenditure (AIE) required to be forwarded to the Director, Cash Management Department and should include a list of and supported by copies of all payment vouchers which have been authorized,” Idris further expatiated.”
As part of the procedure, the AGF stated that the MDAs and Institutions of Government were required to prepare vouchers, put in place internal audits, verify work done by the contractors, and deduct relevant taxes.
He added that the present Administration has, since coming on board implemented a number of fiscal policies aimed at strengthening financial control, improving transparency and accountability in the management of public funds.
Speaking further, the AGF maintained that the present administration led by President Muhammed Buhari has remained committed to boosting the capacity of local contractors by clearing outstanding liabilities and providing level playing ground for them to compete.
“Such payment of local contractors’ debts therefore, is critical in achieving the positive outcomes such as revamping the economy, sustaining the country’s economic growth, and creating more jobs and wealth,” he added.
On the implementation of the Budget, Idris said the Finance Control and Management Act of 1958 places the responsibility on the Minister of Finance.
“Once the Budget has been passed by the National Assembly and assented to by Mr. President, the implementation rests with the Minister of Finance. For the release of any fund, it must have been provided for in the Budget,” he stated
The Treasury Boss also revealed that the sum of N2.7 trillion has been proposed in 2018 for the National Assembly’s approval in line with the Government’s desire to pay the local contractors’ liabilities.
The money is for payment of inherited obligations.
The N2.7 trillion, he added, would be raised through bonds to meet the outstanding obligations to local contractors in 2018.