The House of Representatives on Monday uncovered a N7.935bn discrepancy in the remittance of revenue generated by the Nigeria Customs Service to the Federation Account in 2007. A report of the House Committee on Public Accounts indicated that Customs generated and remitted N233.430bn to the Federation Account during the year, but found out that only N241.366bn was released to the Federation Accounts Allocation Committee for sharing between the three tiers of government.
This left a difference of N7.9bn, which the committee said was not accounted for. The committee queried the Central Bank of Nigeria, the NCS and the Federal Inland Revenue Service about the development. It directed them to explain what led to the discrepancy. The Chairman of the committee, Mr. Solomon Olamilekan, gave the directive in Abuja during a meeting with officials of the three agencies. They were asked to either reconcile the discrepancy or report back to the House on Wednesday (tomorrow) what happened to the N7.9bn.
According to an audit investigation conducted into the operations of the Federation Account, the committee noted that while the NSC claimed that it remitted the N2334.430bn, records at the CBN indicated that only N241.366bn was made available to FAAC. “This implies that the actual amount of revenue generated and remitted by the NCS was less than the amount presented to FAAC for sharing as indicated by the CBN”, Olamilekan stated.
The committee immediately set up a sub-committee headed by one of its members, Mr. Pally Iriase, to liaise with the Acting Chairman of the FIRS, Alhaji Mashi, the Deputy Governor (Operations) of the CBN, Mr. Tunde Lemo, and the Accountant-General of the Federation, Mr. Jonah Otunla, to find answers to the discrepancy. The committee also found out that in another case, N14.210bn generated as import duty was not remitted to the Federation Account for five months. Rather, it was paid into the CBN’s Port Harcourt account by the Port Harcourt Customs Area Command.
The committee noted that while the money was generated in August 2006, it was not until January 2007 that it was transfered to the Federation Account. While Mashi informed the committee that the CBN and FIRS had tried to do some reconciliation of figures over time, Lemo observed that some of the issues were not exactly the fault of the CBN.
However, both officials could not convince the committee. Among others, a sub-head captured in the records showed that the Nigerian Governors’ Forum was paid N450m for its secretariat project from the Federation Account in 2007. Furthermore, the committee pointed out what it termed “other irregular deductions” from crude oil sales and other revenue windows in 2007. For example, it pointed out Joint Venture Cash Calls of N549bn and Excess Crude money of N1.168tn were deducted without justifiable reasons from the Federation Account.
In the same vein, it said petroleum product subsidy of N236.641bn was deducted from crude oil sales. The apex bank was also queried for allegedly deducting another N124.673bn from the Federation Account under a sub-head it called “Funding of FAAC.” The committee expressed surprise that the details of such an expenditure were not captured in the books by the bank. There were another payments of N210m and N13.341m in March and April 2007 respectively under the name of “contractual obligations of states”, where Anambra State in particular benefitted in 2007. The committee resolved that this particular payment was a breach of the 1999 Constitution.
It added, “The payment is contrary to the provisions of Sections 162 (1), 162(3) and 120(3&4) of the Constitution of the Federal Republic of Nigeria, 1999( As amended). “The Accountant-General of the Federation has been informed of these irregular payments from the Federation Account and he was advised to ensure that henceforth payment of contractual obligations from the Federation Account should cease.”
On the governors’ forum project, a report of the office of the Auditor-General of the Federation considered by the committee, stated, “Another case of irregular payment from the Federation Account was the sum of N540m paid for the governors’ forum secretariat project and upkeep of the Federation Account secretariat.”