An audit report has revealed financial irregularities amounting to over N4.64 billion in the Federal Ministry of Works’ Housing Sector, raising concerns about widespread non-compliance with financial regulations and procurement laws.
The findings, covering the period from 2020 to 2021, show significant weaknesses in internal controls during Babatunde Fashola’s tenure as Minister of Works and Housing.
The report outlines several issues, such as payments made without proper documentation, excess expenditures, mobilisation fees exceeding approved limits, and contracts awarded without following the proper procedures.
Additionally, N1.08 billion was paid from the Government Integrated Financial Management Information System account without the required payment vouchers, violating Paragraph 601 of the Financial Regulations, 2009.
Also, N546m was transferred to project accounts without adequate documentation or budgetary provision.
The Auditor-General’s report attributed these anomalies to weak internal control mechanisms in the Ministry and warned of risks such as fund misappropriation and loss.
Despite queries, the ministry failed to respond to these issues.
The Auditor-General recommended that the Permanent Secretary provide justification for the payments, recover the funds, and return them to the Treasury.
Additionally, the report suggested that evidence of compliance be submitted to the Public Accounts Committees of the National Assembly.
Failure to do so would result in sanctions under Paragraph 3106 of the Financial Regulations.
The audit unearthed extra-budgetary expenditures amounting to N2.89bn, including N1.88bn spent without legislative appropriation.
Also, over N1bn was paid to contractors for road projects in Katsina State, which were only included in the 2017 Appropriation Act.
These expenditures contravene Section 80(4) of the 1999 Constitution, which mandates legislative approval for all withdrawals from public funds.
These expenditures violate Section 80(4) of the 1999 Constitution, which requires legislative approval for all withdrawals from public funds.
The audit report states that the Ministry spent 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) 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, and.
“Approval 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 lack of adherence to financial accountability standards raises concerns about the potential diversion of public funds.
No response was provided by the Ministry to clarify these expenditures.
The report called for the recovery of the unauthorised funds and recommended sanctions for those responsible under relevant financial regulations.
The report also uncovered that contracts totaling N493.97 million were awarded to companies not registered with the Corporate Affairs Commission.
Of this amount, N170.36 million was paid to unregistered entities, and a company awarded a contract in 2016 was only registered in 2019, violating the Public Procurement Act, 2007, and the Companies and Allied Matters Act, 2020.
The audit report noted, “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).”
