Governors have come under more pressure over how they spend security votes.

The Federal Government has barred state and local governments from operating security votes with commercial banks.

Any governor who desires to deploy their security votes in cash must open a special account with the Central Bank of Nigeria (CBN) specifically for that purpose.

These measures are to keep the two tiers under close watch on their use of cash.

They are in line with the January directive of the Nigeria Financial Intelligence Unit (NFIU) halting the withdrawal of cash from public accounts with effect from March 1.

The Federal Government later granted state and local governments a reprieve to operate only their security votes in cash till May 29.

A source at the Presidency told The Nation: “Regarding the security vote issue, they have found harmony, they have all agreed that they will maintain security votes in cash until May 29 this year.

“But they are not going to use commercial banks to withdraw money for security votes.

“All state and local governments will open specific accounts with the CBN just for security vote.

“In that way, of course, it will be monitored.”

It was gathered that the governors remain opposed to the idea Federal agencies supervising how they spend funds accruing to states which are sub national governments.

Another source added that the governors might sue the Federal Government on the issue.

The new plan was announced at last Tuesday’s meeting between Federal agencies —the NFIU, the CBN, the Economic and Financial Crimes Commission (EFCC), the Independent Corrupt Practices Commission (ICPC)— and governors. The meeting was virtual.

The Presidency official said there were a lot of negotiations and pleas from the governors for the extension of the cash withdrawal deadline.

The Federal Government and the NFIU had initially agreed to grant the states until April 15 to withdraw cash only for security votes use, but the state governors prevailed on the NFIU, CBN and EFCC for the May 29 extension.

The implication of the agreement is that the ban on cash withdrawal from all public accounts by state and local governments will apply to the incoming governors.

The NFIU claims that the intention of the new arrangement is to stop the withdrawal of cash from public accounts to curb likely money laundering, terrorism financing and other untoward activities.

It was also meant to ensure that all transactions, including payments and transfers, are done electronically through banks, in line with global best practices.

The directive applies to all public entities, including federal, state and local governments, as well as all their agencies and parastatals.

The NFIU has warned that any violation of the directive will result in severe sanctions and penalties, including fines and imprisonment of up to seven years.

Governors who go against this directive will be investigated but not prosecuted immediately because of the immunity they enjoy.

The agency has also advised all public officials to comply with the directive and to ensure that all accounts are linked to the Bank Verification Number (BVN) of the authorised signatories. (The Nation)

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