The Office of the Accountant General of the Federation (OAGF) has said that the Central Bank of Nigeria (CBN) misappropriated the interest it charged on the Ways and Means Advances of over N4.4 trillion granted to the government.

The OAGF said the apex bank treated the Ways and Means Advances as if it was a facility from local and foreign lenders and should therefore be asked to refund the over N2.7 trillion to the federal government.

The position of the Accountant General is contained in its response to a query from the Office of the Auditor General for the Federation on the consolidated financial statement of the federal government for the year ended 31st December, 2021 submitted to the National Assembly by the Auditor General, Shaakaar Chira with reference number AuGF/AR.2021/01 and dated 31st July, 2024.

The Auditor General for the Federation had said in the 2021 audit report that ?the Consolidated Revenue Fund (CRF) and four (4) other Ministries Departments and Agencies (MDAs) had overdrawn bank balances amounting to N17.106 trillion without evidence of approval by relevant authorities to support the overdrawn bank accounts.

Responding to the issue which form part of the 50 audit queries, the Accountant General said ?the CRF negative balance of N17,105,111,709,523.00 as at 31st December, 2021 included actual Ways and Means advance of N4.4 trillion taken by Government and interest charged on it for the sole use of CBN as though the Ways and Means was a loan from CBN funds or from any syndicated group of lenders

?The interest charged on Ways and Means by CBN was misappropriated by CBN for its sole use whereas the Actual Ways and Means was not a facility from its funds or balance sheet nor was it a syndicated facility from a group of local and foreign lenders. CBN must therefore refund to the Federal Government of Nigeria the interest of N2.73 trillion it cornered for its sole use as of 31st December 2021?.

The OAGF also said while ongoing securitisation by DMO to reconciled domestic debt service, ways and means actual withdrawal, re-imbursement of Paris Club over deduction, states deferred loans deductions and CPV coupon payments is okay, the interest on ways and means should not be securitised, but refunded to the CRF by CBN.

It also said that additional interest accrued on the ways and means advances cornered by the CBN after the issuance of the CRF Bank Statement as at 31st December 2021 must equally be refunded by CBN.

While insisting on its finding, the OAuGF said ?there was no evidence such as approvals and supporting documents to support the overdrawn account. The Cash advance of N4.4 trillion taken by Government as Ways and Means, interest charged on it and other loan related drawings from the Consolidated Revenue Funds (CRF) and the negative cash balances from the other MDAs should be approved, appropriately recognized as liabilities and the sources properly disclosed?.

Also, the Audit report said that as at 31st December, 2021, total external and domestic debt of the 36-state governments stood at over N6.840 trillion, adding however that there was no contingent liability relating to borrowings by the 36 State Governments guaranteed by the Federal Government of Nigeria was not disclosed in the FGN CFS.

The Audit report said ?the Debt Management Office (DMO)?s report on States? Domestic and External Debts showed that the 36 State Governments? indebtedness stood at over N6.840 trillion?.

?The figure is made up of Domestic Debts of over N4.870 trillion and External Debts of over N1.970 trillion? with the External Debt component of the total Debt being guaranteed by the Federal Government of Nigeria, implying that FGN would be held responsible if the States failed to honour their debt obligations which constitute contingent liability to the FGN?.

In addition, the Auditor General said that while reviewing the over head cost to the FGN consolidated financial statement, it was discovered that 235 MDAs exceeded their Overhead budget by over N116.350 billion, saying that total expenditure disclosed for the affected MDAs was N158,384,274,551.00, while their budget for the period under review was N42,034,056,219.00.

It said that the source of the extra spending by the MDAs were not disclosed neither was there evidence of supplementary appropriation or approved virement by the National Assembly as requured by law, attributing it to weaknesses in the internal control system surrounding the consolidation process at the Office of the Accountant General of the federation.

It also said that about N31.205 trillion was recognized as Long Term Borrowings in the Consolidated Statement of Financial Position of the government, while the current portion of long-term borrowings that were due for repayment within twelve months after the reporting date was not recognized in the Consolidated Statement of Financial Position under the Current Liabilities.

The report also said that 16 MDAs reported zero overhead expenditure despite having a total budget of N1,473,317,709.00, saying ?no additional information was disclosed to enable users to understand how the MDAs operated without overhead costs?, in addition to 11 other MDAs incurring overhead expenditure of N841,787,875.00 without evidence of an approved budget, supplementary appropriation or virement.

According to the report, 8 selected MDAs exceeded the budget for their Personnel Cost by N9,475,226,780.90, saying ?the personnel expenditure incurred by the 8 MDAs amounted to N63,753,429,332.90, while the total budget was N54 ,278,202,552.00 hence the extra budgetary expenditure with no evidence of an approved budget, supplementary appropriation or virement.

It also said that about 44 agencies of government spent about N92,678,924,613.32 on Employees Benefits without appropriation with National Pension Commission accounting for N56,972,052,733.66 representing 61%, without evidence of an approved budget, supplementary appropriation or virement.

The OAuGF also reported that 110 Ministries, Departments and Agencies (MDAs), had nil balances of Property, Plant, and Equipment (PPE) in the FGN CFS for 2021 without justification for presenting nil balances of PPE, adding that the Accountant General?s excuse was that most of the agencies are not fully self-Accounting while Federal pay offices assets belonged to Office of the Accountant General.

He also said that the Agencies under the Ministry of Health such as PHS, ONCHO are equipped by the Ministry of Health, while the Foreign Missions will be contacted to make a report of their legacy Assets for inclusion in the Accounts.

The report also said that N1.985 trillion was recognized as Intangible Assets to the FGN CFS with no disclosure of the classes of Intangible Assets to ascertain the assets with finite or infinite life, a basis for determining whether amortization should be charged or not.

But the Accountant General?s office disagree with the report saying ?this is the items classified as Intangible Assets. From this listing, hardly can any of them be classified as required by the audit observation? Therefore, the treasury has classified every item here as research and development pending when a proper meeting shall be conveyed between the Ministry of Finance/Budget Office/Office of the Accountant-General and Auditor-General Office to reclassify items under ?Other Capital Projects?

It also report that ?there was an offset of debit balance of N1.380 trillion against a credit balance of N13.791trillion in Note 28 (Cash and Cash Equivalent) to the FGN CFS, and the offset above, resulted in the net overdrawn balance of N12.410 trillion.

It also said that while about N1.105 trillion was recognized as repayment of borrowing under cash flow from financing activities in the Consolidated Cash Flow Statement, while the sum of N896.008 billion was the total repayment of borrowing disclosed in the financial records leading to a difference of N209.120 billion. (The Nation: Text, Excluding Headline)

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