The Auditor-General of the Federation has revealed that the Corporate Affairs Commission (CAC) spent N118.75 million in 2022 without proper documentation, raising questions about the agency’s financial controls and management of public funds.

According to Premium Times reports, CAC explained that part of the money was paid to federal lawmakers for oversight visits to its offices across the country.

The Auditor-General rejected this, stating that the lack of supporting documents violated Nigeria’s financial regulations.

The findings are contained in an 808-page audit report covering January to December 2022, which was submitted to the National Assembly in September.

The report shows breaches of financial regulations, weak accountability mechanisms, and unexplained expenditures processed under questionable circumstances

The audit found that CAC processed payment vouchers totaling N118,752,826 without invoices, purchase orders, memos, or other required documentation under the Financial Regulations (2009).

Paragraph 603(i) mandates full documentation for each payment, while paragraph 415 states that funds should not be spent merely because they are budgeted. The Auditor-General concluded that CAC ignored these requirements, creating a risk of diversion of public funds and payment for services that may not have been provided.

CAC acknowledged the spending but attributed much of it to requests from National Assembly committees for oversight visits.

The commission said the resulting reports were intended for legislative use and were not submitted to CAC.

Experts note that this practice of agencies funding lawmakers’ oversight activities is long-standing but poorly documented, which can weaken legislative independence and create conflicts of interest.

The Auditor-General found CAC’s response insufficient and directed that the Registrar-General appear before the Public Accounts Committees, recover the N118.75 million, remit it to the treasury, and provide proof of remittance.

Failure to comply could trigger sanctions under Paragraph 3106 of the Financial Regulations (2009), including recovery of funds from responsible officers and possible removal from office.

The audit also reported six CAC vehicles were unaccounted for, with five reportedly used by the Minister of Industry, Trade, and Investment (FMITI) and one by a Special Assistant to the Permanent Secretary.

No documentation authorised the transfer or use of the vehicles, suggesting the ministry may have exceeded its supervisory authority.

Regulations require accounting officers to maintain control over government assets and prohibit ministries from using vehicles from agencies they supervise.

CAC said the vehicles were temporarily assigned to FMITI as “project vehicles,” but the Auditor-General found this explanation insufficient and recommended their return, with proof submitted to the Public Accounts Committees.

The audit further revealed that CAC spent N123.94 million on external legal fees without prior approval from the Attorney-General of the Federation.

Regulations require engagements of outside lawyers to include formal instruction letters, service reports, and supporting court documents. CAC defended the payments, citing the Companies and Allied Matters Act (CAMA 2020), which allows the Registrar-General to control and disburse the Commission’s funds, and provisions allowing statutory bodies to develop policies where internal rules are absent.

The Auditor-General rejected this and directed the funds be recovered, remitted to the treasury, and evidence provided to the National Assembly committees. Failure to comply could trigger sanctions under Paragraph 3106.

The findings highlight weaknesses in CAC’s financial management and oversight.

The involvement of the supervising ministry in the missing vehicles raises concerns about ministerial overreach and institutional autonomy.

If a regulatory agency cannot maintain control over its assets, spending, or procurement, its ability to enforce corporate compliance is undermined.

Informal appropriation of resources by supervising ministries also points to broader governance issues in Nigeria’s public sector. (BUSINESS DAY)