BY TEMITAYO ODUNLAMI AND EYO CHARLES
Calabar — The Nigerian National Petroleum Corporation (NNPC), Nigerian Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency (NIMASA) and some other key revenue-spinning federal government corporations and agencies have not been remitting their operating surplus to the federal government's treasury as statutorily mandated, Sunday Trust can confirm.
Other government agencies that have been exhibiting disdain for compliance and transparency in their remittances include the Nigeria Customs Service (NCS), Bureau of Public Enterprises (BPE), Federal Airport Authority of Nigeria (FAAN) and Nigerian Electricity Regulatory Commission (NERC), the Nigerian Ports Authority, the Central Bank of Nigeria (CBN) and the Nigerian Civil Aviation Authority (NCAA).
The Fiscal Responsibility Act (FRA) 2007 mandates some select government corporations and agencies to pay the balance of their operating surplus to government's Consolidated Revenue Fund (CRF) "not later than one month following the statutory deadline for publishing each corporation's accounts." Such surpluses are classified as federal treasury revenues. The corporations are expected to prepare and publish their audited financial reports not later than three months after the end of their financial years. Apparently, the Act considers the operations of such corporations and agencies as buoyant.
Established to monitor and enforce the provisions of the Act is the Fiscal Responsibility Commission (FRC). The Act empowers the Commission to "compel any person or government institution to disclose information relating to public revenues and expenditures". The Act mandates the FRC to monitor and enforce the remittance of revenues by government corporations and agencies into the CRF and publish its reports at the beginning of every fiscal year.
Although section 48-50 of the FRC provides for transparency and accountability in federal government's fiscal transactions, the FRC's annual report and audited accounts for 2011 exposed many government's corporations and agencies as anything but transparent. As declared by the Commission's Chairman, Alhaji Aliyu Jubril Yelwa, many of the agencies perpetrate so much secrecy and manipulation of their revenues that they perpetually report losses.
At least, 11 of the agencies have been declaring losses every year and, therefore, have not been remitting anything to the CRF. They included agencies widely known by the public as veritable cash cows for the federal government. For the past three years, notably, high-flying, huge revenue generators like the NNPC, Customs Service, BPE, NIMASA, NERC, FAAN, Nigerian Immigration Service (NIS) and Nigerian Broadcasting Commission (NBC) have not paid a kobo into the CRF. The Federal Inland Revenue Service (FIRS), rather than pay its operating surplus to the CRF as listed by law, has been sending it to the Federation Account.
Other government agencies on FRC's list that have not been sending anything in are the National Agency for Science and Engineering Infrastructure (NASEI), Nigerian Social Insurance Trust Fund (NSITF), National Sugar Development Council (NSDC), Nigerian Tourism Development Corporation (NTDC), National Agency for Food and Drug Administration and Control (NAFDAC), National Business and Technical Examination Board (NABTEB) and National Oil Spill Detection and Response Agency (NOSDRA).
Some other bodies, not complying entirely with the FRA, have been remitting their operating surpluses epileptically. They include the Central Bank of Nigeria (CBN), which, claiming autonomy, says it operates a budget approved by its governing board, and didn't remit any surplus in 2009. It did pay in N31 billion in 2010 and N64.12 billion the following year, though.
The Nigerian Ports Authority (NPA) remitted N2.89 billion in 2009 but has since been defaulting. The FRC 2011 report emphasised that "buoyant agencies such as SEC and NPA have declared operating profit only once or twice in four years." Indeed, the Securities and Exchange Commission (SEC), is a fellow traveller with the NPA, remitting only once, in 2009, the sum of N1.92 billion.
The Nigerian Civil Aviation Authority (NCAA) also paid in N80 million and N255.43 million in 2009 and 2010 respectively, but didn't remit any amount in 2011, as did the Nigerian Postal Service (NIPOST), which also remitted N34.45 million and N109.15 million in 2009 and 2010 respectively but was absent on the compliance roll the following year.
Other two-time payees on the FRC list are the Nigerian Shippers Council (NSC), which remitted N52.05 million and N74 million in 2009 and 2010; and the National Automotive Council (NAC), which sent in N44.92 million and N17.31 million, also for those two years.
Only two bodies - the Nigerian Deposit Insurance Corporation (NDIC) and the Nigerian Communications Commission (NCC) - kept a clean slate of compliance in the three years that the FRC report covered. The NDIC paid operating surpluses of N6.20 billion, N1.27 billion and N4.93 in 2009, 2010 and 2011, while the NCC paid N1.6 billion, N4 billion and N2 billion for the same years.
The report noted that "virtually all the corporations indulged in creative accounting by inflating their costs and, thereby, reducing their operating profit." Moreover, the government agencies wily run two accounting practices; one, the accrual accounting and the other, cash basis. They then craftily apply the cash basis accounting which reports loss or low profit to determine their operating profit figures that they submit to the CRF and FRC.
Chairman of the House of Representatives committee on Services, Hon. Yakubu Doghara recently, in an interview with this publication, accused the Executive of annually spending far beyond what it tells Nigerian in the Appropriation Act. Doghara said that the President Goodluck Jonathan administration might be spending up to N12 trillion every year, dipping its hand into undeclared revenues earned by rich key agencies like the NNPC, NPA and NIMASA.
In what seemed a practical support of that allegation, the House of Representatives had earlier revealed that 60 government agencies generated N9.3 trillion in three years (2009-2012), but only remitted N174.9 billion to the coffers of the federal government. In its report titled, "Poor Remittance of Internally Generated Revenue to the Consolidated Revenue Fund (CRF) by government-owned agencies", the House mentioned agencies like the CBN, NIMASA, NNPC, NPA, Asset Management Corporation of Nigeria (AMCON) and National Pension Commission (PENCOM) among the defaulting agencies being scrutinised. "It was discovered that they habitually under-projected their revenues and over-estimated their expenditures, thereby ensuring that their remittances to the CRF were minimal, if any at all," the report stated.
Despite the admission of the FRC report that government corporations and agencies under-declare their operating profits, won't remit the profits at all in many cases and even refuse outright to provide it information on their internally generated revenue (it mentioned money-spinning NIMASA and the National Tourism Board Council as examples of this), its chairman, Alhaji Yelwa gave the Commission a pass mark, saying, "after four and a half years of enforcement and monitoring of the FRA 2007 at the federal government level, there have been reasonable achievements in macro-economic stability of the national economy, prudent management of the nation's resources, fiscal discipline and transparency in fiscal operations".
Many critics, including some staffers of the Commission itself that confided in the Sunday Trust, did not agree with him. There is even the belief that the Executive is plotting to kill the Commission by financially strangulating it and also encouraging corporations and agencies not to comply with the provisions of the Act. Last week, when the FRC held a two-day retreat in Calabar with the theme "Fiscal responsibility as a strategy for economic transformation", to enlighten participants about the role and importance of the Commission in the national economy, many of the participants did not hide their displeasure with what they believed was the FRC's lack of enforcement muscle.
Senator Isa Galaudu (Kebbi North), Vice Chairman, Senate committee on banking, insurance and other financial institutions raised an alarm at the retreat's opening ceremony that the federal government, through the Ministry of Finance, wanted to kill the Commission. Galaudu remarked that though government has not publicly declared it intends to scrap the FRC, its body language was enough illustration to that effect. The senator disclosed that the "Ministry of Finance has continued to strangulate them (the FRC) with lower budget allocations."
He identified those who abuse the Fiscal Responsibility Act as the "high and mighty" who could not be dealt with. "The Commission has been unable to monitor and discipline anyone, especially 'the high and mighty", Galaudu charged.
In July this year, contributing to Sahara Reporters on the FRC issue, former Minister of the Federal Capital Territory, Malam Nasr el-Rufai wrote that, "Apparently, the practice is for these government agencies to invest the excess funds generated in dodgy and unapproved accounts which yield high interest for the few engaged in these shady deals. Sadly, the cases of misappropriation of public funds were not queried by the FRC whose primary responsibility it is to carry out such activities.
"It is public knowledge that the FRC had sometime last year demanded that NIMASA render audited accounts, but the FRC's demands were blatantly ignored, without any consequences. What is the purpose of the FRC if it can only bark but not bite? The erstwhile FCT minister described the Commission as 'the sleeping watchdog".
The federal government has, indeed, curiously been reducing allocations to the Commission over the last three years, as Sen Galaudu observed. In 2011, the allocation to the FRC was N856 million. While its board and management were still agonising over the inadequacy of the amount, government slashed it to N739 million in 2012. This year, the figure fell to N557 million.
Staffers of the Commission lamented its poor financial situation. Those who spoke with our correspondent, pleading anonymity, said its condition is so parlous that its Administration department cannot afford to issue the workers with identity cards and the offices with computers. Workers are compelled to expend their own money to purchase computers. In 2011, there was provision for purchase of computers, Sunday Trust learnt, but none was bought. The Finance Department has also been unable to pay deserving workers their various claims.
Although the Commission is supposed to be conducting regular physical inspection and verification of projects being executed by the federal governments and its various ministries, departments and agencies (MDAs), but it is so financially incapacitated that it has been able to conduct the verification exercise once in five years. A source revealed that in some instances, the Commission had been compelled to source for funds from agencies it was investigating to perform its duties. Since who pays the piper dictates the tune, the Commission has been hamstrung in investigating the MDAs as it should.
The workers also threw barbs at the FRC commissioners, alleging lukewarm approach to their responsibilities. The Act provides for six full-time commissioners for the FRC, representing each of the geo-political zones. There are additional two non-full-time commissioners. The workers maintained that of the full-time commissioners, only one reported to the office regularly and is committed to the job. Others, they alleged, mark their presence in the office once in a long while. While agreeing that the Commission's chairman, Alhaji Yelwa, a former Executive Director of the CBN and one-time Minister of Water Resources and Rural Development, is professionally qualified to lead the fiscal policeman to achieve its objectives, they feared that his age might not allow him withstand the rigours that the job demands.
Most of the commissioners are politicians who didn't succeed in being elected into political positions. Because they are not experts in the financial sector, their knowledge and commitment to the job are doubtful. The staff members called on government to appoint professionals to the board.
Malam el-Rufai, thus described the plight of the Fiscal Responsibility Commission, "The structure, implementation process and weak leadership are encumbrances to the FRC living up to its maximum potentials. The authority of the Commission in ensuring fiscal responsibility is neither acknowledged nor adhered to.
"The Commission has been lethargic in identifying, investigating and prosecuting MDAs and tiers of government that are suspected of squandering the nation's resources. The reported amount of funds unaccounted for in the last three years alone is almost equivalent to the federal budget for two years! Then again, this state of affairs may just suit President Jonathan and the party at the helm. When everybody in government is bathing in mud of funds diversion, who can point the accusing fingers?"
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