Unskilled Criminals: Document Uncovers How Rural Electrification Agency Paid N83.1Million For Unexecuted Contracts

Secrets Reporters

In a damning revelation, an audit of the Rural Electrification Agency (REA), Abuja, has uncovered irregular payments totaling N83,151,463.30 made for contracts that were either partially executed or not executed at all. 

According to the recently released audit by Nigeria’s auditor-general, the findings, spanning the period of January 2020 to December 2021, have raised significant concerns about compliance with financial regulations and internal control measures within the agency.

The audit highlighted a contract awarded on November 6, 2020, for the provision and installation of a transformer, as well as high- and low-tension lines in Agode and Ahuma communities in Nasarawa State. Valued at N34,481,268.30, the contract had a stipulated completion period of eight weeks. However, a joint verification by the audit team and REA officials on May 16, 2022, revealed that the transformer had not been supplied.

The audit further discovered that the transformer currently in use in the community was procured by the Local Government Authority but mounted on a plinth provided by the REA contractor. The contractor also added REA signage to create the impression that the project was executed by the agency, misleading stakeholders about the true source of the infrastructure.

In a separate instance, the audit found irregularities in a contract valued at N48,670,195.00 for the electrification of Jagurio, Ehule, and Ajebo communities in Lagos State. The project involved the installation of five 300KVA 33/0.415KV transformers. However, only one transformer was installed by the contractor, while the communities had already installed the remaining four.

There was no evidence that the cost of the four transformers not installed by the contractor was deducted from the total contract sum. This discrepancy, according to the audit, suggests a gross violation of financial regulations, resulting in the full payment of the contract amount for incomplete work.

The audit concluded that the total sum of N83,151,463.30 represented payment for unexecuted contracts. This situation, the audit noted that highlights glaring weaknesses in REA’s internal control systems, which have exposed the agency to financial mismanagement and potential loss of public funds.

Despite the audit’s findings, the REA management failed to respond to queries or provide explanations for the irregularities, reinforcing the validity of the audit’s conclusions and underscored the need for immediate remedial action, the auditor-general said.

The auditors have recommended that the Managing Director of REA be summoned to account for the sum of N83,151,463.30 before the Public Accounts Committees of the National Assembly. Additionally, the agency is directed to recover and remit the funds to the federal treasury, with evidence of remittance forwarded to the National Assembly.

Failure to comply with these recommendations would attract sanctions as stipulated in the Financial Regulations of 2009, the audit warned. The report also emphasized the importance of enforcing stringent internal controls to prevent future occurrences of such irregularities.

Section 16(1) of the Public Procurement Act, 2007, and paragraphs 708 and 415 of the Financial Regulations, 2009, explicitly prohibit payments for services not rendered or goods not supplied. The audit findings reveal a blatant disregard for these legal provisions, posing a serious threat to accountability in public financial management.