Premeditated Fraud: Document Reveals How Babatunde Fashola Secretly Paid 22.61% Mobilization Fee To Contractor on “Sunday” Instead of 15% To Avoid Eyebrows During His Tenure 

Secrets Reporters

The days of Babatunde Fashola as a Minister have come under scrutiny as an extensive audit of the Federal Ministry of Works (Housing Sector) has revealed glaring financial irregularities, drawing attention to potential lapses in financial management and internal controls. Covering activities from January to December 2021, the audit highlighted the Ministry’s failure to adhere to key financial regulations, with particular focus on a significant breach in mobilization fee payments for a construction project in Oyo State.

The audit disclosed that a contract for the construction of road drainage and culverts at the Federal Government Site and Service Estate in Ikolaba, Oyo State, was awarded at a sum of ₦490 million. This contract, assigned to a contractor on Sunday, December 22, 2019, through Payment Voucher No. FMWH/PROC/SPU/CAP/3891/2020, included a mobilization fee of ₦110.81 million—equivalent to 22.61% of the contract value. This payment exceeded the 15% threshold stipulated in Nigeria’s Financial Regulations, 2009.

The financial rules outlined in Paragraph 2933 of the regulations mandate that mobilization fees above the 15% limit must be backed by guarantees from reputable banks or insurance companies. Furthermore, no subsequent payments are to be made without an interim performance certificate. However, in this case, no evidence of such guarantees or certificates was presented, raising questions about the Ministry’s adherence to due process.

The audit report attributed the anomaly to significant weaknesses in the Ministry’s internal control systems. These lapses not only contravened established guidelines but also exposed public funds to the risk of misappropriation. 

Auditors warned that such breaches could lead to payments for unexecuted jobs, further exacerbating concerns about financial accountability.

Despite the severity of the findings, the Ministry’s management, under the leadership of then-Minister Babatunde Fashola, failed to respond to the audit queries. This lack of engagement left the issues unresolved and the auditors’ observations unchallenged, prompting calls for immediate remedial action to address the lapses.

In their recommendations, the auditors called on the Ministry’s Permanent Secretary to justify the payment of the ₦110.81 million mobilization fee to the Public Accounts Committees of the National Assembly.

They also urged the recovery of the excess payment and its remittance to the national treasury, with proof of compliance forwarded to the committees.

The auditors further highlighted the need for enforcement of sanctions as specified in the Financial Regulations. These include penalties for irregular payments and gross misconduct, underscoring the necessity of accountability in public financial management.

The audit findings also pointed out discrepancies in the Ministry’s documentation practices. Paragraph 603(i) of the Financial Regulations mandates that vouchers must include comprehensive details to facilitate verification. The absence of such supporting documentation in this case compounded the irregularities and cast further doubt on the integrity of the Ministry’s financial processes.