Fed Min Of Industry, Trade & Investment Records N3.07bn in Questioned Transactions as Funds Are Misapplied, Payments Bypass Controls

Secrets Reporters

Amid the intricate paper trail of government finance, millions of naira moved through the Federal Ministry of Industry, Trade and Investment in transactions that our review found were not supported by the prescribed approvals, documentation or financial procedures.

The Federal Ministry of Industry, Trade and Investment (FMITI) recorded approximately N3.073 billion across 15 issues covering the 2019 and 2020 financial years, with the findings including misapplication of intervention funds, payments made outside the prescribed e-payment system, unretired expenditures and the withholding of financial records.

During the period under review, Otunba Adeniyi Niyi Adebayo served as Minister of Industry, Trade and Investment, having assumed office on August 21, 2019.

One of the transactions involved the misapplication of N125.668 million released as a Special Intervention Fund. The money was used to offset staff death benefits, repatriation allowances and accommodation-in-lieu payments instead of the purpose for which the intervention fund was released.

Of the amount, N103.270 million was paid through a single voucher dated March 26, 2020, with no evidence of budgetary appropriation for the expenditure. The transaction violates Financial Regulations 2009, paragraph 417, which governs the application of public funds to their approved purposes.

The Ministry also made N20 million payment intended for the Nigerian Investment Promotion Commission (NIPC) to three Ministry officers instead. The money was meant to cover an interim court injunction involving NIPC, but there was no evidence that the Commission received the funds. No court documents supporting the payment were also produced.

The transaction is in violation of Financial Regulations 2009, paragraphs 713 and 613, as well as Treasury Circular TRY/A88&B8/2008, which prescribe the use of the approved e-payment system for government transactions.

Furthermore, N83.270 million was paid from the Special Intervention Fund for a six-zone sensitisation programme. The documentation presented for the six zones was found to be almost identical. A hotel bill submitted for the North Central leg, stated to have taken place in Keffi, was issued by a hotel in Bauchi.

The expenditure included N17.4 million in duty tour allowance and travel expenses for 120 staff, as well as N6.6 million paid to 18 resource persons. However, beneficiary details and procurement evidence were not produced, and there was no evidence that the sensitisation programme actually took place.

The payment violates Financial Regulations 2009, paragraphs 603(i), 708 and 415, as well as Section 20(2) of the Public Procurement Act, which sets requirements for the proper procurement and expenditure of public funds.

Another N19.729 million was paid from the Intervention Fund as Estacode for foreign travel. It was found that some of the payments made in 2020 related to the Russia-Africa Summit, which had taken place in October 2019. There was no evidence of revalidation of the earlier travel arrangements, and no documentation establishing participation in the event was produced.

The expenditure goes against Financial Regulations 2009, paragraphs 111(ii)(a) and 611(c), which govern the authorisation and payment of foreign travel allowances.

Also, N25.838 million was paid on April 20, 2020, for a Planning Committee established ahead of the 3rd Nigeria-UK Economic Development Forum ministerial meeting, which had been scheduled for March 2020. There was no evidence showing how the money was utilised or that the expenditure was retired.

The payment therefore violates Financial Regulations 2009, paragraph 708, which requires government expenditure to be properly accounted for and supported by the required documentation.

The Ministry further recorded N201.541 million in payments for which no paid vouchers were raised. The absence of paid vouchers meant that the transactions could not have passed through the required pre-payment audit process.

The payments are contrary to Financial Regulations 2009, paragraphs 601 and 1705, which provide for the preparation and examination of payment vouchers as part of government financial control.

In another instance, N42.010 million was incurred as out-of-pocket expenses by Ministry staff through cash advances exceeding the permitted N200,000 threshold.

Some of the individual payments also exceeded 33 per cent of the recipients’ salaries, while applications and approvals supporting the payments were not attached. The transactions violate Treasury Circular TRY/A7&B7/2015 and Financial Regulations 2009, paragraphs 2302(ii) and 1420, which prescribe the limits and procedures applicable to cash advances.

There was also a denial of access to financial and administrative records.

The Ministry had appointed consultants to undertake revenue collection, but there was no evidence of the presidential approval required for the concession of revenue collection to consultants.

Furthermore, the Ministry withheld its 2020 Internally Generated Revenue cash book, evidence of remittances, certificate register, performance reports and contract agreements from the review.

The withholding of the records is contrary to Section 85(2) of the Constitution and Financial Regulations 2009, paragraph 601, while Treasury Circular TRY A6&B6/2019, paragraph 3(d) requires presidential approval where revenue collection is concessioned to consultants.