FG, STATES, LGs SHARE N429.127 BILLION AS FEBRUARY 2017 ALLOCATION

The Federal Government, States and Local Government Councils have shared a total of N429.127 billion federal revenue generated for the month of February 2017. The N429.127 billion was lower than the N465.149 shared in January by N36.022 billion. 

A communiqué read by the Chairman of the Federation Account Allocation Committee (FAAC), the Minister of Finance, Mrs. Kemi Adeosun, showed that the gross statutory revenue of N290.163 billion was received in February 2017. This was lower than the N324.990 received in January 2017 by N34.827. 

The distributable statutory revenue for the month was N258.692 billion. The sum of N6.330 billion was refunded by NNPC and N60.899 billion was available from the Excess PPT Account. There was also the exchange gain of N40.329 billion. These, together with the revenue from the Value Added Tax, made up the total distributable revenue for the month. 

She announced that from the distributable statutory revenue of N258.692 billion, statutory deductions were made to the FIRS, NCS and DPR, resulting in net statutory revenue of N246.390 billion. From this amount, the federal government got N117.581 billion (52.68%) against the N133.192 billion it got in January. The States got N59.639 billion (26.72%) as against N67.557 billion they got in the previous month and the Local Governments got N45.979 billion (20.60%) and against N52.083 billion in the previous month. The oil producing states got N23.191 billion as 13 % derivation revenue as against N20.620 billion they got in January. 

For the month of February 2017, the gross revenue available from the Value Added Tax (VAT) was N69.207 billion as against the N73.522 billion in the previous month, resulting in a decrease of N4.315 billion. From this amount, the Federal Government got N9.966 billion (15%) as against N10.587 billion the previous month, State Governments got N33.220 billion (50%) as against N35.291 billion the previous month and Local Governments got N23.254 billion (35%) as against N24.703 billion the previous month. 

The Minister said that there was revenue increase of $4.06 million in federation export sales due to a rise in Crude Oil export volume by 0.30 million barrels, although average price of Crude Oil fell from $49.57 to $44.74 per barrel during the period under review.  There were also significant decreases in revenues from Petroleum Profit Tax (PPT), Companies Income Tax (CIT), as well as Import and Excise Duties and Oil Royalty. 

 

FG LAUNCHES ACCOUNTING SOFTWARE TO ENHANCE ACCOUNTABILITY, FISCAL AND FINANCIAL DISCIPLINE

As part of ongoing measures to improve Public Financial Management across all levels of Government, the Federal Government has developed an IPSAS Compliant accounting software suite “OneBook”, aimed at enhancing efficiency, accountability, and transparency.

The OneBook suite offers a complete solution that allows for standardization and seamless exchange of information across all tiers of Government by providing a unified accounting and reporting solution across key areas: Government expenditure, financial, treasury and receipts management.

The adoption of the platform will help to achieve cost savings as it ensures the application of controls and standards across spending agencies for recording, processing and releasing payments.

Introduction and compliance with IPSAS also formed part of the conditions included in the Fiscal Sustainability Plan for State Governments.

The software package, which was launched at the Federation Account Allocation Committee (FAAC) meeting for March 2017, is capable of capturing various revenue types and would impact the entire financial operations from budgeting, through revenue and expenditure management to final accounts.

Minister of Finance, Mrs. Kemi Adeosun, said the software will be made available to all States and Local Governments to support their accounting and reporting processes. States that are yet to convert to IPSAS accrual accounting will be able to use this suite as it guarantees IPSAS accrual compliance.

The Minister said the software is fully compliant with International Public Sector Accounting Standards (IPSAS) and will enhance Public Sector Financial Management, Analysis and Performance Reporting.

OneBook software captures data once, thereby eliminating redundant data processing and also provides a single source of truth on government budget, appropriation, allocations, releases, obligations and expenditure.

The advanced software is an initiative of the Federal Government through the Ministry of Finance.

FG TRACKS ASSETS HELD BY MDAS, CREATES ASSETS REGISTER

The Federal Government has launched an Asset Tracking and Management Project (ATMProject), through which for the first time, the Government would be able to locate, identify, assess and evaluate all its moveable and immoveable assets, the Minister of Finance, Mrs. Kemi Adeosun, has announced.

Similarly, a Central Asset Register would be created and domiciled in the Federal Ministry of Finance for recording the actual quantity, value, condition and location of all the capital assets belonging to the Federal Government. Under the International Public Sector reporting Standard (IPSAS) Government is expected to record both its assets and liabilities.

“For the first time a central and Unified National Database of Assets ( Asset Register) would be generated and maintained for the purpose of recording, tracking and managing the huge investments in capital assets owned by Government,” the Minister explained.

The Assets Tracking and Management Project and the creation of the Assets Register were new initiatives of the Federal Ministry of Finance designed to enhance accountability, promote transparency and deepen efficiency in line with the change agenda of the Administration of President Muhammadu Buhari.

“The Asset Tracking exercise and Register will make planning and control easier and improve accountability for assets. With the increased allocation to capital expenditure to 30%, it is important that all assets are recorded and accounted for. Where disposals occur, they must be in line with the laid down procedures and must be transparent,” she pointed out.

The Asset Register would afford the Government to know and monitor in real time online information on the inventory of Government Assets. 

A Project Coordinator has been appointed by the Minister for the immediate take-off of the Asset Tracking and Management Project and the creation of the first Central Asset Register for the Federal Government.

Meanwhile a circular signed by the Minister of Finance has been dispatched to all Federal Ministries, Departments and Agencies (MDAs) requesting their Accounting Officers  to prepare an inventory of all fixed assets held as at 31st December  2016, to facilitate physical verification by the Project Team.

The circular further requested all heads of MDAs “to ensure that any assets held by current and former staff are fully accounted for.  In this regard, you may find it necessary to contact any former staff and /or political office holders to avail them the opportunity to return relevant assets in their possession.”

The circular emphasised that “all inventory records submitted will be cross-checked to capital releases and project account purchases to ensure completeness. Where assets have been sold or otherwise disposed of, they must be recorded with supporting authorization for sale and evidence of payment, where applicable.” 

The Circular drew the attention of Heads of MDAs to Chapter 26 of the Financial Regulations, with regards to disposals of assets and warned that “any asset not accessible for physical inspection and not disposed of in accordance with financial requirements will be deemed to have been illegally withheld or converted. Please record such assets so as to enable the investigative agencies to be notified.”

The records of the assets disposed of should cover the last five years and all accounting officers of the MDAs were to submit their reports not later than three weeks from the date of receipt of the circular.

It could be recalled that the Independent Corrupt Practices Commission (ICPC) delivered 40 vehicles to the Federal Ministry of Water Resources which it recovered from some retired Directors of the Ministry; and also the Economic and Financial Crimes Commission (EFCC) announced the recovery of 40 Sports Utility Vehicles from a retired Permanent Secretary who served in  the Federal Ministry of Power.

ADEOSUN CLARIFIES PARIS CLUB REFUNDS

The Minister of Finance has deemed it necessary to address the issue of Paris Club Refunds and wishes to assure the public that the Federal Government has consistently complied with all extant rules and regulations in the disbursement of the Paris Club refunds to State Governments.

The Federal Government's disbursement process is transparent and targeted at the attainment of specific economic objectives. The inability of some sub-national governments to meet salary and other obligations was considered inconsonant with the Federal Government’s economic stimulus programme. Claims with regard to over deductions had been made to the Federal Government, consistently since 2005.

The Debt Management Office (DMO) initially requested for a period of 22 months to complete the reconciliation and facilitate disbursement. However, President Muhammadu Buhari, considering the plight of salary earners and pensioners and the need to stimulate the economy, directed that the exercise be completed within 12 months.

In addition, Mr. President gave an express Anticipatory Approval for the release of up to 50% of the claim of each state, pending final reconciliation. That reconciliation is undertaken by the DMO, Office of the Accountant General of the Federation (OAGF) and the relevant State Governments. Accordingly, the disbursements are staggered in batches and payments are only made when the claims of each state have been reconciled with the facts at the disposal of the Federal Government.

Specifically, information was available that some states had been paid either in full or in part, under previous administrations. This necessitated a more detailed review, for the states in question.

The release of the first tranche, representing up to 25% of claims, being N522.7bn commenced in December 2016. Disbursement was subject to an agreement by State Governments that 50% of any amount received would be earmarked for the payment of salaries and pensions. In addition, each Governor gave an undertaking that excess payments would be recovered from the Federal Accounts Allocation (FAAC), if the final reconciliation found that the amount paid under the Anticipatory Approval exceeded that due.

It is standard practice in the Ministry of Finance to undertake independent monitoring of compliance with the terms and conditions of funds released. This will be conducted in due course.

To date, nine batches have been processed while some balances remain outstanding to the possible credit of a number of states. Given the foregoing, complete and final figures can only be released and published after each state and the Federal Government have reconciled and agreed on the sums due.

At the National Economic Council meeting on Thursday March 16, 2017, President Muhammadu Buhari instructed the Minister of Finance and Central Bank Governor to commence the process of resolving the balance of the approved amount. The overriding consideration for any further releases will be the current and projected cash flows of the Federation as well as the outcome of the independent monitoring of the compliance with terms and conditions attached to the previous releases.

The Minister of Finance would like to reaffirm the commitment of the administration to publish all relevant information on the Paris Club refunds. 

GHOST WORKERS: FINANCE MINISTER URGES CBN TO EXTEND BVN TO MICROFINANCE BANKS

The Minister of Finance, Mrs. Kemi Adeosun, has strongly solicited the cooperation of the Central Bank of Nigeria (CBN), in extending the requirement for Bank Verification Number (BVN) to account holders in Microfinance Banks (MFBs), to facilitate the detection of bank accounts which might have been opened and operated in such banks for ghost workers by fraudulent syndicates.

The Minister,  who  sought  the  cooperation  of the CBN in that regard  in a correspondence addressed to the Governor of the Central Bank of Nigeria, said that the introduction of the Bank Verification Number by the CBN  has contributed immensely in improving the  integrity of the Federal Government payroll  on which  more than 50,000 ghost workers were detected and removed.

Mrs. Adeosun stated that operating bank accounts in Microfinance Banks without requirement for BVN has left a huge loophole which individuals intent on financial crimes could use to hide and launder proceeds of crime and successfully escape detection by law enforcement agencies.

"Our ongoing efforts to verify the integrity of Federal Government personnel costs and purge the system of fraud and error has made extensive use of the Bank Verification Number as a means of identifying recipients of multiple salaries, and salaries paid into accounts with names that differ to those held on our payroll records. The success of this effort has to date yielded the removal of over 50,000 payroll entries," the Minister emphasised.

Mrs.  Adeosun referred   the CBN Governor to the discovery that, prior to the deadline for obtaining the BVN, the movement of a large number of salary accounts of Federal employees from commercial banks to Microfinance Banks, was observed.

"This is a suspicious activity and we have already commenced a review of such cases to identify and investigate any cases of fraud," the Minister explained.

While noting that extending the requirement for BVN to Microfinance Banks may put a huge financial strain on the smaller Microfinance Banks, the Minister pointed out that “some MFBs, such as National Police Force Microfinance (NPF), have over 27,000 salary accounts. Our inability to perform checks on such a large number of salary earners is a key risk."

“I am therefore seeking your co-operation to enforce compliance with BVN on any MFB with over 200 active salary accounts or those above a certain size. This will support the Federal Government’s efforts at reducing leakages to create headroom for the capital projects that will support the growth of the economy," the Minister said in the correspondence.

It could be recalled that the CBN was in September 2016 reported by the media to have announced its intention to extend the requirement for the Bank Verification Number to MFBs in the country, but the exercise has yet to take off.