Auditor General reveals ₦4.6bn unapproved spending in Ministry of Works
An audit report has revealed financial irregularities amounting to over ₦4.64bn in the Federal Ministry of Works (Housing Sector), highlighting concerns over non-compliance with financial regulations and procurement laws.
The findings, from the Auditor-General for the Federation’s Annual Report, cover activities between 2020 and 2021 and expose significant lapses in internal controls during Babatunde Fashola’s tenure as Minister of Works and Housing.
The report identifies issues such as undocumented payments, extra-budgetary spending, mobilization fees surpassing approved limits, and contracts awarded without due process.
A total of ₦1.08bn was paid from the Government Integrated Financial Management Information System account without the necessary payment vouchers, breaching Paragraph 601 of the Financial Regulations, 2009.
Additionally, ₦546m was transferred to project accounts without proper documentation or budgetary provision.
The Auditor-General’s report attributed these irregularities to weak internal control mechanisms within the Ministry and warned of risks like fund misappropriation and loss. Despite being queried, the ministry failed to address these issues.
The Auditor-General recommended that the Permanent Secretary justify the payments, recover the funds, and remit them to the Treasury.
The report also urged that evidence of compliance be submitted to the National Assembly’s Public Accounts Committees, with failure to do so subject to sanctions under Paragraph 3106 of the Financial Regulations.
Additionally, the audit uncovered extra-budgetary expenditures totaling ₦2.89bn, including ₦1.88bn spent without legislative appropriation.
Over ₦1bn was paid to contractors for road projects in Katsina State, which were only included in the 2017 Appropriation Act, violating Section 80(4) of the 1999 Constitution, which requires legislative approval for all public fund withdrawals.
The audit report detailed that ₦1,883,795,670.51 was spent by the Ministry without evidence of appropriation. Additionally, ₦1,003,039,708.79 was paid to four contractors for road construction in Daura, Katsina State, a project listed in the 2017 budget. However, approval for these extra-budgetary expenditures, totaling ₦2,886,835,379.30, was not submitted to the National Assembly for audit.
The report attributed these anomalies to weak internal controls within the Ministry and raised concerns about the potential misappropriation of public funds. Despite being queried, the Ministry did not respond to clarify these expenditures.
Furthermore, contracts worth ₦493.97m were awarded to companies not registered with the Corporate Affairs Commission (CAC). Of this, ₦170.36m was paid to unregistered entities, and one company, awarded a contract in 2016, was only incorporated in 2019, violating the Public Procurement Act, 2007, and the Companies and Allied Matters Act, 2020. These irregularities increase the risk of contract non-execution, fund mismanagement, and ghost entities.
The audit recommended the recovery of unauthorized funds, sanctions for responsible officials, and adherence to financial regulations.
Proofreading by Uchechi Ojo, Sub-editor at NeptunePrime.
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