The 360bn Unspent Allocations

It is an irony of governance that the Federal Government which is being accused of underperformance and which has also claimed lack of funds to execute some of its projects could claim a recovery of 360 billion naira unspent budgetary allocations. But this is a fact as proclaimed by the president’s Chief Economic Adviser, Dr. Tanimu Yakubu the other day. According to the presidential adviser, unspent funds from last year’s budgetary allocations to ministries, departments and agencies (MDA’s) totalling 360 billon were recovered by the Federal Government.
As he put it, “When the present administration came on board, we discovered that government did not have enough resources to implement what the president promised during his campaign. So the president directed the recall of MDA’s capital votes and we recovered over 300 billion naira. About 60 billion was also returned from their recurrent expenditure. So it was obvious that the MDAs were just executing projects without any feasibility studies. Hence, it was clear that what needed to be done was to clean the Federal Government’s balance sheet”.
A government that recovered 360 billion naira of unspent taxpayers money which otherwise would have been fraudulently diverted surely deserves commendation but it is troubling that this sharp practice has persisted for decades in government. This fiscal criminality is not restricted to the Federal Government as it is also prevalent in all states of the federation.
Already two ministers have lost their positions over this issue. But given the example set by President Yar’Adua, will the state governors take a cue from him? So far, there is no indication to this effect. Yet, the country loses billions of naira to unscrupulous, greedy and insensitive public officials, money that ought to go into infrastructural and social development. Much as this public finance malady should be condemned, the real issue is, can the nation prevent a recurrence?
Our view is that the Federal Government must first of all set up a committee of independent private auditors, which would study the government’s accounting and budgetary processes because it is the processes and procedures that are actually manipulated and abused to divert government funds. Our own investigation has revealed that there are two steps leading to unspent allocations which are later diverted.
The first is through deliberate delays in awarding contracts and executing government projects. This is also aided by the Ministry of Finance which often delays the release of budgetary allocations. In collusion usually, the officials would wait towards the last two months of the year when they would rush to execute the projects, which would never be done because they have already included same projects in the new year’s budget. Later the money would be shared among the officials, while the money in the new budget would eventually be used to execute the project. And since it is the same government officials that would write the verification reports, a cover up is to be expected since they would have been “taken care of.” An independent audit or verification committee appointed and paid by the Presidency would easily detect this and blow the whistle.
The second step is in connivance with the unscrupulous bank officials at the branches where the MDA’s have accounts. Usually, some of the bank officials are under pressure from their management to raise funds and more accounts for the banks. Targets are then set which determine promotion and retainership or employment. Some of these officials are therefore willing to help government officials divert and retain government funds as much as possible. This is done through the non-release or manipulation of bank statements. And at the end of the year, some bankers are also willing to help hide or divert some of the money to private ends in order to keep their jobs.
It is our strong view that mandatory release of monthly bank statements with copies going to the office of Due Process or the Presidency would help checkmate this ignoble practice. This, in addition to independent auditors and verification teams from outside government, will eliminate this fiscal irresponsibility.