A report by the office of the Auditor General of the Federation has revealed how the Nigeria Investment Promotion Commission (NIPC) management, led by Executive Secretary Yewande Sadiku, and the agency’s staff wastefully or unlawfully spent the sum of N4.97billion within four years.
A copy of the 41-page report by federal auditors obtained by LEADERSHIP which highlighted 34 audit issues in the spending of the Commission, covers the period between Jan. 1, 2016, and Dec. 31, 2019.
The report was sent to Mrs Sadiku on April 28 by the Department of Revenue and Economic Sector at the Office of the Auditor-General.
In the report, the auditors flagged the setting aside of N1.7billion as operating surplus to establish a staff housing loan scheme and a post-service benefit scheme as well as an Internally Generated Revenue (IGR) expenditure of N1 billion that was not approved by the Federal Executive Council (FEC) as required by existing regulations.
About the operating surplus, the auditing team observed that NIPC could not get authorisation from the Accountant-General as it purported to do, confirming that only the FEC “can approve any expenditure that is capital in the nature of that magnitude.”
The audit report also noted that N429million was spent on international trips of the Executive Secretary between 2016 and 2018 without evidence of approval from the Head of Service as required by the 2015 circular.
“While the international trainings were funded by the commission, [there is] no single evidence (e.g. air tickets, training fees receipt, certificate of attendance etc.) to substantiate the trips,” the report revealed.
“Management should as a matter of urgency provide this office with the approval or have every kobo spent on international trainings refunded to the sub-treasury of the federal,” the report recommended, adding that the NIPC should also provide evidence of attendance at the foreign events.
Other monies recommended to be refunded by the commission include N70 million spent twice on the same budget items (computer software and publicity material acquisition) in 2019, N29.7million spent on a contract awarded to an unregistered company, and N28.5million paid “without contractual relationship and evidence of work done” in connection to a constituency project.
In the recommendations, the report recommended that the NIPC should recover another sum of N155.5million awarded to unlisted companies and unlawfully spent on international trips for governing council members, among other illegitimate expenses.
The commission’s staff were asked to refund the sum of N29.8million, money got from the “willful disregard” of the estacode supplementation approval rates, and N12.3 million, proceeds of illegally monetised annual leave.
The executive secretary, Mrs Sadiku, was additionally asked to refund over N266 million, including money spent on business instead of economy air tickets, duplicated estacodes, wages paid to auxiliary workers, irregular payment of foreign leave allowance, and an irregular contract award.
Reacting to these allegations Mr Emeka Offor, Head of Corporate Communications, NIPC, told LEADERSHIP that this was a normal audit process carried out by the Office of the Auditor General of the Federation adding that the Audit Report has been sent to the Executive Secretary and She has responded to all the issues raised.
The NIPC was accused of awarding contracts above the approved threshold, having irregularities in procurement processes, having duplicated expenditures running into hundreds of millions, paying a non-contracted travel agent, paying employees of other government agencies allowances they were not entitled to, paying for tax consultancy services despite having an accounts department with over 30 members, and so on.
The auditing team said, in its view, “the commission is in the habit of circumventing award process[es].”
Aside from the issues of mismanagement raised, the federal auditors noted a “high risk of material misstatement” as well as sub-standard and misleading reporting in the financial statement of 2016. They cited as example, the payment of N150.7 million to staff members and others for foreign trips according to payment vouchers, while only N43.3 million was recognised in the statement.
They further observed that the commission illegitimately approved a revised IGR budget for 2018 to the tune of N4 billion. This action, they said, contravened an existing circular that requires annual budgets to go through the National Assembly.
The auditors also accused the NIPC of a deliberate refusal to compute operating surplus for 2018 and 2019. Mrs Sadiku had explained that it was due to the non-approval of financial statements for the years by the governing board, but the auditors insist there is no correlation there.
The auditors noted some of the risks arising from how the NIPC is run, including loss of government fund and reduction in revenue, extra-budgetary expenses, bid-rigging and manipulation, litigation, deliberate delay in remittance, and waste of government resources, and willful violation of government policies.
Director of the Revenue and Economic Sector Audit Department, Isiuku-Julius Michael, urged the management of NIPC to send observations within 21 days in preparation for the final audit report.