Reps begin probe of N83.9bn COVID-19 funds

February 1, 2021
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The House of Representatives is expected to commence an investigation into the N83.9 billion appropriated for the response to COVID-19 pandemic in the 2020 Appropriation Act.

According to financial records obtained by the office of the Auditor General of the Federation (oAuGF) and transmitted to the Senate and House of Representatives’ Committee on Public Accounts, the sum of N16.9 billion was approved in the 2020 budget, N32.5 billion from the COVID-19 Special Account/Levy and N34.5 billion was to be funded through donations from the public and private sectors.

As stipulated in the audit report on the emergency response programme obtained exclusively by Tribune Online, from the N83.9 billion appropriated, a total of N63,797,839,685.42 had been disbursed to implementing entities and states at the time of the audit.

Of the amount disbursed, N22,163,130,411.00 was to the Presidential Task Force (PTF) chaired by the Secretary to the Government of the Federation (SGF), Mr Boss Mustapha; N24,634,709,274.42 was to participating Ministries, Departments and Agencies (MDAs) while the sum of N17 billion to State Governments.

“In the course of implementing the COVID-19 intervention activities, funds mobilised from various sources as at 30th June 2020 include: N22.2 billion was disbursed by the Federal Government to the PTF; N24.6 billion was disbursed by the Federal Government to the participating agencies; N30.1 billion was raised by Coalition against COVID-19 (CACOVID) and is under their direct management; N17 billion was paid directly by the Federal Government to some States as support; N110.05 billion in cash and in-kind was raised by 12 International Development Partners” as well as the sum of N21 billion donated by the NNPC Group and N1.9 billion donations by the public into designated accounts with five commercial banks.

“This interim report covers findings from the audit of transactions amounting to N4.9 billion as at 30th June 2020 (N191 million at the PTF and N4.7 billion at participating agencies). A breakdown of the Agencies and entities responsible for the transactions is included within the report, and audits of the participating agencies remain ongoing at the time of publishing this interim report.”

The oAuGF also captured the Presidential Order issued for the “expansion of humanitarian relief in the form of palliatives and cash payments to poor and vulnerable households. N500 billion was approved as additional welfare, Small Medium Enterprise (SME) support and safety net packages for COVID-19 support.”

In the audit report, the oAuGF frowned at the low utilisation of COVID-19 funds allocated to the PTF and the participating agencies for the containment of COVID-19 were either not utilized or had low levels of utilization as at 30th June 2020.

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“Majority of the participating agencies failed to use funds allocated to them through the PTF and directly through their annual budget towards the COVID-19 interventions as the level of funds utilization was 23.4 per cent across the 21 participating entities. We noted however the PTF’s assertion that certain accrued expenditures were still being processed.

“Funds made available to the participating agencies through the 2020 annual budget were mainly from existing envelopes that were to be redirected to COVID-19 costs. These funds from the existing budget amounted to N24.6 billion. The agencies were unable to spend the funds without proper approval of virement from the previous purposes (line items) to COVID-19 specific line items.

“The level of expenditure on COVID-19 from the 2020 appropriation of each participating agency is unclear, as is the extent to which some of the agencies were able to vire funds from the COVID-19 allocation to replenish existing budget lines applied towards the pandemic under emergency,” the report stated.

While the oAuGF picked holes in the area of documentation, it called for the establishment of the National Register for recording all receipts of funds, materials, and other resources made available for the containment of the COVID-19 pandemic will require a regular update and additional functionalities to be of maximum value.

“For example, the current register does not yet contain information to confirm that beneficiary agencies received the funds and donations registered for them. Furthermore, all entries into the register should be dated to enable more useful reporting of its contents.

To this extent, it recommended that: “The National Register should be improved to enable the tracking of pledges, commitments, actual disbursements and distributions. i.e. where the funds or materials were received and the purpose/beneficiary to which they were applied.

“The register should be all-encompassing and not limited to donations/materials brought to the attention of the PTF. The PTF should introduce a regular process of circularising all stakeholders requesting confirmation of donations made, and donations received.

“Funds made available directly through the PTF for the operations of the Task Force and for the benefit of participating agencies were also not spent for reasons as yet unclear. These funds amounted to N4.5 billion for the operations of the PTF and N17.6 billion for the Participating Agencies. We understand the core reason may be delays in the administrative processes for accessing the available funds. The extent of expenditures accrued and awaiting settlement is not fully visible to the PTF.

“The public expenditure regulations of the Federal Government regarding the virement of funds need to be reviewed to be more effective during emergencies. This will ensure more timely expenditure on activities that are intended to mitigate the impact of the pandemic and any future national emergencies.

“Participating agencies should re-classify all expenditures incurred for COVID-19 mitigations which were funded from existing (pre-COVID) budgets. These expenditures should be reflected within budget lines specifically for the COVID-19 response and the information should be submitted to the PTF and the Office of the Auditor-General for the Federation.”

The oAuGF further observed that “a number of parallel efforts are underway at a national level to support Nigeria’s response to the pandemic. CACOVID, the NNPC Oil and Gas Group, and Nigeria’s Development Partners had committed N30 billion, N21 billion and N110.05 billion respectively in donations and materials towards supporting the efforts of the Government to tackle the pandemic.

“Audit observed gaps in the alignment between the activities of these groups and the coordination being carried out by the PTF, and that the PTF does not have full visibility of the intervention activities of all the groups.”

On the activities of the National Centre for Disease Control (NCDC), the oAuGF observed a number of weaknesses in the operations of the NCDC.

“While recognising overall the challenging nature of maintaining effective controls while also responding to an emergency, the audit is concerned that the use of funds during emergency situations can be particularly susceptible to misapplication, waste and misappropriation. Specifically, appropriate supporting documents were not presented to substantiate a number of significant expenditures and disbursements.”

In the bid to address the anomaly, the oAuGF recommended that the “Financial management processes at the NCDC should be strengthened to ensure adequate and effective controls over public funds, and adequate documentation of expenditures even in challenging circumstances.

“The IMF approved an emergency loan of $3.4 billion (N1.29 trillion) to help address the decline in Nigeria’s foreign exchange reserves and provide financing to the budget for targeted and temporary spending increases. This was aimed at helping Nigeria contain and mitigate the economic impact of the pandemic and of the sharp fall in international oil prices and associated revenues.

“The Africa Development Bank (AfDB) also approved a loan of $288.5 million (N109.6 billion) to help Nigeria tackle the pandemic and mitigate its impact. The funds were intended to support the national health systems, specifically for surveillance, emergency response and strengthening of the social protection system.

“The fund flows arising from both financing agreements will be covered during the ongoing audit.”

NIGERIAN TRIBUNE

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