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How Buhari-led petroleum ministry ‘mismanaged’ N244 million PIB ‘campaign’ funds, others – Report

The report says the ministry “bypassed the procurement process and ‘mismanaged’ over N244 million meant for the campaign awareness of the Petroleum Industry Bill recently signed into law by the president”.
ByQueenEsther Iroanusi August 20, 2021 5 min read
The Ministry of Petroleum and 113 other agencies, are currently enmeshed in alleged misappropriation of funds and other financial ‘discrepancies’, a report has revealed.

The report claims that in 2015, the ministry, headed by President Muhammadu Buhari and which had Emmanuel Kachikwu as minister of state, petroleum, at the time, bypassed the procurement process and ‘mismanaged’ over N244 million meant for the campaign awareness of the Petroleum Industry Bill recently signed into law by the president.


Ibe Kachikwu

This is one of the many queries raised against the ministry by the Auditor-General after auditing its accounts for 2015.

Details of these queries are contained in the annual report of the Auditor-General of the Federation (AuGF) for 2015 submitted to the Senate by its Committee on Public Accounts in June.

In the report, a total of 114 Ministries, Departments and Agencies (MDAs) were indicted and queried by the auditor-general for incessant violation of extant rules, some of which include alleged discrepancies, diversion of funds, non-retirement of personal advances within a financial year and grant of cash advances above approved limits.

A copy of the document obtained by PREMIUM TIMES disclosed that of the 114 MDAs queried by the auditor-general, 84 responded, made submissions and appeared before the Senate panel to defend the queries raised.

Twenty-one MDAs sent in written reports but did not appear before the committee.
Senate Plenary [PHOTO CREDIT: @NgrSenate]

PREMIUM TIMES had reported how the Code of Conduct Bureau (CCB) was queried by the Senate for spending N995 million on “store items” and paying salaries to dead officers as well as how the Petroleum Products Pricing Regulatory Agency (PPPRA) failed to recover N1.6 billion overpaid to oil marketers.

This newspaper also reported how the ministry of information abandoned projects worth over N390 million in 2015.

The queries
The AuGF said N145,591,400 was approved by the Ministerial Tenders Board (MTB) and paid to a management staffer, for the campaign awareness of the Petroleum Industry Bill (PIB), instead of awarding the contract to competent and technically experienced companies through open competitive biddings.

Invoices and receipts of payments from the purported companies and agencies, whose services were engaged in the implementation of the awareness programme, were not tendered for audit, he said.

In its response, the ministry said “the Director of Press was involved and received the payment for the contract because of his wealth of experience, which helped to fast-track and reach out to target audience, in good time.”

But the Senate panel noted that there was no evidence to prove judicious utilisation of the money.

It also asked that officer(s) involved be identified and sanctioned in accordance with Rule 3106(3) of the Financial Regulations (FR) and members of the MTB be identified and sanctioned in line with Rule 3102 (ii) of the FR.

In another query, the AuGF said contrary to procurement process, an entry in the cashbook for the sum of N98.4 million was made in favour of an unnamed company for printing of leaflets for the awareness campaign programme for the PIB vide Payment Voucher No. MPR/CAP/0199/2013 of 30/12/13.

NNPC Towers

The report said there was no formal award of contract and it was also observed that approval for payment was via a memo presented by the Director (Press) to the MTB’s meetings of 9th and 11th October, 2013.

The ministry, however, responded that verifiable costing proposals were submitted and approved before authorisation for the award of the PIB leaflets. It did not state who the proposals were submitted to.

The Senate committee observed that the award and payment for the contract did not follow due process. The panel faulted the ministry for violating Financial Rules and asked that officers involved be identified, demoted in ranks and transferred to other work schedules.

The ministry was also queried for making an entry in the cashbook for the sum of N54 million in favour of an unnamed company for assessment and documentation of oil spill sites in the ten (10) States of the Niger Delta – contrary to procurement process.

The AuGF said there was no formal award of contract but it was observed that an approval for payment was made via a memo presented by the Director (Downstream) to the MTB’s meetings of 9th and 11th October, 2013.

In its response, the ministry said the oil spill sites assessment and documentation required technical capabilities which were provided by the Director of Downstream Sector, and that due process was followed in the award of the contract.

But the Senate panel cited irregularities in the award of the contract including non-adherence to due process in the execution and payment. It recommended identification, and demotion of officers involved.

Other discrepancies
The AuGF also noted unauthorised virement of capital vote.

A total of N23.6 million from the ministry’s capital project fund was expended for procurement of Sallah/Christmas welfare packages to staff, the report said.

When queried, the ministry blamed the labour union for putting “undue pressure on the former Permanent Secretary” to pay the sum after which he “obliged reluctantly to prevent strike action and industrial disharmony.”

But the Senate committee said the payment was “misappropriation and virement without National Assembly approval”. It recommended that the Permanent Secretary be sanctioned in accordance with Rule 3129 of the Financial Regulations.

The ministry was also said to have split the contract of N14.5 million (for the supply of Schneider biros) into smaller packages of less than N5 million each and awarded to four different companies “on order to circumvent the permanent Secretary’s approval threshold of N5 million”.

“Similarly, a contract for the printing of the ministry’s letter-headed paper worth N46.6 million and a contract for supply of toners worth N56.4 million was split and awarded to 17 different contractors.

“The Permanent Secretary responded that the action was a response to the need of various departments at that time of the award and that the contract followed due process.

“The Committee, not satisfied with the shoddy defence of the ministry said the act is a contravention of Rule 3116 of the Financial regulations and recommended that the officer involved be sanctioned in accordance with Rule 3115 of the Financial Regulations and the queried sums of N46.6 million and 56.4 million be recovered and paid back to treasury,” the report said.

In the same year, the Petroleum Ministry was also said to have contravened the e-payment policy.

The AuGF in the report said a total of N32.8 million meant for IPPIS training and other programmes, were paid through the bank accounts of staff of the Finance and Accounts Department, instead of paying the approved amounts directly into the bank accounts of the bonafide beneficiaries, as required by the E-payment policy.

The Ministry responded that it has serious problems in accessing the GIFMIS and IPPIS payment platform. The Permanent Secretary also said all the ultimate beneficiaries received the payments.

Minister State for Petroleum Resources, Timipreye Sylva [PHOTO CREDIT: @@HETimipreSylva]

But the panel observed that there was no evidence to prove that the ultimate beneficiaries received the money. It asked that the Project Accountant who received the payment be identified and “compelled to refund the money to government coffers.”

Another query was an expenditure entry of N719 million made in the cashbook as payments to 11 corporate bodies “for different services rendered” and no documents regarding the payment were produced for audit review.

“The permanent secretary responded that relevant documents were provided to the Resident Auditor.

“The Committee observed that the documents were not made available to the Auditor-General for complete audit, contrary to financial Regulations.

“It recommended that the sum be refunded to the Treasury by the ministry and the officer involved be sanctioned for gross misconduct and disciplined accordingly in accordance with Rule 3118 of the Financial Regulations.”

The panel recommended that the contractor be referred to the EFCC for prosecution and evidence of compliance should be submitted to the AuGF and the committee.

The Senate committee did not indict MDAs alone.

President Muhammadu Buhari’s executive was also faulted in the report for withdrawing funds from Special Fund Accounts for purposes other than the objectives the funds were created, and without recourse to the National Assembly for authorisation – contrary to Section 80 (4) of the Constitution.

The lawmakers also observed lack of collaboration between the two key agencies involved in the management and review of public funds; – the Office of the Auditor-general and the Office of the Accountant-general.

The committee had in June, reiterated the need to pass the Audit Service Bill into law, which the lawmakers said will help strengthen and streamline the audit process to ensure transparency, prudence in public finance and transactions.

Culled from Premium Times

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