Nigerian Government Set To Control MDAs’ Spending

The Minister of Finance, Mrs Kemi Adeosun has issued a circular on the guidelines regarding budgeting, revenue and expenditure aimed at ensuring that federal government Ministries, Departments, and Agencies (MDAs) remit revenue and generate operating surpluses which by law ought to be credited as Consolidated Revenue Fund (CRF).

According to the report from the Publicity Department of the Federal Ministry of Finance recently, the circular is aimed at compelling Boards and Agencies which currently operate outside budgetary control to comply with the law. The report also noted that Section 22(2) of the Fiscal Responsibility Act (FRA) lists agencies, including: NPA, NIMASSA, NAFDAC, JAMB, NTA, NCC, CAC, NECO as those to remit 80% of their operating surplus into the Consolidated Revenue Fund.

“Minister of Finance stated that records show very poor compliance with the provisions of the Fiscal Responsibility Act. Some agencies have never credited the Consolidated Revenue Fund, despite having salary, capital and overhead financed by the Federal Government. Indeed, the cost to income rates of 99.8% have been the average, meaning that they spend all their internally generated revenue and subventions released to them,” the report said.

“Such practices are not sustainable in any economic climate and with the current serious economic challenges being faced by Nigeria, it can no longer be tolerated. Accordingly, all revenue generating agencies must comply with the circular and cut their costs.”

In the circular sent to the MDAs, the Minister said that the revenues generated by all Ministries, Departments and Agencies (MDAs) must be reported on a gross basis prior to any deductions. Adding, all self – funded Federal Agencies are to limit their annual expenditures from their internally generated revenues to not more than 75% (seventy-five percent) of their total gross revenue, while fully funded agencies are to remit all their internally generated revenue (IGR) to the Consolidated Revenue Fund (CRF).

The referred the circular as further indicating that henceforth, 80% of the resulting operating surplus by MDAs should be remitted into the Consolidated Revenue Fund (CRF) on a quarterly basis, in accordance with the Fiscal Responsibility Act.

“To ensure continual monitoring, the circular required all MDAs funded through the annual budget to submit monthly Expenditure Transcripts and Revenue Returns to the Office of the Accountant-General of the Federation (OAGF), whilst agencies not funded through the annual Federal Government budget are to prepare and submit Quarterly Management Accounts, including revenue returns to the OAGF,” the report intensified.

The Minister reminded all MDAs that in line with Financial Regulations (FR) 107, the Accountant-General of the Federation shall carry out routine revenue monitoring and inspection visits to the MDAs to verify compliance with the new guidelines. He explained quoted the circular as stating that any Accounting Officer/Chief Executive Officer of MDAs who defaults in remitting revenues as appropriate and when due shall be sanctioned accordingly, adding that  the renewal of the tenure of appointment of Accounting Officers/Chief Executive Officers shall be tied to their compliance with the content in the new guidelines. [FMF]