2014 Audit Report Uncovers N3.3 Trillion Fraud Across Government Agencies, NASS

Posted by African Examiner Featured, Latest Headlines, News Monday, March 14th, 2016

Ayodele Afolabi, Abuja

BALTIMORE, MD (AFRICAN EXAMINER) – Senators were held spellbound by the series of frauds perpetrated by various government agencies , including the National Assembly, all totaling over N3.3 trillion.

This was contained in the Auditor-General of the Federation (AGF), Samuel Ukura 2014 audit report submitted to the Senate.

The fraud also captures embassies and foreign missions submitted that N3.3trn Crude oil sales revenues made by the Nigerian National Petroleum Corporation (NNPC ), were not not remitted to Federal Account Allocation Committee ( FAAC).

The AGF, who presented a copy of the report to the Clerk to the National Assembly, Alhaji Salisu Maikaswa, for onward presentation to both chambers, gave highlights of how monies were diverted or spent by MDAs during the period under review.

According to the AGF, the Nigeria National Petroleum Corporation (NNPC), did not remit N3,234577,666,791.35 to the Federation Account Allocation Committee (FAAC), which was held in January, 2014.

Similarly, sale of gas to Nigeria Liquified Natural Gas (NLNG) to the tune of $235,685,861 was not paid to the federation account, rather, was transferred to some undisclosed Escrow accounts. “Relevant documents were not made available for verification,” AGF noted in the report.

The report also indicates that acquisition and payment of N3,630,000,000 property was made without a Certificate of Occupancy (CofO).

It was alleged in the report that a total payment, amounting to N73,547,759,436 was made, contrary to established purpose of the funds.

“The sum of N36,432,423,968.73 was released to the Office of the National Security Adviser (NSA) for the rehabilitation and construction of dams instead of the Federal Ministry of Water Resources.

“The sum of N2,894,531250.00 was spent for the procurement of hand sanitizers for schools anc critical public places.

“The sum of N31,324,952,239.87 was payment of subsidy on fertilizer and youth employment in agricultural programmes.

“The sum of N2,395,851,978.00 was payment for group Life Assurance Premium for Armed Forces budget in 2013, but not backed. The sum of N500,000,000 was made as payment for agricultural programmes.

“These were variances with the purpose of the fund. No evidence of these lines of expenditure in the 2014 Appropriation Act,” the AGF revealed in the report.

Ironically, the management of the National Assembly, headed by the Clerk, made payments of N9,514,568,222.62, without raising payment vouchers. According to the AGF, the management of the National Assembly violated the nation’s financial regulation.

In the same period under review, personal advances were granted to 112 staff of the National Assembly from recurrent votes and 50 members of staff from general service votes from July to December, 2014 for various purposes, all amounting to N1.162,009,305.00.

In the audit report, the AGF revealed how the Embassy of Nigeria in Washington DC, United States of America, realized Internally Generated Revenue (IGR) between 2012 and March 2015, but expended the whole amount on sundry expenses. The said amount is $3,705,428.00.

The audit report indicted the leadership of the Nigerian Prisons Service. The AGF in the report said Pay As You Earn (PAYE) tax of N2,036,758,176.75 was deducted and said to be remitted to Federal Inland Revenue Service (FIRS). According to the report, there is no evidence of remittance and nothing was produced for audit confirmation.

The Attorney- General in another report presented to the Clerk of the National Assembly, declared that ghost workers would remain on government payroll if the current management of the Integrated Personnel Payroll Information Systems was not immediately checked by the appropriate authorities.

He alleged that unidentified staff of Soft Alliance Limited, the software developers, have unhindered access to the data base and usually set up new users and change live data, from time to time.

He told reporters after presenting his reports that the password controls for access to IPPIS are not adequate because the database can be accessed remotely through the Internet.

He said that the password to access the IPPIS database does not expire after 90 days hence making it possible for retired government officers to use their password after leaving office.

He also expressed concern that some usernames and passwords were shared by several users and that most of them used words like ‘consultant’ or ‘technical’ with no restriction on the number of sign-in attempts.

He said, “The audit trail for the IPPIS has not been enabled and that as a result, it is not always possible to trace which user made particular inputs or changes. For example, fraudulent transactions cannot be traced to a particular user.

“Application controls have not been activated in IPPIS to ensure, that gross pay is input from salary and allowance tables, rather than the actual amounts being input directly.

“Completeness checks are not activated to ensure that all necessary data like the bank account number, grade level, and job title, have been entered.

“Duplicate checks to determine that the bank account numbers or employee numbers or employee numbers are not used by one than one payee.

“Reasonableness checks not activated so that an officer’s age less than 18 years can be still paid while user profiles are not adequately restricted, hence an officer in one MDA can amend the payroll data for other MDAs.

“The ability to create new users on the system is not adequately protected and restricted to a few ‘super users'”

Ukura lamented that the his office had as a result of the anomalies, discovered that about N330m was paid to 300, 000 without following approved salary scale while double payments of about N30m was paid within three months.

He added that the imperfections in the IPPIS system had made the country to lose another huge sums of money with the payment of N12m each to 40 members of staff who were not included in the payroll of the relevant MDAs.

Ukura also explained that 152 officers on IPPIS did not have personnel files in their MDAs while N193m paid to unidentified persons.

Apart from this, he explained that N1.163m was paid to were paid to 596 employees with income tax deductions from April 2012 to September 2013 and that 2, 000 employees had no pension deductions.