The House of Representatives Standing Committee on Finance has fingered the Nigerian National Petroleum Corporation (NNPC), Assets Management Corporation of Nigeria (AMCON), Financial Reporting Council (FRC) and the Nigerian Maritime Administration and Safety Agency
(NIMASA) as the biggest defaulting government agencies in remitting operative surpluses into federal government’s coffers at the end of a fiscal year.
The Committee chairman, Hon. Abdulmumin Jibrin (APC, Kano) made the revelation during an oversight visit of the Committee to the Fiscal Responsibility Commission (FRC) headquarters in Abuja yesterday.
Jibrin, who led other committee members, was responding to submissions and complaints earlier made by the acting chairman of the commission, Barrister Victor Muruako, that certain agencies of government are in the habit of looking down on the commission, and hence don’t submit their financial records in respect of remittances of operative surpluses at the end of fiscal year.
“You are mentioning NCC and others, what about the NNPC which is the biggest culprit in this conspiracy against the country? AMCON, NIMASA have all been on our radar for so many years. They claim to be operating at a loss. The rate of non-remittances from the NNPC alone
“As for AMCON and NIMASA they have been claiming to run at a loss year-in year-out, but now that AMCON is making profits from the sale of banks and other businesses, you should follow them up and ask for their financial statements and record of their remittances.
“One other notorious agency which puts up an holier than thou attitude but with a very hazy fiscal behaviour is the Financial Reporting Council. They are doing the job that the Commission should be doing.
Their activities are supposed to be under the radar of the Commission. The Committee has received hundreds of petitions concerning the malfeasance that is going on there. Go after them and make sure that they know their boundaries,” Jibrin charged.
The Fiscal Responsibility Act has made provisions for the return of 80 per cent of the operating surplus to the treasury and the remaining 20 per cent to a General Reserve Fund. This is explicitly stated in the Part 1V of the Act which addresses the budgetary planning of government corporations and related agencies. It says in Sections 22 ,23 and 24 that: “Notwithstanding the provisions of any written law governing the corporation, each corporation shall establish a general reserve fund and shall allocate thereto at the end of each ?nancial year, one-?fth of its operating surplus for the year.
The balance of the operating surplus shall be paid into the Consolidate Revenue Fund of the Federal Government not later than one month following the statutory deadline for publishing each corporation’s accounts.
The Act also classifies the corporation’s surplus as a Federal Treasury Revenue where a corporation’s result is a de?cit, the de?cit shall be classi?ed as the corporation’s loss for the ?scal year; each corporation shall, not later than three months after the end of its ?nancial year, cause to be prepared and published its audited ?nancial reports in accordance with such rules as may be prescribed from time to time.
Meanwhile, Muruako, who briefed the lawmakers, had earlier informed the Committee of the challenges and difficulties his Commission faces as a result of what he called ‘intrinsic loopholes’ in the Fiscal Responsibility Act, a situation which some agencies have taken the
advantage of as an alibi in flouting the law by way of deliberately defaulting in remitting surplusses to the commission as stipulated.
“We need the powers to prosecute and punish offenders of fiscal responsibility. Countries who have gone ahead to make progress in their economies are those who pay adequate attention to their fiscal responsibility regimes. Agencies have succeeded in making government look like an orphan through their attitude towards the Commission in a manner that they doctor their account books using different methods to defraud government”.
“We have had issues with NCC until the Committee intervened and they paid N22.9billion for 2007 and 2010. The last N2billion was paid in April. We are yet to look at their books for 2011 and 2013. Agencies are in the habit of declaring losses even before our team of experts go to check their books. Some of them have formed the habit of not respecting this Commission. NAFDAC has also refused to pay returns, saying that the Commission would soon be closed down”, he said.
He added that NIMASA, which has never been in the habit of paying into the account, also came through last week to pay the sum of N1.3billion into the revenue purse after some engagements.
On the request by Muruako on the need to strengthen the Commission through the provision of adequate budgetary allocation and legislation, Jibrin also stressed that the legislature would assist the Commission to ensure that adequate money is allocated to it in the 2015 fiscal year as well as push for an amendment of its existing Act with a view to empower it to compel recalcitrant agencies for compliance.
In a swift reaction, Mr. Kayode Lambo, head of corporate communications of AMCON said the corporation raised bonds to finance its operations and also redeems the bonds over time. He therefore wondered which money the house is referring to as surplus money that should be remitted to the government’s coffers.
It will be recalled that AMCON on Tuesday announced the completion of the scheduled redemption of the AMCON Series V N976.042 billion Zero Coupon Bonds which was due on October 2014 at par.
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