Auditor-General’s report indict NLS over misappropriation of funds

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The Auditor-General of the Federation, Aghughu Adolphus has indicted the Council of Legal Education, operators of the Nigerian Law School over unlawful spending that runs into billions of naira, and recommending severe sanctions against the Director General.

In its report to the National Assembly titled : AUDITOR-GENERAL FOR THE FEDERATION’S ANNUAL REPORT ON NONCOMPLIANCE/INTERNAL CONTROL WEAKNESSES ISSUES IN MINISTRIES, DEPARTMENTS AND AGENCIES (MDAs) OF THE FEDERAL GOVERNMENT OF NIGERIA FOR THE YEAR ENDED 31 DECEMBER, 2019,of which the Nigerian Law School is a part, examined the books of the legal education institution and indicted the school.

The cover note for the 490 page report stated: “In accordance with Section 85(2) and (4) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended), I have the pleasure to submit to the National Assembly, two (2) copies of the Auditor-General for the Federation’s Annual Report on Non-compliance/Internal Control Weaknesses Issues in Ministries, Departments and Agencies (MDAs) of the Federal Government of Nigerian (FGN) for the year ended 31st December, 2019;

You are kindly invited to note that the Auditor-General for the Federation’s Annual Report on the Federal Government of Nigerian (FGN) Consolidated Financial Statements for the year ended 31 December, 2019 were forwarded on 18 August, 2021 in compliance with Section 85(5) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) to the Clerk to the National Assembly.

3.Please, accept the assurances of my highest regards always”. It was signed by Mr Aghughu, Adolphus, the Auditor General.

Pages 302 to 314 of the report dealt with the administration of the Law School, and raised 11 issues where the administration was indicted. Although the management was given the opportunity to respond, the report still recommended various sanctions, including refund of mismanaged funds.For instance, the school was indicted for non-remittance of 25 percent of Internally Generated Revenue to government, which amounted to N362.7 million.

The report stated: “Council realized the sum of 1,551,756,960.47 (One billion, five hundred and fifty one million, seven hundred and fifty six thousand, nine hundred and sixty naira, forty seven kobo) as Internally Generated Revenue for 2019.

ii.The sum of 387,939,240.11 (Three hundred and eighty seven million, nine hundred and thirty nine thousand, two hundred and forty naira, eleven kobo), being 25% of the amount realized was expected to be remitted to the Consolidated Revenue Fund (CRF), and

iii.The Council remitted the sum of 25,192,953.25 (Twenty five million, one hundred and ninety two thousand, nine hundred and fifty three naira, twenty five kobo), leaving unremitted balance of N362,746,286.86 (Three hundred and sixty two million, seven hundred and forty six thousand, two hundred and eighty six naira, eighty kobo)”.

The management responded thus: “The sum of 25,192,953.25 was paid to Consolidated Revenue Fund (CRF) of the Federal Government for the period. The allocation from the Federal Government is not sufficient to run the Institution, therefore remitting 25% of the institution’s revenue will jeopardize its operations. As one of the federal Institutions, the Nigerian Law School has many financial obligations which are not provided for in the budget line and well beyond the capacity of the School’s Overhead Allocation”.

Below is the full report on the Council:

COUNCIL FOR LEGAL EDUCATION (NIGERIA LAW SCHOOL, BWARI-ABUJA)

At the Council for Legal Education, Bwari, Abuja, the following observations were made:

ISSUE 1: PAYMENTS MADE WITHOUT RELEVANT SUPPORTING DOCUMENTS(= 182,366,477.08)

Paragraph 603(i) of the Financial Regulations states “All vouchers shall contain full particulars of each service, such as dates, numbers, quantities, distances and rates so as to enable them to be checked without reference to any other documents and will invariably be supported by relevant documents such as local purchase orders, invoices, special letters of authority, time sheets, etc.”

Audit observed that:

iThirty-two (32) contractors were paid the sum of 182,366,477.08 (One hundred and eighty two million, three hundred and sixty six thousand, four hundred and seventy seven naira, eight kobo) in 2019, and

  1. The above payments were made without attaching relevant documents such as: Payment Receipts, Invoices, Quotations, Certificates of Job Completion, Requisition/Memo, Bill of Quantity (BOQ), Bidding Documents to the payment vouchers to justify efficient use of the funds.

The above anomalies could be attributed to weaknesses in the internal control system at the Council for Legal Education, Bwari.

Risks

  1. Payments for jobs not executed.
  2. Loss of public funds.

iii. Diversion of public fund

Management’s Response

All supporting documents in respect of the above-mentioned payments i.e. the payment receipts, invoices, bidding documents, job completion certificates, acceptance letters, etc. are complete and intact and are now available for further inspection and audit scrutiny. They were filed away in user departments when the auditors visited because of their bulky nature.

Recommendations

The Director-General is requested to:

  1. Furnish reasons why payments were made without relevant supporting documents attached to payment vouchers as required by extant regulations.

i Account for 182,366,477.08 (One hundred and eighty-two million, three hundred and sixty six thousand, four hundred and seventy seven naira, eight kobo).

iii. Recover and remit the sum of 182,366,477.08 to the Treasury.

  1. Forward evidence of remittance to the Public Accounts Committees of the National Assembly, and
  2. Otherwise, apply sanctions relating to irregular payment and gross misconduct specified in paragraphs 3106 and 3129 of the Financial Regulations respectively.

ISSUE 2: FOREIGN TRAVELS WITHOUT APPROVAL FROM HEAD OF SERVICE OF THE FEDERATION OR SECRETARY TO THE GOVERNMENT OF THE FEDERATION (=51,227,399.00)

 Establishment Circular Ref No. HCSF/CSO/HRM/Pol.1402/1 of 22 January, 2015 states “…proposal for participation or attendance of International Conferences, Seminars, Workshops, Study Tours, Trainings, Presentation of Papers, Negotiating/signing of Memoranda of Understanding (MOU) abroad at Government expenses, shall no longer be allowed except those that are fully funded by sponsoring /inviting Organizations. No Ministry, Extra-Ministerial Office, Department, Agency or Parastatal shall send staff outside Nigeria for training at Government expense whether or not that Agency draws funds from the Federal Government Budget or meets its financial needs from revenue generated by itself.”

Audit observed that:

Eight (8) officers of the Council embarked on a foreign travel on Global Alliance for Justice Education (GAJE) World-Wide in Indonesia for which the sum of 27,959,971.00 (Twenty-seven million, nine hundred and fifty-nine thousand, nine hundred and seventy-one naira) was expended vide Payment Voucher No 1162/19 of 4 December 2019.

  1. Another seven (7) officers of the Council embarked on journeys to London, Togo and Egypt for various conferences, for which the sum of 23,267,428.00(Twenty-three million, two hundred and sixty-seven thousand, four hundred and twenty-eight naira) was expended.

iii. In all, a total of 51,227,399.00 (Fifty-one million, two hundred and twenty seven thousand, three hundred and ninety nine naira) was expended on foreign trips, and

  1. Copies of letter of approval from the Secretary to the Government of the Federation or from the Head of Civil Service of the Federation, authorizing the journeys were not produced for scrutiny.

The above anomalies could be attributed to weaknesses in the internal control system at the Council for Legal Education, Bwari.

Risks

  1. Waste of government funds.
  2. Payment for journey not embarked on.

Management’s Response

In the case of Academic Institutions, plan for International Conferences and other International engagements are not feasible as they often occur impromptu.

Recommendations

The Director-General is requested to:

  1. Furnish reasons for paying for foreign trips without approval as required by extant regulations.
  2. Provide Letter of approval from the Secretary to the Government of the Federation or from the Head of Civil Service of the Federation approving conference attendance to eight (8) officers on Global Alliance for Justice Education (GAJE) World-Wide in Indonesia in which the sum of 27,959,971.00 was expended vide Payment Voucher No. 1162/19 of 4 Dec., 2019;

iii. Provide Letter of approval from the Secretary to the Government of the Federation or from the Head of Civil Service of the Federation approving conference attendance to seven (7) officers on journeys to London, Togo and Egypt in which the sum of 23,267,428.00 was expended.

Recover and remit to the Treasury the sum of 51,227,399.00 (Fifty-one million, two hundred and twenty seven thousand, three hundred and ninety nine naira)

  1. Forward evidence of remittance to the Public Accounts Committees of the National Assembly, and
  2. Otherwise, apply sanctions relating to irregular payment and failure to managepublic funds effectively specified in paragraphs 3106 and 3115 of the Financial Regulations respectively.

ISSUE 3: 

PAYMENT VOUCHERS NOT PRESENTED FOR AUDIT INSPECTION (=140,864,834.76)

Paragraph 110 of the Financial Regulations states “By virtue of the responsibilities and the functions of Accountant-General and Auditor-General or their representatives shall, at all reasonable times, have free access to the books of accounts, files, safes, security documents and other records and information relating to the accounts of all federal ministries/ extra-ministerial offices and other arms of government or units. They shall also be entitled to require and receive from members of the Public Service. Such information, reports, and explanations as they may deem necessary for the proper performance of their functions”.

Audit observed that:

i.The sum of 140,864,834.76 (One hundred and forty million, eight hundred and sixty-four thousand, eight hundred and thirty four naira, seventy six kobo) was paid in 2019 for various expenditure as shown in the cash book through forty (40) payment vouchers. 

ii.None of the payment vouchers was presented for examination thus making it difficult for the audit to validate the payments.

The above anomalies could be attributed to weaknesses in the internal control system at the Council for Legal Education, Bwari.

Risks

  1. Misappropriation of public funds.
  2. Payment for goods not supplied or services not rendered.

iii. Diversion of public funds.

Management’s Response

The payment vouchers were misfiled by officers who worked on the payment vouchers before the arrival of the audit team and have now been assembled for audit examination. Auditors are hereby invited back to the school to verify and examine the vouchers.

Recommendations

The Director-General is requested to:

i.Furnish reasons why payment vouchers were not made available for examination.

ii.Account for the sum of 140,864,834.76 (One hundred and forty million, eight hundred and sixty-four thousand, eight hundred and thirty four naira, seventy six kobo) expended without raising payment vouchers.

iii.Recover and remit the sum of 140,864,834.76 to the Treasury.

iv.Forward evidence of remittance to the Public Accounts Committees of the National Assembly, and

v.Otherwise, apply sanctions relating to irregular payment and gross misconduct specified in paragraphs 3106 and 3129 of the Financial Regulations respectively.

ISSUE 4: 

NON-REMITTANCE OF STATUTORY 25% OF INTERNALLY GENERATED REVENUE TO GOVERNMENT (=362,746,286.86)

The Federal Ministry of Finance Circular No. BO/RVE/12235/Vii/201 dated 11 November 2011 states “All Federal Agencies/parastatals should limit their annual budgetary expenditure from internally generated revenue to not more than 75% of their gross revenue while the remaining 25% are to be remitted to the coffers of the Federal Government through Consolidated Revenue Fund (CRF). Therefore, heads of agencies are to ensure prompt remittance of their operating surplus into the Consolidated Revenue Fund as required by the provisions of the Fiscal Responsibility Act 2007”. Also, Financial Regulations 236 states “Revenue paid into Revenue Accounts for Internally Generated Revenue (IGR) of MDA’s shall be transferred to the CRF on or before the 15 of the month following the month of collection of Revenue.”

Audit observed that:

i.The Council realized the sum of 1,551,756,960.47 (One billion, five hundred and fifty one million, seven hundred and fifty six thousand, nine hundred and sixty naira, forty seven kobo) as Internally Generated Revenue for 2019.

ii.The sum of 387,939,240.11 (Three hundred and eighty seven million, nine hundred and thirty nine thousand, two hundred and forty naira, eleven kobo), being 25% of the amount realized was expected to be remitted to the Consolidated Revenue Fund (CRF), and

iii.The Council remitted the sum of 25,192,953.25 (Twenty five million, one hundred and ninety two thousand, nine hundred and fifty three naira, twenty five kobo), leaving unremitted balance of N362,746,286.86 (Three hundred and sixty two million, seven hundred and forty six thousand, two hundred and eighty six naira, eighty kobo).

The above anomalies could be attributed to weaknesses in the internal control system at the Council for Legal Education, Bwari.

Risks

i.Loss of government revenue

ii.Diversion of public funds.

Management’s Response

The sum of 25,192,953.25 was paid to Consolidated Revenue Fund (CRF) of the Federal Government for the period. The allocation from the Federal Government is not sufficient to run the Institution, therefore remitting 25% of the institution’s revenue will jeopardize its operations. As one of the federal Institutions, the Nigerian Law School has many financial obligations which are not provided for in the budget line and well beyond the capacity of the School’s Overhead Allocation.

Recommendations

The Director-General is requested to:

i.Furnish reasons why 25% of Internally Generated Revenue was not remitted to the CRF in obedience to the law of the Federal Republic of Nigeria,

ii.Recover and remit the sum of 362,746,286.86 (Three hundred and sixty-two million, seven hundred and forty six thousand, two hundred and eighty six naira, eighty kobo) to the CRF.

iii.Forward evidence of remittance particulars to the Public Accounts Committees of the National Assembly, and

iv.Otherwise, apply sanctions relating to failure to collect and account for Government Revenue specified in paragraph 3112 of the Financial Regulations.

ISSUE 5: 

CONTRACT AWARD WITHOUT DUE PROCESS (=891,367,842.31)

Section 20 (2) of the Procurement Act 2009 states “The accounting officer of every procurement entity have overall responsibility for the planning of, organization of tenders, evaluation of tenders and execution of all procurements and in particular shall be responsible for (a) ensuring compliance with the provisions of this Act by his entity…”

Audit observed that:

i.Sixty-five (65) payments totaling 891,367,842.31 (Eight hundred and ninety one million, three hundred and sixty seven thousand, eight hundred and forty two naira, thirty one kobo) were made to contractors for supplies and renovations, and

ii.The above contracts were not advertised and there were no bid documents or other relevant information attached to the vouchers to ascertain that there was open competitiveness and fairness in its awards and selection of the contractors as enshrined in the Procurement Act of 2007.

The above anomalies could be attributed to weaknesses in the internal control system at the Council for Legal Education, Bwari.

Risks

i.Payment for job not executed

ii.Diversion of public funds.

Management’s Response

Due procedure in consonance with Public Procurement Act 2007, including advertisements for projects included in the 2019 Appropriation Act were observed in the award and execution of the contracts. The various minutes and documentations of the Council of Legal Education Tenders Board are now available for audit inspection.

Moreover, the contract was successfully executed in accordance with the guidelines stated in the award letter. However, audit recommendations are well noted as infractions against the Public Procurement Act will not be allowed regardless of extraneous pressures.

Recommendations

The Director-General is requested to:

i.Furnish reasons why contracts were awarded without due process as required by extant regulations

Account for the sum of 891,367,842.31 (Eight hundred and ninety-one million, three hundred and sixty-seven thousand, eight hundred and forty-two naira, thirty-one kobo).

iii.Recover and remit to the Treasury, the sum of 891,367,842.31 

iv.Forward evidence of remittance to the Public Accounts Committees of the National Assembly, and

v.Otherwise, apply sanctions relating to irregular award of contracts specified in paragraph 3117 of the Financial Regulations.

ISSUE 6: 

CONTRACT AWARD AND PAYMENT MADE WITHOUT TAX DEDUCTION (= 12,883,176.47)

Paragraph 234(i) of the Financial Regulations states ”It is mandatory for Accounting Officers to ensure full compliance with the dual roles of making provision for the Value Added Tax (VAT) and With-holding Tax (WHT) due on supply and services contract and actual remittance of the same”.

Similarly, Financial Regulation 235 states “Deductions for WHT and VAT shall be remitted to the Federal Inland Revenue at the same time the payee who is the subject of the deduction is paid.”

Audit observed that:

i.The sum of 72,057,150.00 (Seventy two million, and fifty seven thousand, one hundred and fifty naira) was paid to contractors for supply of diesel.

ii.Value Added Tax (VAT) amounting to 3,751,770.00 (Three million, seven hundred and fifty one thousand, seven hundred and seventy naira) and Withholding Tax (WHT) amounting to 413,820.00 (Four hundred and thirteen thousand, eight hundred and twenty naira) were not deducted from the payments to contractors,

iii.1% Stamp Duty was not deducted from one hundred (100) payment vouchers with a contract sum of 871,758,647.18 (Eight hundred and seventy-one million, seven hundred and fifty eight thousand, six hundred and forty seven naira, eighteen kobo) resulting to overpayment to contractors of N8,717,586.47 (Eight million, seven hundred and seventeen thousand, five hundred and eighty-six naira, forty seven kobo) for Stamp Duty (= 100 x N871,758,647.18), and

iv.The totality of non deduction of statutory taxes was 12,883,176.47 

(=3,751,770.00 + 413,820.00 + 8,717,586.47)

The above anomalies could be attributed to weaknesses in the internal control system at the Council of Legal Education, Bwari.

Risks

i.Loss of revenue to the government.

ii.Difficulty in funding budget.

Management’s Response

The list of items of expenditure (Diesel & Gas) listed here are on Tax Exemption Lists. The sum of 413,000.00 charged or deducted as Withholding Tax (WHT) has been remitted. However, the sum of 8,717,586.47 stamp duty tax will be remitted in due course.

Recommendations 

The Director General is requested to:

i.Provide reasons why statutory taxes were not deducted from payment to contractors as required by extant regulations.

ii.Remit the sum of 12,883,176.47 (Twelve million, eight hundred and eighty three thousand, one hundred and seventy-six naira, forty-seven kobo) to appropriate tax authorities.

iii.Forward evidence of remittance particulars to the Public Accounts Committees of the National Assembly, and

iv.Otherwise, apply sanctions relating to failure to collect and account for Government Revenue specified in paragraph 3112 of the Financial Regulations.

ISSUE 7: 

UNAUTHORIZED PAYMENT OF NON-REGULAR ALLOWANCES 

(=186,840,944.25)

Establishment Circular Ref No. SWC/S/04/5.167/216 dated 12 February 2004 requires all Federal Government Parastatals and Agencies wishing to monetize their fringe benefits to submit the proposal package to the National Salaries, Incomes and Wages Commission for necessary evaluation and approval before implementation.

Audit observed that:

i.Payments amounting to 186,840,944.25 (One hundred and eighty-six million, eight hundred and forty thousand, nine hundred and forty-four naira, twenty-five kobo) were made on twenty-eight (28) payment vouchers to various staff as allowances in 2019.

ii.The above allowances included provisions allowance, sitting allowance and other non-regular allowances to staff of the Council. 

iii.The sitting allowance was paid for holding day-to-day committee meetings for which the officers receive salaries, and

iii.Approvals for the payment of these allowances were not obtained from the 

National Salaries, Incomes and Wages Commission (NSIWC).

The above anomalies could be attributed to weaknesses in the internal control system at the Council for Legal Education, Bwari.

Risks 

  1. Waste of public funds.
  2. Remuneration may be higher than the productivity level of staff.

Management’s Response

The allowance on honorarium paid for marking after resit examination is approved by the Council of Legal Education, while those within the approval limit of the accounting officer is paid to deserving staff in the course of work. The expenses (non-regular allowances) were incurred on the day activities and operations of the officers in the accounts section to avoid such lapses in future engagements. However, going forward reference will be made to the Public Service Rules and National Salaries, Income and Wages Commission circular before such allowances are allowed in future.

Recommendations

The Director General is requested to:

i.Furnish reasons for the payment of non regular allowances without approvals by NSIWC.

ii.Recover and remit the sum of 186,840,944.25 (One hundred and eighty-six million, eight hundred and forty thousand, nine hundred and forty-four naira, twenty-five kobo) to the Treasury.

iii.Forward evidence of remittance particulars to the Public Accounts Committees of the National Assembly, and

iv.Otherwise, apply sanctions relating to irregular payment specified in paragraph 3106 of the Financial Regulations.

ISSUE 8: 

ITEMS NOT TAKEN ON STORE LEDGER CHARGE (= 83,128,449.27)

Paragraph 2402(i) of the Financial Regulations states “On all payment vouchers for the purchase of stores, except as provided in sub-section (ii) of this regulation, the storekeeper must certify that the stores have been received and taken on charge in the stores ledger quoting the stores receipt voucher number and attaching the original copy of the store receipt voucher to the original L.P.O.” Also, Financial Regulation 2414 states in part that “All issues of stores shall be supported by a Stores Issue Voucher.”

Audit observed that:

i.Store items totaling 83,128,499.97 (Eighty-three million, one hundred and twenty eight thousand, four hundred and ninety-nine naira, ninety-seven kobo) procured through ten (10) payment vouchers were not taken on store ledger charge, and 

ii.There were no Store Receipt Vouchers (SRV) and Store Issue Vouchers (SIV) 

found in the store or attached to the payment vouchers made in respect of the supply.

The above anomalies could be attributed to weaknesses in the internal control system at the Council for Legal Education, Bwari.

Risks

  1. Waste of government resources.
  2. Diversion of public funds.

Management’s Response

The store items purchased by the School have always been taken on ledger charge, but the items not taken on charge were those that were procured and used on the site. Store Receipt Vouchers (SRV) issued were kept away in user departments instead of attaching them to various payment vouchers. However, all the relevant store receipts vouchers have now been attached to the various vouchers for audit verification.

Recommendations:

The Director-General is requested to:

i.Furnish reasons why store items procured were not taken on store Ledger charge as required by extant regulations.

ii.Account for 83,128,499.97 (Eighty-three million, one hundred and twenty-eight thousand, four hundred and ninety nine naira, ninety seven kobo).

iii.Recover and remit the sum of 83,128,499.97 to the Treasury.

iv.Forward evidence of remittance to the Public Accounts Committees of the 

National Assembly, and

v.Otherwise, apply sanctions relating to irregular payment specified in paragraph 3106 of the Financial Regulations.

ISSUE 9: 

CIRCUMVENTION OF PROCUREMENT PROCEDURES (= 9,089,318.32)

Federal Treasury Circular Ref. No. TRY/A2&B2/2009/OAGF/CAD/026/v of 24th March 2009 states “All Accounting Officers controlling expenditure are to ensure that all procurement of stores and services costing above 200,000.00 shall be made through award of contract”

Audit observed that:

i.Non-personal cash advances totaling 9,089,318.32 (Nine million and eighty nine thousand, three hundred and eighteen naira, thirty-two kobo) were granted to officers of the Council through twenty three (23) payment vouchers. 

ii.In each case, the cash advance to staff was in excess of the approved threshold of 200,000.0, and

iii.Use of advances instead award of contracts resulted to a accumulated loss of 908,931.83 (Nine hundred and eight thousand, nine hundred and thirty one naira, eighty three kobo) revenue that would have accrued to government by way of Value Added Tax (VAT) and Withholding Tax (WHT)

The above anomalies could be attributed to weaknesses in the internal control system at the Council for Legal Education, Bwari.

Risks

  1. Loss of revenue to government
  2. Difficulty in funding budget

Management’s Response

Some of these cash advances related to procurement of some not-the-shelve items and the vendors prefer cash rather than going through the rigours of contract award e.g. purchase of cows for cocktails. Others relate to vendors for service providers whose payment performs cannot seamlessly interface with CBN/Remita payment gateway e.g., DSTV.

Recommendations

The Director-General is requested to:

i.Justify the granting of non personal advances above the threshold of 200,000.00 only.

ii.Recover and remit the sum of 9,089,318.32 (Nine million and eighty-nine thousand, three hundred and eighteen naira, thirty-two kobo) to the Treasury.

iv.Forward evidence of remittance to the Public Accounts Committees of the National Assembly, and

v.Otherwise, apply sanctions relating to irregular payment specified in paragraph 3106 of the Financial Regulations.

ISSUE 10:

UNSPENT BALANCE IRREGULARLY EXPENDED (= 2,408,708,784.91)

Paragraph 415 of the Financial Regulations states “The Federal Government requires all officers responsible for expenditure to exercise due economy. Money must not be spent because it has been voted.” Also, Section 16 of Finance (Control and Management) Act LFN 1990 stipulates that all unexpended income or votes for a financial year shall lapse at the expiration of the year. Consequently, all unspent balances in recurrent expenditure cash book at the end of the financial year must be paid back to the consolidated revenue fund (CRF) account.

Audit observed that:

i.The sum of 2,408,708,784.91 (Two billion, four hundred and eight million, seven hundred and eight thousand, seven hundred and eighty four naira, ninety one kobo) was the closing balance of 2018 which was brought forward to 2019 as opening balance, and

ii.The unspent balance was utilized in 2019 contrary to extant regulations.

The above anomalies could be attributed to weaknesses in the internal control system at the Council for Legal Education, Bwari.

Risks

i.Waste of public funds 

ii.Misappropriation of funds.

Management’s Response

The Nigerian Law School year usually commences around October/November period and the bulk of school fees which makes up most of internally generated revenues (IGR) is collected around that period, which is just before the closure of Federal Government Financial Year of 31 December. It is not practicable to spend a collection of one year within two months and continue afloat for the whole year. Besides, it is difficult to apply this provision in the dispensation of Accrual Accounting where earned income and accrued expenditure may inter-lap between fiscal years. 

The school decided to be proactive in ensuring continuity in the running operation of and avoid shutting down the activities of the school while awaiting the releases of the allocation for the following year. Moreover, due regard was given to economy and efficiency in the utilization of the transferred income.

Recommendations:

The Director-General is requested to:

i.Furnish reasons why unspent balances at year end were not remitted to the Treasury as required by extant regulations.

ii.Remit the sum of 2,408,708,784.91 (Two billion, four hundred and eight million, seven hundred and eight thousand, seven hundred and eighty four naira, ninety one kobo) to the Treasury.

iv.Forward evidence of remittance to the Public Accounts Committees of the National Assembly, and

v.Otherwise, apply sanctions relating to irregular payment and gross misconduct specified in paragraphs 3106 and 3129 of the Financial Regulations respectively.

ISSUE 11: UNAUTHORIZED INVESTMENT OF DONATIONS(=67,000,000.00)

Paragraph 739 of the Financial Regulations states “Idle funds in the Bank Accounts of Ministries, Departments and Agencies shall only be invested in Treasury Bills in accordance with extant circulars.”

Audit observed that:

i.The sum of 67,000,000.00 (Sixty-seven million naira) was invested in a Commercial Bank via a fixed deposit instruction.

ii.Relevant documentary evidence such as Certificate of Investment showing Interest Rate and tenure was not presented for examination.

iii.Approval of the Accountant-General of the Federation on the Investment was not made available for verification, and

iv.Approval of the President of the Federal Republic of Nigeria to operate the 

account with commercial bank outside the Treasury Single Account (TSA) was not presented for scrutiny.

The above anomalies could be attributed to weaknesses in the internal control system at the Council for Legal Education, Bwari.

Risks

i.Loss of revenue to government

ii.Diversion of public funds. 

Management’s Response

Letter has been written to the Accountant-General of the Federation requesting for authority to operate the account outside Treasury Single Account (TSA).

Recommendations

The Director-General is requested to:

i.Furnish reasons for making investment in commercial bank without complying with extant regulations on such investment.

ii.Provide authorization for the investment of 67,000,000.00 (Sixty-seven million naira) in a commercial bank.

iii.Provide approval from the President of the Federal Republic of Nigeria to operate Commercial Bank Account outside Treasury Single Account (TSA);

iii.Recover and remit the sum of 67,000,000.00 with accrued interest to the Treasury.

iv.Forward evidence of remittance to the Public Accounts Committees of the National Assembly, and

v.Otherwise, apply sanctions relating to poor cash management and gross misconduct specified in paragraphs 3115 and 3129 of the Financial Regulations respectively.

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