The Auditor-General of the Federation has detailed how the Michael Okpara University of Agriculture, Umudike (MOUAU), in Abia State, committed financial violations amounting to N6.5 billion between 2021 and 2022.
The report, submitted to the National Assembly and released in September, showed that the university made N5.9 billion in questionable payments, including the award of contracts above the threshold, unapproved payments, circumvention of procurement procedures, and payments for projects that were not executed.
The report also noted that the university failed to remit over N578 million Internally Generated Revenue (IGR) to the federal government’s Consolidated Revenue Fund (CRF).
Some of the violations listed in the report include over two billion naira for contracts that violated the Public Procurement Act (PPA), N1.2 billion in extra-budgetary expenses, N40 million overpayment of severance allowance to the former vice-chancellor, N64 million unapproved payment for Christmas and Sallah gifts to staff, and N30 million for a project not executed.
The report also found that the vice-chancellor had personalised university vehicles and that the university had split single contracts into multiple parts to circumvent procurement laws.
In more than 800 pages, the audit report chronicled the non-compliance and internal control weaknesses of the government’s Ministries, Departments and Agencies (MDAs).
For the Michael Okpara University of Agriculture, Umudike, the report identified 32 instances of non-compliance, totalling over six billion in questionable payments and unremitted revenues to the federal government.
These infractions violated several sections of the Financial Regulations Act of 2009, the Nigerian Constitution, several circulars issued by the Secretary to the Government of the Federation (SGF), the National Salaries, Incomes and Wages Commission (NSIWC), and the Office of the Head of the Civil Service (OHCS).
The university management failed to respond to the auditor’s request for clarification, the report said.
● N1.8 billion contract without due process
The university is mandated by the Public Procurement Act (PPA) 2007 to request quotations from at least three unrelated contractors or suppliers before awarding a contract.
However, the audit report found that it violated the law in 62 contracts awarded between February and December 2021.
“Evidence of advert placement on at least two National Newspapers as required under section 25(2) (i) of the Public Procurement Act, 2007, was not provided,” the auditor’s report stated.
“No bill of quantity to determine the scope of work carried out and materials used, and minutes of Tender Board’s meeting to show the evidence of approval for the contracts were not presented for audit.”
● N1 billion extra budgetary expenses
According to the Appropriation Act, the university is meant to spend only N1.2 billion out of its IGR.
However, the university spent N2.3 billion, amounting to over N1 billion in extra-budgetary expenditure.
This expenditure violates paragraph 301 of the financial regulations, which directs that no expenditures be made outside of the appropriation act, the report added.
● N578 million unremitted IGR
The report also showed that the university failed to remit N578 million (N578,957,098.08) to the federal government coffers as mandated by the Financial Regulations Act of 2009.
According to the report, the university generated a N2.3 billion IGR in 2021 but failed to remit the required 25 per cent, which amounted to N578 million to the CRF as at the time of the audit in 2022.
“Revenue paid into the Revenue Accounts for IGR of MDAs shall be transferred to the CRF before the 15th of the Month following the month of collection of the Revenue,” paragraph 236 of the law states.
Additionally, a 2016 treasury circular directed all partially-funded government agencies, including the universities, to limit their annual budgetary expenditure to no more than 75 per cent of their gross revenue, and remit the 25 per cent to the CRF or pay 80 per cent of their operating surplus computed according to the approved template to the CRF, whichever is higher.”
Extra N44 million as severance allowance for VC
The university also paid the former vice-chancellor a N49 million severance allowance, despite his entitlement to only N5 million.
The audit report did not specifically mention the vice-chancellor affected.
The report provided a breakdown of the N49.9 million payment made to the vice-chancellor, as follows: N20 million as a parting gift, N11.4 million as monetised leave, N15.5 million as 28-day overseas leave, and N2.9 million as a return ticket while on sabbatical leave.
“The amount due to the former vice chancellor as severance allowance was N5,777,595.00, thereby resulting in an over-payment of N44,183,895.27,” the report said.
“There was no justification for paying the former vice-chancellor severance allowance far above what should have been paid.”
●VC personalised official vehicles
According to the auditor’s report, the university purchased six new vehicles for N244.2 million to be used by four university officers.
While some of the officers assigned to these vehicles had retired from service, the university did not retrieve them from the officers, according to the report.
The report noted that the current vice chancellor also converted two official vehicles, which he had used as deputy vice chancellor, into his own personal vehicles without making an outright purchase or following due procedure for disposing of government assets.
● N275 million against procurement procedures
The audit report also found that the university circumvented procurement procedures to make 267 payments totalling N275 million as non-personal advances between September 2020 and August 2022 for purchases and other services.
“Each of the 267 payments was above the N200,000 threshold, contrary to the provisions of extant regulations,” the report stated, adding it resulted in the loss of N37 million in withholding tax, value-added tax and stamp duty revenues.
● N6 million for unapproved overseas travel
The university also made two payments totalling N6.1 million for foreign trips without approval from the SGF or the Head of the Civil Service of the Federation.
The university also failed to provide evidence of travel, such as certificates of attendance for a conference or workshop, air tickets or stamped international passports for the trip, “making it difficult to authenticate the validity, genuineness, and correctness of the payments.”
This violated a 2019 circular, which mandated that all government-funded travels must be approved by the SGF or the Head of Service and the documentary evidence must be provided for the trips, the report stated.
● N44 million unauthorised salary arrears payment from IGR
Without approval from the finance ministry of the National Assembly, the university made an out-of-budget payment of N44.6 million as salary arrears from the IGR.
“There was no budgetary provision for payment of salary arrears of staff of the university in the 2021 appropriation,” the auditor said.
The payment, according to the Auditor-General, violated Section 80 of the 1999 Constitution and Paragraph 417 of the FR 2009.
While the constitution directed that all expenses must be in the manner prescribed by the National Assembly through the budgets, the financial regulation states that all expenditure must be “in accordance with the estimate, and votes must be applied only to the purpose for which the money is provided.”
● Paid consultant without evidence of beneficiaries
The university also paid N45 million to a consultant on 26 January 2022 for land and crop compensation to the land donors and other stakeholders.
The university failed to provide the names and particulars of the said beneficiaries, as well as other relevant details.
“There was no evidence of proper enumeration to show the number of land owners and crops affected, and the cost required to compensate each beneficiary,” the report said.
● Payment for jobs not executed
The auditor-general’s report also found that the university paid N30.5 million for items that were never supplied and services that were never rendered to the university on 16 August 2021.
According to the report, the university awarded two contracts for the rehabilitation of the vice-chancellor’s lodge – one for N37.8 million and the other for N49.8 million– amounting to N87.6 million.
However, the auditor’s physical verification revealed that items worth N25.5 million and N5 million were not delivered according to the bill of quantities for both contracts.
The items not delivered include “window and nets, Panasonic 2HP split air conditioner, replacement of gate finishing, furnishing of lounge/living room, imported leathers of seven 7-seaters, main sitting room, children’s room, electronics, and visitors’ room.”
The auditor also found that the university made 230 payments totalling N242.5 million to various companies for services without receipts, vouchers, or job competition certificates.
“Relevant supporting documents such as store receipt vouchers, invoices, job completion certificates, certificates of attendance, etc., were not attached to the payment vouchers,” the report said.
The university also used N37.7 million allocated for capital expenditures for recurrent expenditures, including payments for hotel accommodation and council allowances, without justification.
The report also noted that the university made N9.9 million payment of peculiar and telephone allowances to staffers outside of the centralised payroll system, the Integrated Personnel Payroll Information System (IPPIS).
“Approval(s) for the payments from National Salaries, Incomes and Wages Commission (NSIWC) were not made available for examination,” the auditor’s report added.
● Violation of NITDA law
The university paid N187 million to six contractors for the procurement of various Information and Communication Technology (ICT) related services.
The procurement violated the National Information Technology Development Agency (NITDA) Act, which directed all MDAs to obtain approval from NITDA for the implementation of IT projects and procurement.
● Contract splitting to circumvent thresholds
The auditor-general’s report found that the university split single contracts to circumvent thresholds set by the country’s laws.
For instance, it stated that the university purchased two brand-new Toyota Land Cruisers from the same contractor for a total of N97.2 million each.
However, instead of making it a single contract, it was split into two to lower the cost and fit within the threshold of the university’s tender board.
●Training without evidence
The university also paid N55 million to a consultant for training participants in agricultural business and empowering women and youth in fishery, cassava, and palm oil in Ohaji/Oguta, Orlu West, Imo State.
However, there is no evidence of execution, such as a list of participants, location, venue or date of training, the auditor’s report said.
Meanwhile, the university also paid N102.2 million to 16 companies for contracts that were above the approval thresholds of the university’s tender board.
According to the report, the sum was paid between 12 March 2021 and 14 December 2021.
“The amount of the contract was above the approval threshold of the university’s tender board,” the report said.
● N242 million unrecovered cash advance
The auditors also found that the university paid N242 million in cash advances and imprests to some staff members between 4 January 2021 and 10 December 2021.
The report stated that some of the advances were granted above the N200,000 threshold specified in existing regulations.
“The advances/imprests remained unretired at the time of the audit in 2022,” the report said.
“There was no adequate effort in place by the university to recover the funds from the affected staff.”
The university also under-deducted N5 million withholding taxes for three payments of N101 million.
●Extra-budgetary expenditures
The university paid N19.9 million for vehicle insurance in 2021. However, no funding was appropriated for this in the 2021 Appropriation Act.
This violates paragraph 301 of the Financial Regulations Law, the report said.
The university also spent N476.2 million for the purchase of store items. However, the auditor noted that there was no evidence that the items supplied were recorded in the store ledger.
● N63 million contract without due diligence
The report also accused the university of paying N63 million as 15 per cent mobilisation fees to seven companies for contracts without performing due diligence.
“There was no evidence that the university performed due diligence on the advance payment guarantee (APG) presented by the contractor before payments, and the genuineness and accuracy of the amounts paid to the contractors in relation to the APG presented could not be verified as at the time of audit,” the report said.
●N255 million contracts above threshold
On 4 February 2021, the university awarded a contract for the online integrated dynamics database for university personnel, students, records and results for N170 million. The university also awarded another contract for the supply of motor vehicles for N85.4 million.
However, the contracts exceeded the approval threshold of the parastatal tenders board at the university.
“There was neither evidence of approval by the ministerial tenders board nor the contracts files provided for audit,” the report stated.
N185 million contracts without relevant documents
The report also stated that the university paid N185.7 million to nine contractors for works and services between January 21 and October 2, 2021, without providing supporting documents, such as award letters, job completion certificates, and bills of engineering measurement and evaluation.
“Determining whether the contracts were executed in accordance with the specification was practically not achievable by audit,” the report stated.
● Contracts violating the procurement process
The university also made N166.2 million to 23 contractors for supplies and renovation works without advertising the projects, directly violating procurement laws.
“The contracts were not advertised and there were no bid documents or other relevant information attached to the paid vouchers as evidence of open competitiveness and fairness in its awards and selection of the contractors,” the report said.
The university also paid N12.2 million to six beneficiaries for logistics and transportation support, without specifying the purpose, nature, or location, or for which event.
●N49 million payment above threshold
The university paid N49 million as a cash advance for the procurement of books and examination materials.
The report noted that the payment exceeded the approved threshold and resulted in a loss of N6.7 million in Value Added Tax (VAT), Withholding Tax, and Stamp Duty.
●Contravention of labour law
The university also violated labour laws when it engaged casual workers and paid them N5 million. The report explained that the engagement should have been contracted out, rather than the university engaging casual workers.
●Violation of e-payment policy
In violation of the federal government’s policy on electronic payments, the university paid N294 million to 19 staff members whose names differed from those of the supposed beneficiaries of the payments.
“There were no documents to show acknowledgement by the supposed beneficiaries evidencing receipt of the funds from the officers concerned,” the report stated.
● N42 million payment to contractors without justification
The university also made N42.4 million in 13 payments to contractors without justification.
According to the report, the payments included some unaccounted items in the contracts’ Bill of Engineering Measurement (BEME).
The report listed them as follows: N34.9 million as the preliminary lump sum; N2.7 million as Administrative Expenses; N3.4 million as the Provision Lump Sum; and N1.3 million for the provision of three laptops.
“The items included in the BEME were not accounted for after the projects had been completed,” the auditor’s report said. “There was no evidence of utilisation of the amounts to justify its description as costs that were incurred towards the execution of the projects.”
● Violation of e-payment policy
The university also violated the federal government’s electronic payment rules when it paid an N11.6 million honorarium intended for non-staff members to its staff.
“There were no documents to show acknowledgement by the supposed beneficiaries evidencing receipt of the honorarium from the officers concerned,” the report stated.
[PREMIUM TIMES]
