NSITF: Alleged N87Bn Misappropriation – AuGF Issues 50 Audit Queries

…Fingers undue ministerial interferences 

Following alleged mismanagement of N87 billion without procedural approval and or evidence of expenditures, the Office of the Auditor General of the Federation has issued 50 audit queries against the Nigeria Social Insurance Trust Fund (NSITF).

This was as the audit report specifically queried what it described as “undue ministerial interference” in the management of the finances of the Fund which is clearly in violation of government circular number ECD/P/230 of 18th October, 1996.

The circular prohibits supervising ministries from interfering in the finances of agencies under them.

As a pointer, the Economic and Financial Crimes Commission (EFCC), is presently prosecuting one of the former Chairmen of the NSITF, Mrs Ngozi Olejime over her alleged role in the financial management of the Fund.

In the audit queries issued by the office of the Aiditor General of the Federation which is being considered by the House of Representatives Committee on Public Accounts, being chaired by Hon. Busayo Oluwole Oke, it directed the management of the NSITF to explain with evidence, how N41.683 billion was spent without necessary approvals.

The NSITF management is also directed to justify, recover and remit to the Federation Account the sum of N10.9 billion spent by it without evidence of expenditure.

The Fund is also to account for how N29.2 billion was spent as well as how N5.528 billion was spent without approval.

The report specifically noted that the Fund designed and commenced the implementation of a salary structure and payment of irregular allowances not approved by the National Salaries, Income and Wages Commission thus, led to irregular payments of N38.219 billion as salaries and N1.872 billion as allowances.

Specifically, the Managing Director and the three Executive Directors of the NSITF collected about N69 million as executive management allowances for housing, furniture and generator in 2017, aside the normal monthly allowance they receive known as management allowance as part of the new special salary structure that did not pass through the approved process of government.

The audit report noted that the NSIFT transferred over N17 billion to some unnamed persons and companies between 2013 and 2018 without payment vouchers and other supporting documents for authentication.

It pointedly accused the management of the Fund of diverting N5.5 billion from Skye bank to a new account with zenith bank in 2014, adding that the second account was opened without the approval of Accountant General as required by financial regulation 713.

The audit query further stated that NSITF purportedly transferred N504.22 million from its investment E-collection account to capital fund expenditure account without the approval of the Board while N100.215 million was returned leaving a balance of N404 million in the account.

The AuGF report specifically said that the NSITF engaged in unauthorized investment amounting to about N2.2 billion without adequate records to back up such investment, stressing that this might have led to diversion of government funds to private use.

In the same manner, the report said that the Fund failed to account for about N93 million being return on investment from its property just as the report declared that 18.7% of gross rent collected was abnormal.

The audit report equally stated that the average return on investment of 1% was considered too low in view of the fact that they were investment opportunities that could have yielded better return far above the rate.

For instance, between January 1, 2012 and December 31, 2017, the NSITF was alleged to have deducted about N3.623 billion naira as Pay-As-You-Earn, Value Added Tax and With Holding Tax without remitting the same to the appropriate tax authority.

Other issues queried included the failure to present payment vouchers for 2012 to 2017, amounting to N6.89 billion naira audit, irregularities in the award of ICT-related contracts worth N5.532 billion naira, some of which were duplicated or without certificate of no objections, payment of contract not supported by relevant documents worth N1.34 billion and contact splitting worth N390.414 million naira.

The report also included irregular award of training contract for the sum of N250 million without following due process, contract payment without evidence of performance amounting to N151.39 million, awarding of a contract worth N157.98 million to a contractor without documents to back up the contract as well as irregular award of consultancy contract for processing and regularization of title deeds and survey plans worth N120 million.

The report also raised query for the payment of N170.33 million by NSITF to a consultant without proper documentation which could lead to misappropriation and misapplication of funds as well as irregular payment of N96.89 million for the supply of UPS and inventers in addition to the award of contract for the supply of 22 motor vehicles at the cost of N146.03 million without following due process.

The report also took note of another contract for the supply of one Prado jeep at the cost of N48.3 million without the approval of the Board and the payment of N35.9 million for a contract that was not executed as well as another payment of N32.3 million for a contract without due process as no tender documents were provided or sighted.

The AuGF audit query also accused the NSITF management of spending N926.534 million to engage external solicitors without clearance from the office of Attorney General of the Federation and Minister of Justice as well as payment of another N185 million as legal fees without the approval of the Attorney General.

The report specifically accused the NSITF of making irregular payment of public fund to Bureau de change worth N467.42 million and paying about N84 million to travel agents without any supporting documents in addition to spending N180.84 million on international travel without the approval of the Head of the Civil Service of the Federation and or the Secretary to the Government of the Federation.

Curiously, the Fund also spent N35.422 million on estacode without approval.