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Senate queries alleged diversion of N14bn stabilisation fund

The Senate has asked the office of the Accountant General of the Federation to explain the alleged diversion of the N14bn stabilisation fund meant for state governments.

The Senate Public Account Committee, which gave the directive in a document obtained by our correspondent on Friday, relied on the 2016 report of the Auditor General for the Federation to take the decision.

The Chairman of the Senate panel, Senator Mathew Urhoghide, who announced this at the SPAC meeting, also faulted why the Office of the Accountant General of the Federation allegedly approved the overpayment of N10bn to state governments as bailout.

Urhoghide has therefore asked both the office of the Accountant General of the Federation and the Secretariat of the Federal Accounts Allocation Committee to submit necessary documents relating to the financial transactions.

On the alleged diversion of the N14bn stabilisation fund, the Senate panel insisted that the Accountant General’s office has no right to go against the law which established the fund by diverting the funds.

Part of the AuGF query read, “0.5 per cent FGN Stabilisation Fund was created to provide financial support to states whenever they suffer an absolute decline in revenues due to factors outside their control. This support is to be in the form of an augmentation of the states’ allocation.

“From available records, a total of N17,108,583,681.78 accrued from the Federation Account into the 0.5 per cent Stabilisation Fund from January to December 2016.

“During the examination of the Central Bank of Nigeria’s statements for the year, we observed that the sum of N2,812,694,928.36 was funds released to the Nigerian Sovereign Investment Authority, and N14,374,728,817 to the Federal Ministry of Defence.

“The Accountant General has been requested to provide the authority for the funds invested, tenor of the investment, rate of interest payable, certificate for the funds invested and forward same for audit verification.

“The Accountant General should also explain the utilisation of N14,374,728,817.20 for the purpose of funding a new division contrary to the purpose for which the fund was created. He should provide evidence of refund of the sum of N17,187,423,745.56 back to the Stabilisation Fund.”

On the issue of overpayment of the bailouts, the AuGF query read, “Our review of records at the FAAC Secretariat revealed that under the salary bailout arrangement, the sum of N406,368,202,413.97 was the Total Principal Amount released to state governments that benefited from salary bailout in 2015 and 2016 as recorded in the OAGF’s summary submitted for audit.

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“Whereas audit scrutiny of the documents presented revealed that the actual total principal amount released to the benefiting states was the sum of N416,368,202,413.97, resulting in an overpaid difference of N10,000,000,000.

“The FAAC Secretariat is requested to explain this overpayment and take steps to correct its accounting records where appropriate.”

The committee also sustained the AuGF query issued to the Accountant General of the Federation regarding the overpayment.    

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