An audit report has uncovered financial irregularities totaling over N4.64 billion in the Federal Ministry of Works (Housing Sector), highlighting significant non-compliance with financial regulations and procurement laws.
The findings, detailed in the Auditor-General for the Federation’s Annual Report, cover activities conducted between 2020 and 2021. The report identifies lapses in internal controls during the tenure of Babatunde Fashola, the former Minister of Works and Housing, raising concerns about accountability in public administration.
Among the issues identified were payments made without proper documentation, extra-budgetary expenditures, excessive mobilisation fees, and contracts awarded without adhering to due process.
Key Irregularities and Violations
One major anomaly involved a sum of N1.08 billion paid from the Government Integrated Financial Management Information System (GIFMIS) account without supporting payment vouchers, in direct violation of Paragraph 601 of the Financial Regulations, 2009. Additionally, N546 million was transferred to project accounts without adequate documentation or corresponding budgetary provisions.
The Auditor-General attributed these irregularities to weak internal control mechanisms within the Ministry, warning of risks such as misappropriation of funds and financial losses. Despite multiple queries, the Ministry did not provide responses to address these discrepancies.
Extra-Budgetary Expenditures
The audit also revealed extra-budgetary spending totaling N2.89 billion, including N1.88 billion expended without legislative appropriation. Notably, over N1 billion was paid to contractors for road construction projects in Daura, Katsina State, which were only included in the 2017 Appropriation Act.
These expenditures contravene Section 80(4) of the 1999 Constitution, which mandates legislative approval for all withdrawals from public funds. The report stated:
> “The sum of N1,883,795,670.51 (One billion, eight hundred and eighty-three million, seven hundred and ninety-five thousand, six hundred and seventy naira, fifty-one kobo) was expended by the Ministry without evidence of appropriation.
> “The sum of N1,003,039,708.79 (One billion, three million, thirty-nine thousand, seven hundred and eight naira, seventy-nine kobo) was paid to four contractors for the construction of roads in Daura, Katsina State. The project was budgeted for in the 2017 Appropriation Act, and
> “Approval for the extra-budgetary expenditures in (i) and (ii) above, totaling N2,886,835,379.30 (Two billion, eight hundred and eighty-six million, eight hundred and thirty-five thousand, three hundred and seventy-nine naira, thirty kobo) by the National Assembly was not presented for audit.”
The report attributed these violations to internal control weaknesses, which undermine financial accountability and increase the risk of fund mismanagement. The Ministry failed to provide clarifications or justify the expenditures.
Contracts Awarded to Unregistered Companies
Another significant finding involved contracts worth N493.97 million awarded to companies not registered with the Corporate Affairs Commission (CAC). Of this amount, N170.36 million was paid to unregistered entities, including a company that received a contract in 2016 but was only incorporated in 2019.
These actions violate the Public Procurement Act, 2007, and the Companies and Allied Matters Act, 2020. The absence of proper legal registration raises concerns about potential non-execution of contracts, fund mismanagement, and payments to ghost entities.
The audit report noted:
> “Payments for contracts totaling N493,967,484.24 (Four hundred and ninety-three million, nine hundred and sixty-seven thousand, four hundred and eighty-four naira, twenty-four kobo) were made to non-existing companies.
> “The sum of N5,825,989.28 (Five million, eight hundred and twenty-five thousand, nine hundred and eighty-nine naira, twenty-eight kobo) was paid to a contractor vide payment voucher with Ref. No PROC/PBHD/CAP1345/2020 dated 30th December, 2020, out of the total contract sum of N493,967,484.24 without the company being incorporated.
> “Three contractors were paid a total of N170,355,961.05 without evidence of incorporation with the Corporate Affairs Commission (CAC).
> “A company that was awarded a contract on the 25th of November, 2016 was incorporated with CAC on the 16th of August, 2019.”
The report recommended recovering the funds, remitting them to the Treasury, and implementing sanctions against officials involved in the irregularities.
Other Financial Infractions
In Oyo State, the Ministry paid N110.81 million, representing 22.61% of the total contract sum, as mobilisation fees for a project, exceeding the 15% limit set by Paragraph 2933 of the Financial Regulations. The contract was also awarded on a Sunday, raising concerns about procedural integrity. The report called for the recovery of the excess payment and sanctions for misconduct under Paragraph 3129 of the Financial Regulations.
In Edo State, a contract worth N46.31 million for classroom construction was awarded without following due process. The report revealed that N40.83 million, or 88.18% of the contract sum, was paid to the contractor, exceeding mobilisation thresholds. The absence of key documentation, such as tender evaluations and approvals, further exposed the Ministry to risks of incomplete projects and fund diversion.
Additionally, five contracts worth N27.84 million were awarded without obtaining bids from at least three unrelated contractors, as required under Section 24(1) of the Public Procurement Act, 2007. Essential documents, including advertisements, tender evaluations, and meeting minutes, were also missing.
Recommendations and Calls for Accountability
The Auditor-General’s report paints a grim picture of financial management within the Federal Ministry of Works (Housing Sector), highlighting pervasive weaknesses in internal controls and poor compliance with financial accountability standards.
The report stressed the need for urgent reforms to prevent further financial mismanagement and safeguard public funds. It recommended that the Ministry’s Permanent Secretary justify the payments, recover unauthorised funds, and ensure their remittance to the Treasury. Evidence of compliance should be submitted to the National Assembly’s Public Accounts Committees, with sanctions applied under Paragraph 3106 of the Financial Regulations if the directives are not followed.
Senate’s Response
The Senate had earlier vowed to invoke parliamentary sanctions against any head of a Federal Government agency implicated in financial infractions identified in the Auditor-General’s report.
Senator Garba Madoki, Chairman of the Senate Committee on Legislative Compliance, issued this warning during a one-day roundtable workshop in Abuja. He expressed concerns over the frequent disregard for Senate summons by heads of Ministries, Departments, and Agencies (MDAs) and emphasized that such behavior would no longer be tolerated.
Madoki lamented:
> “The rate at which heads of MDAs shun Senate resolutions and summons is alarming and unacceptable. The Senate will take firm actions to ensure compliance.”
The report concludes with a call for the Ministry to implement stronger internal controls, adhere strictly to financial regulations, and take accountability measures to address systemic lapses. Urgent reforms are deemed critical to restoring public trust and preventing further financial mismanagement.
Culled from PUNCH
