Friday, February 7, 2014

Senate to probe CBN over N240bn illegal spending

Barring any last minute change in plans, Senate will next week, debate a motion seeking a probe  of alleged spending of over N240.2 billion by the Central Bank of Nigeria (CBN)between 2009 and 2013 without appropriation.
The unauthorised spending started from April 27, 2009 to December 19, 2013 and they were to build five star and three star hotels, an International Convention Centre as well as monies given to some universities across the country.
The spendings were contained in a motion on notice sponsored by the Chairman of the Committee on Rules and Business, Senator Ita Enang. It was originally published in the Senate Notice Paper of Wednesday, to be taken at Thursday’s plenary but the chamber suddenly adjourned to next Tuesday, after a two-hour closed session. The chamber adjourned to enable its members participate in the registration exercise of the All Progressives Congress (APC).
Details presented by Senator Enang, as contained in the notice paper, indicated that the CBN spent over N240.2 billion on, “intervention projects” between 2009 and 2013 whereas the document indicated that only three of the 21 projects embarked upon by the CBN were certified by the Bureau of Public Procurement in accordance with the Fiscal Responsibility Act. In the motion, Enang noted that Sections 22(1)  and 23(1) of the CBN Act  mandates the apex bank to operate a general reserve fund to which it shall allocate one-fifth of its operating surplus.
 
The Act, according to the motion, also mandates the bank to pay the balance of its operating surplus to the Consolidated Revenue Fund of the Federal Government not later than one month following the statutory deadline for publishing each corporation’s accounts.
 
The motion also indicated that the surplus shall be classified  as a Federal Treasury Reserve. Section 22 (1) and (2) of the CBN Act States:
22. (1) “ the provisions of any written law governing the corporation, each corporation shall establish a general reserve fund and shall allocate thereto at the end of each financial year, one-fifth of its operating surplus for the year.
2) The balance of the operating surplus shall be paid into the Consolidate Revenue Fund of the Federal Government not later than one month following the statutory deadline for publishing each corporation’s accounts.”

23. (1) “The corporation’s surplus be classified as a Federal Treasury Revenue”

The motion further indicates that only three projects including the N9.5 billion intervention  at the Administrative Staff College of Nigeria, Badagry, Lagos,  the N2.9billion  intervention in the Federal Medical Centre, Azare, Bauchi state and the N10.042 billion intervention projects at the University of Abuja were procured according to the BPP Act.

Other projects embarked upon by the CBN include a N98 billion expenditure on development of Hotels and Commercial facilities and the proposed  International Convention Centre of the CBN; development of Centres of Excellence at the University of Jos at N9.5bn; University of Port Harcourt, at N10.2bn, University of Nigeria Nsukka, at N6.4 billion; University of Lagos at N14.8 billion, University of Ibadan at N6.8 billion as well as the intervention project at the Uthman Dan Fodio University, Sokoto at N10 billion among others.

The motion further states that the CBN apparently ran foul of the Act setting it up which gave its basic functions as follows.
The motion read in part: “Whereas as in other legislations and as a model, the Central Bank of Nigeria Act provides in respect of the application of operating surplus in Section 5 of the Central Bank Act as follows:
“1) The Bank shall -
(a) in respect of each financial year, determine its operating surplus which shall be the remaining sum from its income and other receipts after meeting all current expenditures as approved by the Board;
(b) as approved by the Board for that year, make provision for the contribution to staff pension funds in accordance with the Pension Reform Act, 2004  and for any other purpose approved by the Board.

“(2) The Bank shall establish a general reserve fund and shall allocate thereto at the end of each financial year one-quarter of its operating surplus for the year.

(3) The balance of the operating surplus shall be paid to the Federal Government half-yearly.”

“Whereas among these agencies, the Central Bank of Nigeria has awarded and is still in the process of awarding projects from its operating surplus instead of paying such sums into the Consolidated Revenue Fund to be appropriated by the National Assembly.”

The motion therefore asks the Senate to ascertain the following: “Mandate the Senate Committees of Finance, Judiciary Human Rights and Legal Matters to conduct a public hearing on the loss of revenue into the Consolidated Revenue Fund of the Federation through evasion of the Fiscal Responsibility Act, acting against and beyond the mandate given by law to the agencies, breach and evasion of public procurement laws and regulations, among others, and in general, for the purposes of determining:

“if and whether the funds spent by the agencies listed in the Fiscal Responsibility Act is the 20% of their operating surplus, and if it so be, where the 80% of their operating surplus were paid into and when.

“if the committal of funds by the Agencies are for projects and programmes within the core mandate or in any manner ancillary to the purpose for which they were each set up, etc.

“If and whether these Agencies are by the provisions of the Public procurement Act bound to submit their procurement to the Bureau of Public Procurement to consider, vet and issue a certificate of No Objection or otherwise before public procurements are consummated.

“By way of peer review, to compare the actions and expenditures of the Central Bank of Nigeria, Nigerian National Petroleum Corporation, Nigeria Ports Authority and other Agencies listed in the Fiscal Responsibility Act with such Treasury or Central Bank of other countries, National Oil Companies of other countries such as United States of America, United Kingdom, Germany, Canada, France, Australia and generally equivalent institutions of other countries and conclude if such institutions in those countries operate in the manner that Nigeria’s do.”

Below is a list of the projects:


EDUCATION SECTOR
S/NO
PROJECT
AWARDED/BUDGETARY COST
DATE AWARDED
1
Construction of Centres of Excellence, University of Jos, Plateau State
9,561,802,952.16
2nd March, 2012
2
Development of Centres of Excellence, University of Port Harcourt, Rivers State
10,242,910,904.62
2nd March, 2012
3
Construction of Centres of Excellence, University of Nigeria, Enugu Campus
6,497,939,424..22
27th April, 2009


4
Construction of Centres of Excellence, University of Lagos
14,844,775,453.50
19th December, 2012
5
Intervention Project at Police Academy, Wudil, Kano
10,000,000,000.00
Not yet awarded
6
Intervention Project at Edo State University, Ekpoma
1,000,000,000.00
12th December, 2013
7
Intervention Project at Navy Finance and Logistic School, Owerrinta, Abia
1,000,000,000.00
12th December, 2013
8
Construction of Centres of Excellence, University of Ibadan, Ibadan Campus
6,869,400,510.24
13th November, 2010
9
Intervention Project at Gombe State University, Gombe
1,000,000,000.00
12th December, 2013
10
Intervention Project at Federal Medical Center, Azare, Bauchi

3,000,000,000.00
Procured

11
Intervention at Federal Treasury Academy, Orozo, Abuja
6,000,000,000.00
Procured
12
Intervention Project at University of Abuja, FCT
10,000,000,000.00
Procured
13
Construction of Center of Excellence, Ahmadu Bello University, Zaria Campus
6,102,007,550.17
27th April, 2009
14
Intervention Project at Administrative Staff College of Nigeria, Badagry, Lagos
10,000,000,000.00
Procured
15
Development of Centres of Excellence, Bayero University, Kano,
9,235,556,046.40
2nd March, 2012
16
Intervention Project at Obafemi Awolowo University, Ile Ife, Osun State
1,000,000,000.00
12th December, 2013
17
Intervention Project at Kaduna State University, Kaduna
1,000,000,000.00
12th December, 2013
18
Intervention Project at National Institute for Policy and Strategic Studies, Kuru, Plateau State
1,000,000,000.00
12th December, 2013
19
Intervention Project at Usman Danfodio University, Sokoto
10,000,000,000.00
12th December, 2013
20
Construction of Center of Excellence, University of Maiduguri, Borno
12,976,286,217.50
7th March, 2013
21
Construction of Centres of Excellence, Nigerian Defence Academy, Kaduna
11,333,333,263.80
19th December, 2012

TOURISM AND HOSPITALITY

1
Development and Operation of Hotels and Sundry Commercial Facilities for the Proposed International Convention Centre, Abuja at The Central Bank of Nigeria (CBN)
98,000,000,000.00
Procured

Whereas of the projects so listed, only the following have gone through Due Process and been given    Certificates of No Objection from the Bureau of Public Procurement
S/NO
PROJECT
BPP REVIEW COST
DATE AWARDED
1
Intervention Project at Administrative Staff College of Nigeria, Badagry, Lagos
(Construction of Intervention Project at Administrative Staff College of Nigeria, Badagry, Lagos)

9,545,399,187.19
Procured
2
Intervention Project at Federal Medical Center, Azare, Bauchi
(Construction of Eye Clinic and Laboratory Complex at Federal Medical Center, Azare)
2,998,598,872.04
Procured
3
Intervention Project at University of Abuja, FCT(Construction of Faculties of science and engineering complexes, ICT Centre, Post Graduate and Clinical Hostels and other Faculties at University of Abuja)
10,042,847,921.00
Procured