An audit conducted by the Office of the Auditor-General for the Federation on the account of the Nigerian Ports Authority has revealed irregularities in the award of a N7.5bn contract, its execution and payment for the project.
The findings are contained in the audit report for Ministries, Departments and Agencies of government, which was signed by the Auditor-General for the Federation, Mr Anthony Ayine.
A copy of the report, which had already been submitted to the Public Accounts Committee of the National Assembly, was made available to our correspondent in Abuja.
A number of lapses in the management of public funds and resources were identified across several MDAs in the annual audit.
The findings range from irregular expenditure to failure to surrender surplus revenues to the treasury, all running into billions of naira.
Ayine, in the 2017 audit report, stated that the NPA awarded the contract for Shore Erosion Control Work at Akipelai, Ayakoro and Otuoke towns in Bayelsa State for the sum of N7.5bn.
The contract was awarded through a letter with reference number, HQ/GME/CP/CON/R.16/067 dated 22nd March, 2012, with a 14-month completion period.
As of November 11, 2015, he said four payment certificates and an advance payment, totalling N4.24bn, had been made to the contractor.
The N4.24bn represents about 56.61 per cent of the contract amount.
The AGF said that a review of documents and the Bill of Quantities under Bill No. 1 (General) attached to the payments revealed that mobilisation fee of N1.12bn paid to the contractor was supported by a conditional bank guarantee from Zenith Bank Plc with a validity period of 365 days.
He said the guarantee, which expired on March 2, 2013, was contrary to the provisions of Section 35(1a) of the Public Procurement Act, 2007 and Financial Regulations 2933 ’i’ (2009) which provided for submission of an unconditional bank guarantee or insurance bond.
He said over four years after the expiration of the bank guarantee, the contractor had failed to renew it with the balance of unrecovered advance payment standing at N539.45m.
The audit also revealed that the sum of N19.5m was paid for the purchase of three Toyota Hilux vehicles without any evidence that the vehicles were purchased.
It also found that the sum of N13.5m was provided as an annual running cost for the project vehicles, out of which N6.75m was certified and paid to the contractor.
However, it noted that there was no evidence to show what the amount was used for.
The report read in part, “The sum of N11.25m certified for compensation of properties to be affected by the project and paid in certificate No.3 had no records on how the money was utilised nor the beneficiaries involved.
“The sum of N12.5m provided for community relations was certified and paid vide certificate No. 3 with no supporting documents to validate the payment.
“The sum of N128m provided for insurance of the work and insurance against damages to persons and properties was certified and paid through certificate No. 3 with no evidence that any insurance policy was undertaken.”
The Auditor-General also found that while N3.9bn was the value of work executed for the contract based on the Principal Manager’s report on Interim Valuation Certificate No. 4 dated November 11, 2015, about N4.24bn was the amount paid.
This, according to the audit report, implied that the contractor was paid N344.26m more than the work executed.
“During the inspection of the project, it was revealed that the contractor had since abandoned the project site; and the duration of the project had since lapsed without approval for its extension,” the report added.
Ayine in the report recommended that the Managing Director of the NPA should be sanctioned in line with extant regulations for these infractions.
The Registrar, Institute of Finance and Control of Nigeria, Mr Godwin Eohoi, said the findings of the audit report should be investigated by the Public Account Committee of the National Assembly and necessary actions taken against those found to have committed the infractions.
“We need sound financial control system in the public sector to be able to check many of these infractions,” he said.
Also speaking on the issue, an expert in Public Sector Accounting, Charles Ofomata, called for the prosecution of the accounting officers involved in the irregularities.
He said, “Withholding and spending money due to the treasury is a criminal offence for which the accounting officers of the agencies involved should be prosecuted.”