FG Issues Circular to Control Spending In MDAs

Proshare

Monday, March 6, 2017 9.22AM / Ministry of Finance

The circular is aimed at compelling Boards and Agencies who currently operate outside of budgetary control to comply with the law. Sec 22(2) of the Fiscal Responsibility Act (FRA) lists agencies including NPA, NIMASSA, NAFDAC, JAMB, NTA, NCC, CAC, NECO, who should remit 80% of their operating surplus into the Consolidated Revenue Fund. 


Minister of Finance stated that records show very poor compliance with the provisions of the Fiscal Responsibility Act. Some agencies have never credited the Consolidated Revenue Fund despite having salary, capital and overhead financed by the Federal Government. Indeed, cost to income rates of 99.8% have been the average, meaning that they spend all their internally generated revenue and subventions released to them. 

The Minister said such practices are not sustainable in any economic climate and with the current serious economic challenges being faced by Nigeria, can no longer be tolerated. Accordingly, all revenue generating agencies must comply with the circular and cut their costs.

In the circular sent to MDAs, the Minister said revenues generated by all Ministries, Departments and Agencies (MDAs) must be reported on a gross basis prior to any deductions. Also, all self-funded Federal Agencies are to limit their annual expenditures from their internally generated revenues to not more than 75% (Seventy Five percent) of their total gross revenue, while fully funded agencies are to remit all their internally generated revenue (IGR) to the Consolidated Revenue Fund (CRF).

The Circular said that henceforth, 80% of the resulting operating surplus by MDAs should be remitted into the Consolidated Revenue Fund (CRF) on a quarterly basis, in accordance with the Fiscal Responsibility Act. 

To ensure continual monitoring, the circular required all MDAs funded through the annual budget must submit monthly Expenditure Transcripts and Revenue Returns, to the Office of the Accountant-General of the Federation (OAGF), while agencies not funded through the annual Federal Government budget are to prepare and submit Quarterly Management Accounts including Revenue Returns to the OAGF.

The Minister reminded all MDAs that in line with Financial Regulations (FR) 107, the Accountant-General of the Federation shall carry out routine revenue monitoring and inspection visits to the MDAs to verify compliance with the new guidelines. The circular said any Accounting Officer/Chief Executive Officer of MDAs that defaults in remitting revenues as appropriate and as when due shall be sanctioned accordingly and the renewal of the tenure of appointment of Accounting Officers/Chief Executive Officers shall be tied to their compliance with the content the new guidelines. 

Related Press Release from MoF
1.       2016 FISCAL POLICY MEASURES
2.      ADEOSUN: FG'S ECONOMIC TEAM WORKING HARD TO REVAMP ECONOMY
3.      KEMI ADEOSUN SAY NO IMF LOAN FOR NIGERIA By Salisu Na’inna Dambatta
4.      FG, STATES AND LGs SHARE N473.832 BILLION OCTOBER 2015 REVENUE
5.     
FG MOVES TO CONTROL SPENDING IN MDAs
6.      FG APPROVES IMMEDIATE PAYMENT OF N407 BILLION TO OIL MARKETERS TO END FUEL SCARCITY
7.      REDUCING COST OF GOVERNANCE: FG TO ESTABLISH EFFICIENCY UNIT

 


Related News
1.       Economic Reform by Coincidence - Does It Really Matter? - LBS EBS - March 2017
2.      Manufacturing PMI Stands at 44.6% in February 2017 from 48.2% in January 2017 - CBN
3.      PMI Reading No 47 is Neutral; Records a Modest Increase
4.      Nigeria Q4 Report Shows Sign Of Recovery - Min of Budget & Planning
5.      GDP Contracts by -1.30% in Q4 and -1.51% for Full Year 2016; Is Nigeria on Its Way Out of Recession?
6.      #SWGovinnovations2017: Awoyemi charges S'West States to develop core-competencies.
7.      Fitch Affirms Nigeria's Lagos State at 'B+'; Outlook Negative
8.     Issues and Clarifications on the 2017 Budget Proposal
9.      Reviewing The Health of Nigeria's External Shock Absorbers

Related News
SCROLL TO TOP