FG orders MDAs to pay 80% of surplus to treasury

bibing

The Federal Government on Friday night issued a circular ordering all Ministries, Departments and Agencies to henceforth remit 80 per cent of their operating surpluses into the Consolidated Revenue Fund account.

The directive according to a statement from the Federal Ministry of Finance was issued by the Minister of Finance, Mrs. Kemi Adeosun.

The statement signed by the Director, Press, FMF, Mr. Marshal Gundu, also directed agencies of government to ensure that all operating costs are reduced to the barest minimum.

It said the era where agencies generated revenues on behalf of the government without remitting was over, noting that any agency of government that failed to comply with the new directive would be sanctioned in line with the provisions of the Fiscal Responsibility Act.

Section 22(2) of the Fiscal Responsibility Act, according to the statement, lists agencies that should remit 80 per cent of their operating costs to include the Nigerian Ports Authority, the Nigerian Maritime Administration and Safety Agency and the Nigerian Television Authority.

Others are the Joint Admissions and Matriculations Board, the Nigerian Communications Commission, the Corporate Affairs Commission, the National Agency for Food and Drug Administration Control and the National Examination Commission among others.

The minister in the statement said records showed very poor compliance with the provisions of the Fiscal Responsibility Act.

For instance, it said some agencies of government had never credited the Consolidated Revenue Fund despite having salaries, capital and overhead financed by the Federal Government.

It said any Accounting Officer/Chief Executive Officer of MDAs who 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.

It lamented that cost to income rates of 99.8 per cent had been the average, implying that the agencies spent all their internally generated revenue and subventions released to them.

The statement read in part, “The Minister of Finance, Mrs. Kemi Adeosun, has issued a circular on guidelines regarding budgeting, revenue and expenditure aimed at ensuring that MDAs remit revenue and generate operating surpluses which by law ought to be credited Consolidated Revenue Fund. “The circular is aimed at compelling Boards and Agencies who currently operate outside of budgetary control to comply with the law. Section 22(2) of the Fiscal Responsibility Act lists agencies including NPA, NIMASSA, NAFDAC, JAMB, NTA, NCC, CAC, NECO, who should remit 80 per cent 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 per cent have been the average, meaning that they spend all their internally generated revenue and subventions released to them.” With the current economic challenges being faced by Nigeria, the statement noted that these practices would no longer be tolerated.

It added, “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 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 per cent of their total gross revenue, while fully funded agencies are to remit all their internally generated revenue to the Consolidated Revenue Fund.

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

To ensure continual monitoring, the statement said the circular required all MDAs funded through the annual budget to submit monthly Expenditure Transcripts and Revenue Returns, to the Office of the Accountant-General of the Federation.

It said agencies not funded through the annual Federal Government budget should prepare and submit Quarterly Management Accounts including Revenue Returns to the OAGF.

The Minister in the statement reminded all MDAs that in line with Financial Regulations 107, the Accountant-General of the Federation must carry out routine revenue monitoring and inspection visits to the MDAs to verify compliance with the new guidelines.

Source: Punch