The Chairman of the Fiscal Responsibility Commission (FRC), Victor Muruako, has revealed that some federal Ministries, Departments and Agencies (MDAs) were yet to remit over N1.5 trillion of their operating surpluses. This is coming even as the federal government has been lamenting inadequate financial resources to execute critical projects, leading to unprecedented borrowings to fund the nation’s budget.
The Guardian reports that the FRC chairman disclosed this yesterday in Abuja at a training for Accounting Officers of MDAs, organised by the Paradigm Leadership Support Initiative (PLSI) in a bid to boost the Federal Government’s revenue.
He, however, did not mention the MDAs involved but said their continued failure to remit what is due to the government could not continue in the face of severe revenue challenges confronting the nation.
He maintained that to check under remittance by MDAs, the Commission was in the process of reviewing and updating the calculation template, which makes the agencies know what they ought to remit to the government.
Disclosing that the MDAs had been engaging in what he described as creative accounting in preparing their audited financial statements to reduce the remittable amount of operating surplus, he said it was important that the government strengthens its revenue mobilisation strategy, leveraging on improving remittance of operating surplus to the Consolidated Revenue Fund by the 122 schedule corporations covered by the Fiscal Responsibility Act 2007.
The FRC boss revealed that verifiable figures indicated that there has been a substantial increase in the volume of remittances of operating surplus between December 2020 when the first leg of the training was held and now.
He stated: “The uniqueness of the calculation template is that it makes the operators, particularly, the DFAs (Director of Finance and Accounts), the heads of accounts, audit to know what they ought to remit. It would also help the chief executives to know allowable and disallowable expenditures such that as chief accounting officers, they would know when they are already violating the law.”
READ ALSO:https://brandeconomy.com.ng/nigeria-at-crossroads-again-do-not-die-in-their-war/
Muruako, a lawyer, explained that the Commission had issues with the calculations contained in the audited financial statements submitted by government agencies.
“You find a situation whereby after reviewing their audited financial statements, we will return some of their expenditures back to them and calculate it as part of the revenue they owed the government. We normally have that conflict with them but a good understanding of the template for calculation of operating surplus will help them to know. They would even know it when they are flouting the law,” the FRC chair noted.
Speaking further, Muruako said the training in Abuja would also ensure that the amount of independent revenue that would be received into Federal Government coffers in 2021 would clearly surpass the target.
The PLSI Executive Secretary, Mr. Segun Elemo, maintained that the inability of the MDAs to determine what was due to the government from revenue generated had contributed to the increased deficit in the annual budgets, adding that this was responsible for the growing debt burden and cost of debt servicing.
He noted that the 2022 budget deficit of N6 trillion that would be sourced by more borrowings would further increase the nation’s debt profile to N41 trillion, adding that to mitigate it, the Federal Government should strengthen its revenue mobilisation strategy, leveraging on improving remittance of operating surplus to the Consolidated Fund (CRF).
