A Dataphyte review of the 2019 audit report has revealed that the Ministry of Agriculture and Rural development shortchanged the country in amounts running into several millions of naira.
For instance, the Ministry failed to deduct 1% Stamp duty on contract agreements. The amount that would have been generated if these contracts remitted 1% stamp duty was estimated at N89.1 million.
Another sum of N24.7 million was paid to contractors as Value Added Tax despite the fact that the supplies were exempt from value added tax. These were from eight payment vouchers for agricultural equipment supplied to the store of the Ministry.
Defending their action, the management noted that since the VAT paid will still be paid to the Federal Inland Revenue Service, they do not count as diversion of funds.
The Ministry was asked to refund the money (N24 million) to the treasury account.
Another N177.7 million was paid to two contractors, they (contractors) were not charged Value Added Tax and Withholding Tax of the amount paid, denying the country of over N8 million.
Against the provisions of paragraph 613 of financial regulations, which stipulates that; ”Payments shall be made only to the persons named in the vouchers or their properly
authorized representative”, the ministry paid N700 million to persons other than direct beneficiaries of such payment.
The ministry in its response argued that the persons who are the original beneficiaries were yet to be enrolled on the e-payment platform of the government.
The Ministry was also asked to refund N700 million, a recommendation that has not been heeded as at the time of this report.
In 2018, the ministry reported it had fully funded its capital projects with appropriation released. However, according to the 2019 audit report, the ministry spent N7.7 billion in 1st quarter of 2019 on capital project appropriation for a contract executed in 2018. The management could not defend its action when queried and simply noted that the action was being investigated.
Again the auditor-general asked that the sum of N7.7 billion be refunded to the treasury by the Ministry.
Actions by MDAs such as are captured in the 2019 audit report widens the budget deficit gap and denies the country of critical funds especially as the country faces huge borrowing debts.
Dataphyte has reported how Nigeria relies on borrowings to finance its budget, with debt servicing heaping fiscal pressure on the country’s dwindling revenue and revenue challenges.