Monday Column By Hameed M. Bello, PhD
hamdbelo@yahoo.co.uk
Simply understood, a budget is padded when the original proposal meant to be spent by a nation under the recurrent and capital expenditures is raised above the actual expenses in a fiscal year. In the national budget specifically, this can be done either from the source at the Ministries, Departments and Agencies, MDAs, of government, or at the National Assembly where the lawmakers could tinker with the budget proposals sent to them by raising the figures to accommodate vested interest. The budget padding masterminds usually employ an accounting strategy and dexterity in shielding the figures smuggled into a padded budget, and in most cases they get away with it uncaught. Sometimes they run out of luck and get caught when the budgeting auditors, especially the anti corruption agencies, subject the budget proposals or the approved figures to scrutiny. Even at that, we hardly hear of budget padding culprits being tried or jailed. To smuggle figures into the budget arbitrarily is no doubt an act of corruption. It can also be construed as an act of accounting terrorism because it is not too different from other types of terrorism since it is the deliberate commission of an act, though not of violence per se, but certainly to create public fear, indignation or discontent through the suffering of the victims (the Nigerian masses) in furtherance of selfish personal or group interests, or in pursuit of political or social agenda. When monies budgeted to provide development and bring about improved quality of life for the people are removed or diverted for purposes not originally envisaged in the budget, it will certainly bring about underdevelopment, pain and suffering for a greater number of people in the society. In this respect, culprits of budget padding can comfortably be treated as “accounting terrorists” intent upon corrupting the budgeting process for individual, group or corporate interests. They deserve to face the full wrath of the law.
Recall that before transmitting the 2021 budget to President Muhammadu Buhari for his assent, the National Assembly reportedly added several controversial projects, as well as increased and slashed the budget of some MDAs.
The 2021 budget proposed by President Buhari to the lawmakers was N13.08 trillion. But upon passage, the federal lawmakers were reported to have used their legislative powers to raise the budget to N13.6 trillion, an increment of over N500 billion which made the proposal larger than the actual estimates. They also inserted new, controversial projects to the budget, numbering over 1000. The lawmakers’ goal could be lofty, but public perception suggests suspicion of their motive.
As detailed by reports, the Ministry of Finance was the most favoured in the increments made across some ministries. The sum of N5.4 trillion was initially proposed for the ministry by the president. However, upon passage of the budget, the ministry’s spending plan was put at N5.67 trillion, an increment of almost N300 billion. About 97% or (N296 billion) of the finance ministry’s increase went to Service Wide Vote (SWV). The SWV is a major component of the nation’s yearly budget where a lump sum of money is kept to tackle unforeseen expenditure both for recurrent and capital.
Another case in point was the alarm by the Senate on the N16 billion padding of the 2022 budget proposal by the Ministry of Environment. We heard of the disclosure made by the Chairman of the Senate Committee on Environment, Ike Ekweremadu, that N6 billion which was queried in 2020 when it was added to the Ministry of Environment’s 2021 budget was brought back in 2022 as N16 billion.
Yet another reference point was the 2022 budget proposal for the Federal Inland Revenue Service (FIRS) put at N228 billion which is higher than that of the entire National Assembly, the Judiciary and that of 24 states in the country. There was also the uncovering of a fictitious N4.5 billion item in the provision for the National Drug Law Enforcement Agency (NDLEA) for the construction of police barracks which drew criticism across the social spectrum.
And just last week, October 5, we heard from the Independent Corrupt Practices and Other Related Offences Commission (ICPC) how it uncovered the fraudulent insertion of over N7billion in the budget by a politically exposed person in the name of empowerment.
The ICPC Chairman, Professor Bolaji Owasanoye, SAN, disclosed this at the 4th National Summit on “Diminishing Corruption in the Public Sector” held at the State House Conference Centre on Tuesday, in Abuja. Owasanoye said that the intensified scrutiny of personnel and capital cost of MDAs by ICPC had led to proactive restrictions of surpluses or duplications in the budget. He decried how some unscrupulous persons undermined the system by abusing the budgetary process for their gains.
“Just last week the Commission in collaboration with the Budget Office and stakeholders met with some MDAs on the recurring surpluses in their payroll to determine proactive measures to improving the budget process.
“We also actively review the budget to prevent abuse by senior civil servants and PEPs who sometimes personalise budgetary allocation for direct benefit.
“In one case, a PEP successfully increased the budget of an agency in order for the agency to buy a property from him.
“In another case the PEP inserted soft projects worth over N7 billion for a catchment population of about one million people in the name of empowerment. Both cases are under investigation,” the ICPC chairman was quoted as saying.
He reportedly said also that ICPC review of special funds meant to improve education delivery such as UBEC and TETFUND had also shown continued abuses and breach of procurement standards and compromise of statutory mandates. The case is not different at SUBEB, he said.
Elsewhere, at a recent public hearing held by the Senate Committee on Finance on the 2023 federal budget, the ICPC Chairman, Prof Owasanoye also testified that the 2021 and 2022 budgets were padded with duplicated projects worth N400bn by MDAs. He also said N49.9bn was earmarked as salaries for ghost workers in the first half of 2022.
Prof. Owasanoye did not mention names, but said duplicated projects worth N300bn were inserted into the 2021 budget and N100bn projects in the 2022 budget. ‘Thorough scrutiny’ of budgets approved for MDAs saved the government from wasting billions of naira on ‘fictitious projects’, he was said to have said.
“The same pre-emptive move saved the country from spending N49.9bn for salaries of ghost workers put on fictitious payrolls by the fraudulent MDAs between January and June this year,” he was also quoted to have said.
“Names of MDAs involved in project duplication running into intercepted billions of naira and fictitious payrolls are available and will be forwarded to the committee. The good thing about the pre-emptive moves made by us is that monies for the fraudulent acts were prevented from being released to the affected MDAs and it’s gratifying that the Finance Ministry and Accountant General’s Office cooperated with us,” he said.
Owasanoye urged the relevant committees of the National Assembly to watch out for similar project duplications in the proposed N19.76trn 2023 budget. “From our own end, detection of such projects is done by verifying their locations and names, upon which we tell the appropriate authorities not to release wrongly budgeted monies to them,” he reportedly said.
The ICPC Chairman and his staff deserve commendation for their vigilance in preventing such a colossal daylight stealing of public money. Project duplications as a way of stealing from the treasury has gone on for years. Noises have been made but the ugly act persists because those who perpetrate the crime manage to dodge all budget control mechanisms – They have mastered the system thoroughly. The actors could have been stopped by parliamentarians who have the power of oversight but which they may not exercise because they too stand to benefit from the fleece. It is courageous of the ICPC to have come up with those disclosures, seeing that they are dealing with powerful interests in the business. The ICPC should however move a step further by making public those other MDAs and individuals that are found wanting in this fleecing of our common wealth. They should be named and shamed to discourage other potential ‘accounting terrorists’.
