Treasury Single Account: Police Colleges Flout Policy

Treasury Single Account: Police Colleges Flout Policy

Dauda Ismail

Treasury Single Account, TSA, which is a financial policy in use in several countries all over the world, was proposed by the Federal Government in 2012 under the immediate past administration of Dr Goodluck Jonathan to consolidate all inflows from all agencies of government into a single account at the Central Bank of Nigeria and was fully implemented by the present administration, is still being flouted by some agencies of  government.

But in the cases of the hunter becoming the hunted, investigation reveals that the various police secondary schools across the country being run by the Nigeria Police and funded by the federal government, has been flouting the TSA by having other accounts where the Internally Generated Revenues, IGR, goes into.

This would surprise anyone because the Police is expected to be above board in issues of corruption, criminality, graft and everything else that goes contrary to the Criminal Code and the Nigerian Constitution.

The Police Secondary Schools like every other federal government owned institution is funded by the Federal Government as they receive allocations annually and their teachers and other staff apart from those sourced from other private companies like security men and cleaners, are paid monthly by the Federal Government. But instead of remitting their earnings in the form of school fees and other ancillary fees, go into separate accounts not the TSA.

For instance, in the last term, each student was given a take home bill where the tuition fees vary according to IRF, SPO and civilian at the rates of 7,000, 12,000 and 20,000 naira respectively. All other fees were uniform viz, Feeding fee -5,000; computer fee – 1,000; PTA – 2,500; student lesson – 1,000; face shield & nose mask – 1,400; laundry services – 2,000 and books and other materials – 23,500.00, bring the totals to 62,400 for IRFs; 68,405 for SPOs; and 76,400 for civilians.

For instance, sometime in November 2019, the report that some key government organisations have been avoiding the use of the TSA in the last three years, thereby causing a huge loss of revenue to the country came as a surprise to many.

According to a report by the ad hoc committee of the House of Representatives Committee on TSA, shortly before the end of the Eighth Assembly, the lawmakers affirmed that as of July 31, 2018, the platform processed more than N9.78 trillion, as against N4.21 trillion in the first year. Of N4.21 trillion in the first year, the embattled Remita collected over N3.65 trillion; the Real Time Gross Settlement, RTGS, got N287.92 billion, and N269.77 billion came from Direct Debit.

It was also confirmed that 1,678 institutions – Ministries, Department, and Agencies, MDAs, had been enrolled, while compliance level remained tardy. In its interaction with the Director of TSA at the Office of the Accountant-General of the Federation, OAGF, the 12-man committee led by Danburam Nuhu Abubakar, showed the value, which could have been frittered by public officials.

The committee was inaugurated after the House deliberated on a motion on the need to ascertain the proceeds of the TSA to enhance transparency, accountability and good governance. It thereafter resolved to investigate the matter and report back for further legislation. “Some people were actually benefiting, instead of the government and people. These monies were scattered in accounts such that the government does not know what it has. When it needs money, it will go to commercial banks to borrow through Treasury Bills at over 10 per cent. So, it was actually borrowing its money”.

An economist, Emma Wagbo, explained: “While the coming of the TSA is good, what about the abuse and diversions still ongoing? Some agencies are taking advantage of some provisions to deprive the government of surplus operations.”

The report, corroborating Wagbo’s concerns, raises the alarm over serial violations of TSA guidelines by MDAs, recommending severe sanctions, including “name and shame” and prosecution. The lawmakers affirmed that there are collection accounts, which basically are used by the MDAs to recover government revenue from the public, businesses or other MDAs, like FIRS, Customs, Corporate Affairs Commission, CAC, and CBN/NNPC offshore accounts.

“After the meeting with banks, CBN, Office of the Auditor-General of the Federation and Nigerian National Petroleum Corporation, NNPC, on the 15th of August 2017, the committee discovered that over $900 million is still being held outside the TSA.

“While some banks fully complied with the directive of the adhoc committee by remitting these funds into the TSA, it is worthy of note that the sum of about $995.71 million was still held outside the TSA by some other banks. This sum of $995.71 million includes the principal deposit and the accrued interest on the deposit. Also discovered was an amount of N1.207 billion and Euro 23,704.01,” the report notes.

The Auditor-General for the Federation, Anthony Ayine, in the 2016 audit report on the accounts of the federation, had noted that the extensive violation of statutory financial reporting obligations by parastatals was of great concern. He suggested stringent measures, including withholding financial releases and sanctioning of the chief executives of defaulting agencies who do not render timely accounts, as provided in the constitution and financial regulations.

An abuse of process was also uncovered when the committee observed that some MDAs claimed they obtained presidential exemption to operate certain accounts outside the TSA policy. With the committee’s insistence on citing the purported exemption letter, the lawmakers found that the letter was only conveying the approval of the president signed by an assistant director. As for some ministries, the letter could not be produced as at May 9, 2019.

“Applications for exemptions/waivers of all or any MDA’s fund/accounts must follow the guidelines on TSA implementation and be duly approved, signed by the president only. All existing exemptions/waivers granted to MDAs that do not conform with the president’s assent should be declared illegal and transactions carried out fraudulent,” the report recommends.

According to the Lead Director of the Centre for Social Justice, CSJ, Eze Onyekpere, “There is an issue that is of more importance in the TSA operation and that is about information and proper accounting of the deductions on stamp duties on banking transactions. Where is that money?

“Maybe it has gone between craters and black holes. The financial system regulators are telling stories. There are trillions in that account that are not reviewed and nobody is asking about it. If people employed to manage government revenues are not remitting to the source, then what is the essence of the TSA? What is the essence of the Fiscal responsibility Act?”

Also, the Partner/Head of Tax and Corporate Advisory Services at PwC Nigeria, Taiwo Oyedele, said: “One of the expected benefits (of TSA) is lower debt financing costs by utilising the surplus funds of some MDAs to finance the deficit of others, thereby minimising overall borrowing cost.

“From all indications, it seems this benefit is yet to be fully realised, given the consistently high level of borrowing by the government despite rising TSA balances. This should receive full attention as a matter of priority, to reduce the current high and unsustainable debt service cost-to-revenue ratio.

“Also, more MDAs should be migrated to the TSA both at the federal and sub-national levels. Other features of the TSA should be fully explored and linked to budgeting, budget control, fiscal transparency, suppliers, vendor management and transaction monitoring. This will help reduce challenges with the late release of appropriated funds as well as under-performance particularly with respect to capital expenditures”.

But to see the police colleges among the defaulters is not encouraging.

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