Senate Asks FRC to Refund N66m Spent on Unoccupied Building

*Faults alleged diversion of N28m

The Senate Committee on Public Accounts has directed the
Financial Reporting Council of Nigeria to refund to the Federation
Account, N66 million the agency paid as a two-year rent to secure
an accommodation which it never occupied.

The Committee chaired by Senator Mathew Urhoghide also faulted
the agency’s reported use of 64 vouchers to divert N28 million.

The committee members are currently scrutinising the 2015 to
2018 report by the Auditor General of the Federation, which queried
the FRC for investing N66 million on accommodation it never
occupied.

The query reads: “It was observed that, on 21/11/16 the sum of
N42m was paid as rent to Japaul Oil and Maritime Services for an
office space at Japaul Building. N23.4m was paid to Sola Oluseyi &
Co, as legal and agency fee for the office space, making a total of
N66m for two years ending 1/1/2019. The Council is yet to move into
the building, 20 months running with 4 months to its expiration.
(as of 2019).

“This anomaly was due to the failure of the Executive Secretary
(of the FRC during the period) to exercise due diligence in the
application of public funds by ensuring that value is received for
money expended. The Council carried out expenditure of such
magnitude and yet fail to receive value. Huge sum of money was paid
for rent by the Council, but failed to occupy the building, this
amounts to waste of government resources.”

Another query raised by the AuGF against the FRC reads: “During
the audit, it was observed that sixty four (64) payment vouchers
for the sum of N28,765,842.11 were raised and paid without the
Internal Audit stamps and dates, in contravention with the
provisions of extant laws and regulations.

”This infraction was due to the failure of the Executive
Secretary to strictly comply with the provisions of law and laid
down procedures aimed at the strengthening the internal control
system in government agencies. Payments arising from vouchers not
pre audited cannot be accepted as judicious charge against public
funds.”

But, FRC in its written response, claimed that it was carrying
out repairs and partitioning of the building while the rent was
running.

The Council also said it was taking steps to utilize the
building and secure a further lease from the landlord.

The council said, ”Management’s response was that, upon the
acquisition of the office accommodation at the Japaul House, there
was need to give the property a face-lift including partitioning
befitting of an office. However, there was change of Executive
Secretary in 2017, which slowed the process of award of contract.
Secondly, the landlord was not willing to renew the tenancy
agreement after the expiration of the current agreement.”

The committee Chairman, Senator Urhoghide, at Wednesday’s
sitting directed that the FRC management should refund forthwith to
the Federation Account the N66 million paid for the said unoccupied
building in 2016.

*Faults alleged diversion of N28m

The Senate Committee on Public Accounts has directed the
Financial Reporting Council of Nigeria to refund to the Federation
Account, N66 million the agency paid as a two-year rent to secure
an accommodation which it never occupied.

The Committee chaired by Senator Mathew Urhoghide also faulted
the agency’s reported use of 64 vouchers to divert N28 million.

The committee members are currently scrutinising the 2015 to
2018 report by the Auditor General of the Federation, which queried
the FRC for investing N66 million on accommodation it never
occupied.

The query reads: “It was observed that, on 21/11/16 the sum of
N42m was paid as rent to Japaul Oil and Maritime Services for an
office space at Japaul Building. N23.4m was paid to Sola Oluseyi &
Co, as legal and agency fee for the office space, making a total of
N66m for two years ending 1/1/2019. The Council is yet to move into
the building, 20 months running with 4 months to its expiration.
(as of 2019).

“This anomaly was due to the failure of the Executive Secretary
(of the FRC during the period) to exercise due diligence in the
application of public funds by ensuring that value is received for
money expended. The Council carried out expenditure of such
magnitude and yet fail to receive value. Huge sum of money was paid
for rent by the Council, but failed to occupy the building, this
amounts to waste of government resources.”

Another query raised by the AuGF against the FRC reads: “During
the audit, it was observed that sixty four (64) payment vouchers
for the sum of N28,765,842.11 were raised and paid without the
Internal Audit stamps and dates, in contravention with the
provisions of extant laws and regulations.

”This infraction was due to the failure of the Executive
Secretary to strictly comply with the provisions of law and laid
down procedures aimed at the strengthening the internal control
system in government agencies. Payments arising from vouchers not
pre audited cannot be accepted as judicious charge against public
funds.”

But, FRC in its written response, claimed that it was carrying
out repairs and partitioning of the building while the rent was
running.

The Council also said it was taking steps to utilize the
building and secure a further lease from the landlord.

The council said, ”Management’s response was that, upon the
acquisition of the office accommodation at the Japaul House, there
was need to give the property a face-lift including partitioning
befitting of an office. However, there was change of Executive
Secretary in 2017, which slowed the process of award of contract.
Secondly, the landlord was not willing to renew the tenancy
agreement after the expiration of the current agreement.”

The committee Chairman, Senator Urhoghide, at Wednesday’s
sitting directed that the FRC management should refund forthwith to
the Federation Account the N66 million paid for the said unoccupied
building in 2016.