The Fiscal Responsibility Commission (FRC) on Wednesday revealed that the commission is planning an amendment to its ACT, established in 2007 to secure imprisonment to heads of Ministries, Departments and Agencies (MDAs), robbing the Federal Government (FG) of statutory funds.
The Executive Chairman of the Commission, Victor C. Muruako who disclosed this while briefing House of Representatives Correspondents in Abuja said that these MDAs were presently owing to the federal government over N1.3 trillion unremitted revenues.
Muruako regretted that the agencies were proudly indulging in these unholy practices knowing that they risked no punishment.
He said that several offences were actually provided for in the Fiscal Responsibility Act, without a single accompanying sanction, stressing that heads of the MDAs also realised this, making them to cheat government of its statutory funds with impunity.
The Chairman said as part of the duties of his Commission, they were engaged in several activities to help the federal government make, and save money to fund its annual budgets, especially through the operating surplus by the agencies.
“Generation of Independent Revenue through the payment of Operating Surplus is one aspect of the mandate of the Commission that has added great value to governance.
“Government-owned Enterprises (GOEs) and Corporations are, by the Act, committed to remit 80% of their Operating Surpluses to the Consolidated Revenue Fund (CRF) of the Federal Government.
“The payment of Operating Surplus into the CRF is borne out of the need for government to generate funds in order to meet revenue requirements in its Annual Budget execution.
“It is also important that Corporations make returns on Government’s investment more so because the Corporations neither pay income taxes nor dividends.
“Through the persistent and continuous engagement of MDAs by the Fiscal Responsibility Commission and – especially with the support of the National Assembly – the Federal Government’s share of Operating Surplus from these Corporations has continued to increase over the years.
“From our records, the total figure paid as Operating Surplus since the establishment of the FRC to date is beyond N2.15 trillion which, by the way, could not have been possible without the Act and the Commission, given that there would have been no law, rule, regulation or institution requiring such returns.
“Sadly, many MDAs still persist in defaulting and practically keeping money away from the federal government’s reach for funding its budgets. Our records indicate that over N1.2 Trillion is still in the hands of defaulting MDAs. These figures are confirmed from our analysis of the annual audited financial reports submitted to our Commission by the concerned Agencies.
“Much more is yet out there in the hands of MDAs that either have failed to dutifully audit their accounts or that have done so but choose not to forward copies of their audited financial reports to the Commission as required by law.
“We are taking steps to strengthen the Fiscal Responsibility Act and the Commission. Their are several offences provided in the Act, but no punishment for the offences. Where do we go from here?”, the Chairman queried.
While fielding questions from journalists, Charles Abana, the Commission’s head of legal, disclosed that the proposed amendment were already before the National Assembly, saying, “Act does not contain specific punishment for infractions. This is a major weakness of the Act. We nerd proper sanctions; fines or even imprisonment for defaulters of the Fiscal Responsibility Act.”
Speaking further on the needs of the Commission, the Chairman said, “Section 42 (1) of the FRA 2007 prescribes the setting of limits for debts of the Federal, State and Local Governments. Incidentally, this is yet to be done. This delay has become a cog in the wheel of the Commission’s debt monitoring function and the state of affair makes it difficult, if not impossible, for the FRC to implement Section 42 (3)-(5) of the FRA, 2007.
“We understand that the fact that States are yet to have data on their GDPs is part of the challenge in setting the debt limits. While the Debt Management Office (DMO) relies on the globally acknowledged index of debt-to-GDP-ratio for measuring the sustainability of the nation’s debt profile, the sustainability of debts of respective States is left unmeasured.
“Given the peculiarities of the Governments in the Federation, all States need not have equal access to debt, indebtedness and borrowing. There is therefore the need for expedited action towards setting the limits as provided for in the FRA 2007.”
Culled from The Independent