FCT judicial committee flouted procurement law, financial regulations in N866.5m contract awards

The newest federal audit has revealed a sequence of infractions by the Judicial Service Committee of the Federal Capital Territory (FCT JSC), Abuja, in awarding contracts price about N866.5 million in 2023.

The report revealed the FCT JSC’s rampant disregard for procurement regulation, financial regulations and federal authorities’s coverage directives.

According to the simply launched 2024 report of the Office of the Auditor-General of the Federation (OAuGF), the infractions stemmed from weaknesses in the judicial committee’s inner management system.

In some situations, the auditor normal discovered no proof of labor finished for the funds the FCT JSC made to contractors. In different instances, there have been no paperwork to point out that the committee awarded contracts to certified contractors.

According to the report, most of the flagged infractions presumably resulted in the loss or diversion of public funds channelled into the contracts.

The FCT JSC is an establishment of the judiciary established by the Nigerian structure, to supervise judicial appointments, promotion, and self-discipline, in addition to safeguard each the independence of the judiciary and the administration of justice in FCT courts.

One of its key obligations is recommending certified attorneys for appointment to the bench, after conducting, what it called, rigorous analysis {of professional} {qualifications} and expertise, background and integrity checks, and session with related stakeholders.

The physique, which its equal exists throughout Nigeria’s 36 states and on the federal stage because the Federal Judicial Service Commission, can be mandated to make sure “high standards of ethical conduct and professional integrity.”

Key violations

But the brand new 2024 audit report on the 2023 funds of federal ministries, departments and companies revealed that the FCT JSC, statutorily chaired by the Chief Judge of the FCT High Court and run day-to-day by an govt secretary, hardly performed by the principles in a sequence of contract awards. Justice Husseini Baba-Yusuf, the incumbent chief choose of the FCT High Court and chair of the FCT JSC, has served in these roles since 2021.

The audit report recognized 5 contracts aggregately price N866.5 million with their litany of points and the dangers they pose to public funds.

The points embrace award of a contract price N302.3 million to non-accredited native producers or assemblers, irregularities in the award of contracts valued at N192.1 million, and infractions in the award of renovation contracts price N174.2 million.

The two different points are award of N144.2 million price of contract and cost to inactive firms with out due diligence and splitting of N57.3 million contracts to avoid procurement/ approval threshold.

The queried contracts summed as much as N866.5 million in financial worth. The auditor normal’stated their handlings by the JSC raised considerations of doable provide of substandard merchandise, diversion of public funds, lack of public funds, award of contracts to unqualified contractors, doable insider dealing and funds for fictitious transactions.

Meanwhile, this quantity doesn’t embrace the N112.6 million in wage vouchers flagged by the audit report because the sixth problem uncovered in the JSC’s financial information for 2023.

All instructed, the N866.5 million in questionable contract disbursements, coupled with N112.6 million in queried payroll entries, brings the full unaccounted sum on the FCT JSC to roughly N979.1 million for 2023.

The report, titled Annual Report on Non-Compliance/Internal Control Weaknesses in Ministries, Departments and Agencies of the Federal Government of Nigeria for 2024, was submitted by Auditor-General of the Federation (AuGF) Shaakaa Chira to the National Assembly on 17 July.

Volume II of the report covers a bit on judiciary establishments, presenting findings on the infractions by the JSC of the FCT for the interval between 1 January and 31 December 2023. The Code of Conduct Tribunal is the one different physique whose infractions for the year under reference have been captured in the part.

The report revealed that the FCT JSC failed to answer queries on the problems raised.

Award of contract to non-accredited/native assemblers

The audit report flagged a purchase order of “motor vehicle” for N302.3 million by the JSC in 2023. The sort or the make of the car was not disclosed in the report.

However, it revealed that the committee procured and made cost for the provision of the motorized vehicle to contractors “who were not among the list of accredited local manufacturers/assemblers in Nigeria for the procurement of federal government vehicles.”

This motion, in keeping with the report, flouted the provisions of the Financial Regulations 2009 and “does not encourage local manufacturer/industrialisation in Nigeria.”

Paragraph 2305 of the Financial Regulations (2009) referenced in the report states, “As much as it is practicable, goods must be purchased from reputable manufacturers or their accredited agents. When goods are obtained through an agent, the procuring officer will satisfy himself that the goods are authentic.”

The report added that JSC’s motion infringed on paragraph 1 of the Executive Order No. 3 (2017) which states, “All Ministries Department and Agencies (MDAs) of the FGN shall grant preference to local manufacturers of goods and service providers in their procurement of goods and services.”

It equally cited paragraph 1 of the Establishment Circular Ref. No. NADDC.NAIDP/S.137/1/36 dated 17 March 2023, which offered an up to date listing of accredited native producers/assemblers in Nigeria, for the procurement of federal authorities autos.

The report regarded the flouting of the financial regulations and coverage paperwork as “anomalies” that presumably arose from the “weaknesses in the internal control system” on the JSC of the FCT.

These, in keeping with the report, uncovered the federal government to the dangers of “supply of sub-standard vehicles” and “diversion of public funds.”

Award of N192 million with out paperwork

The report additionally revealed a cost of over N192 million to firms with out supporting paperwork displaying the contractors’ {qualifications}.

The report discovered that seven vouchers totalling over N192 million have been raised and the cash was paid in favour of various firms for the availability of providers and provide of products to the JSC.

But the JSC didn’t current any documentary proof corresponding to tax clearance certificates, Corporate Affairs Commission (CAC) certificates of registration, PenCom certificates, Industrial Training Fund certificates, Nigeria Social Industrial Trust Fund certificates, amongst others, to point out that the contractors have been certified bidders.

This lack of compliance, in keeping with the audit report, contravenes Section 16(7) of the Public Procurement Act 2007, which states that “The procuring entity may require a bidder to provide documentary evidence or other information it considers necessary as proof that the bidder is qualified in accordance with this Act and the solicitation documents and for this purpose any such requirements shall apply equally to all bidders.”

No commercial, no bid paperwork submitted for N174.2 million contract

Similarly, the JSC awarded contracts price over N174.2 million to 4 contractors for renovations and rehabilitation with none commercials, bid paperwork submitted, or an in depth bid analysis report, stated the account normal of the federation’s report.

Also in keeping with the report, the contractors’ recordsdata lacked details about the contractors, pictorial proof of the work finished, or proof that the contractors had been submitting their annual tax returns with the Federal Inland Revenue Service (now the National Revenue Service) and that “the company was inactive on the CAC dashboard.”

There was additionally no proof of procurement due course of because the JSC couldn’t produce related paperwork corresponding to commercials carried out in two nationwide dailies, bid paperwork submitted, and detailed bid analysis report.

The committee, by its actions or omissions, the audit report stated, violated part 24(1) of the Public Procurement Act 2007 and paragraph 2907 (i) of the Financial Regulations.

Section 24(1) of the Public Procurement Act offers that “Except as provided by this Act, all procurements of goods and works by all procuring entities shall be by way of open competitive bidding.”

Paragraph 2907(i) of the Financial Regulations (FR) (2009), which the audit report stated the JSC additionally flouted, states, “To ensure transparency and accountability, achievement of value for money, economy and efficiency, and equity and fairness, all procurements falling within the Bureau’s thresholds shall be by way of Open Competitive Bidding.”

The report once more attributed the anomalies to weaknesses in the interior management system on the JSC.

It added that these pose the dangers doable of insider dealing – utilizing inner data to unfairly win public contracts. It additionally stated the funds meant for the contracts might be diverted.

Award of N144 million to firms with inactive CAC and FIRS standing

The report additionally flagged the JSC’s contracts price over N144 million awarded to eight firms with inactive standing on each CAC and FIRS portals.

This violates Section 16(5) and (6) of the PPA, which stipulate that “A supplier, contractor or service provider may be a natural person, a legal person or a combination of the two….”

The audit report additionally referenced Section 16(6) of the PPA (2007) states, “All bidders in addition to requirements contained in any solicitation documents shall (b) possess the legal capacity to enter into the procurement contract: (c) not be in receivership, the subject of any form of insolvency or bankruptcy proceedings or the subject of any form of winding up petition proceedings; (d) not have fulfilled all its obligations to pay taxes, pensions and social security contributions.”

The auditor normal stated the infractions, attributable to weak inner management, posed the chance of lack of public funds and diversion of public funds.

Contract splitting

The audit additionally discovered that the JSC unduly cut up a N53.6 million price contract for the provision of computer systems and laptops into six models.

It noticed that the contract was for the provision of the identical merchandise and should have been awarded as a single contract, however was reasonably cut up into six at a worth that fell throughout the approval threshold of the manager secretary.

It added that each one six smaller contracts have been awarded about the identical interval in 2023, declaring that the splitting enabled the secretary to avoid tenders’ procedures.

Also, the JSC failed to supply paperwork displaying the distribution of the computer systems/laptops, information of officers to whom they have been issued, and particulars of their respective areas or person departments.

Section 20(2) of the PPA cited as a authorized provision the transactions breached, states, “The accounting officer of every procuring entity shall have overall responsibility for the planning of, organisation of tenders, evaluation of tenders and execution of all procurements and in particular shall be responsible for… (e) ensuring that no reduction of values or splitting of procurements is carried out such as to evade the use of the appropriate procurement method.”

The report stated the “anomalies could be attributed to weaknesses in the internal control system.”

It added that these transactions posed the dangers of funds for “fictitious transactions” and diversion of public funds.

Suspicious N112.6 million wage vouchers

The report additionally faulted the committee for failing to current 93 wage vouchers totalling over N112.6 million, creating the chance of funds to non-existent employees members and a violation of paragraph 601 of the Financial Regulations.

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This provision mandates that “All payment entries in the cash book/accounts shall be vouched for on one of the prescribed treasury forms. Vouchers shall be made out in favour of the person or persons to whom the money is actually due. Under no circumstances shall a cheque be raised or cash paid for services for which a voucher has not been raised.”

No response from FCT JSC, audits’ suggestions

According to the audit report, the committee failed to answer queries on any of the six infractions.

Therefore, the auditor normal really useful that the Secretary of the FCT JSC, Omolola Akindele, account for all of the funds, get well and remit them to the treasury and ahead the proof to the Public Accounts Committees of the National Assembly.

Failure to conform attracts sanctions, the report acknowledged.