Senate Finance Committee Cracks Down On Irregularities, Threatens Budget Cuts For Non-Compliance

The Senate Finance Committee has warned government agencies that those failing to account for 2024 funds will receive no allocation in the 2025 budget, highlighting concerns over irregularities found in the financial records of several agencies during its session on Monday.

The warning came during an investigative hearing on internally generated revenue, fiscal accountability and Nigeria's financial management system. The committee's chairman, Senator Sani Musa, said that any agency that does not appear before the committee will risk having no funds allocated for the 2025 fiscal year.

"This performance index exercise on the various MDAs is preparatory to the 2025 budget. Any agency that fails to appear before this committee upon invitation risks zero allocation in the 2025 budget because records of how appropriations made for 2024 are expended must be provided with facts and figures," Musa said, Punch reported.

The committee criticized the federal government's payment system, which required over 700 agencies to process payments through one office. They said that this system has led to inefficiency, project delays, and reduced public trust, particularly in areas waiting for essential infrastructure projects.

The committee observed that the report presented focused only on the accountant-general's office and left out key details about the federal government's overall financial activities.

To address these gaps, the committee invited other relevant agencies, such as the Revenue Mobilization Allocation and Fiscal Commission, the Nigerian Extractive Industries Transparency Initiative, and the NNPCL, for a joint session.

This approach aimed to ensure a thorough review and resolve inconsistencies in the reports. Committee members emphasized the importance of having all stakeholders present together to provide clear and consistent information.

They also expressed frustration over ongoing delays in the release and use of capital budgets. These delays were attributed to inefficiencies in the centralized payment system managed by the Office of the Accountant-General of the Federation.

The committee stressed the need for stronger financial oversight and accountability to improve Nigeria's fiscal policies. The accountant-general explained that the centralized payment system was introduced to address inefficiencies and stop unutilized funds from being carried over each year.

The committee set a deadline for the accountant-general to submit all requested reports by Dec. 11. A follow-up meeting is scheduled for the same day at 2 pm to review the documents.