Our sources said the audit covered the period from 2009 to 2011 when elected council chairmen and heads of personnel management committed the fraud. The audit report was done by the auditor general in charge of local governments.
Our correspondent obtained a classified document titled “Review Of Report Of The Auditor General (Local Governments) On The Accounts Of The 25 Local Government Councils For The Year Ended 31st December 2009, 2010 And 2011 By The House Committee On Public Accounts Of The Delta State House Of Assembly, Asaba.” The document was signed by the chairman of the legislative committee, Olorogun Dennis Omovie, as well as its members, including Mr. Joseph Oshevire, Ms. Omawunmi Udoh, and Mr. Oboro Preyor. The report revealed that billions of naira was siphoned into private pockets by corrupt council chairmen and the HPMs during the review period.
The report showed that, within the review period, the 25 local government councils had a total of N5.26 billion as the book value of their cash and bank balances, which included IOU’S. Yet, the auditor general for local governments could not certify that there were cash balances to justify the paper sums. In addition, the audit revealed that there were no banks reconciliation statements and certificates to confirm the veracity of the bank balances in the accounts of the audited councils.
The audit review committee’s report also indicated that the 25 local government councils invested the total sum of N481 million, which supposedly included shares in Urban Development Banks Loan stocks. However, the auditor shockingly discovered that these investments were mere book value and could not be traced to any bank accounts maintained by the councils.
The legislative committee also unearthed the fact that unretired advances made by the local government councils stood at N22.87 billion. The report revealed that cash was supposed to be advanced to local government council officers as personal advances in the form of loans and touring advances which were expected to be retired over time. However, the bulk of the councils’ fund was given out as non-personal advances to officers to make office purchases, effect repairs and execute direct labor projects. These advances ought to have been retired on submission of relevant reports showing an end to the transaction or project execution at the end of each calendar year in which the advances were granted. The report found that the retirements of the advances were never made at year’s end.
The report stated that the actual expenditure incurred was therefore not properly accounted for and this meant that the expenditure figure was regularly distorted, representing a deceptive figure.
The legislative committee was shocked that the local councils regularly placed such funds as withheld tax, union dues, retention fees, and Pay As You Earn (PAYE) on deposit accounts on behalf of the federal and state governments as well as other institutions and individuals. Yet, the funds, which amount to more than N4.36 billion, remain outstanding and unremitted to the beneficiaries.
The committee’s report stated that these deposit balances were supposed to have been remitted to appropriate government bodies, agencies and individuals as they were monies collected at source for various types of services rendered to the councils. But while the books of the councils carried credit balances reflecting these deposits, there was no cash reflecting the deposits as they had indeed been misappropriated by the councils.
The committee also discovered that the 25 councils had outstanding bank loan balances of more than N1.9 billion over the period under review. The loans were not only obtained without appropriate authorization, they were also not tied to any specific project or expenditure. In addition, the financial statements of the councils for the period under review showed that N3.9 billion represented excess expenditure over and above the approved estimates. Yet, there was no evidence of any supplementary budget to cover the unreasonable and unauthorized excess expenditures. Besides, the excess expenditures lacked legislative backing and violated section 56 of the local government law (2004) as amended.
The committee also uncovered the fact that the councils squandered N11.9 billion on trips, seminars, environmental sanitation, fumigations, as well as so-called enlightenment campaigns. These expenditures were largely contrary to regulations. More than N450 million was spent without accompanying receipts.
In all, the report found that the councils incurred expenditures of N3.3 billion on irregular, unreasonable and unauthorized expenditures for the period under review.
The legislative committee underlined that the financial activities of the councils during the audited period showed clear violations of standards stipulated in the financial memorandum as well as local government law.
The committee recommended that the local government chairmen who engaged in the excess expenditures be invited to the floor of the state assembly to answer questions on their administration and disbursement of funds. “The local government chairmen as well as the treasurers and internal auditors of the various councils should be invited to the House for questioning,” a committee member told SaharaReporters. He added that those implicated in such massive misappropriation should be barred from holding public office in the future.
SaharaReporters learned that the committee was insisting that all advances granted to council personnel must be reconciled and retired within a period not exceeding three months from the date it was granted. It also wants all councils to prepare and submit returns on all outstanding deposit balances in the books. The committee also wishes to receive bank statements showing verifiable balances within two weeks from the presentation of their report. “Any council that fails to comply strictly with the requirement should face appropriate sanctions,” said a committee member.
The 25 local government councils in Delta State are notorious for their patterns of misuse of public funds. A source in the state accused the Anthony Oviri Uto, chairman of the Ughelli South Local Government Transition Committee, of handing N5 million to Governor Emmanuel Uduaghan for the governor’s 25th marriage anniversary. The source alleged that MMr. Uto also withdrew another sum of N5 million from council coffers in the name of special environmental sanitation exercise which was never done. He accused the chairman of squandering N9 million on basic traveling allowances.
Last week, Mr. Uto hosted selected journalists working in his council area. One reporter at the party disclosed that he and others received N10,000 each. The move was seen as a strategy by Mr. Uto to ensure that reporters do not focus on his questionable expenditures. Click to signup for FREE news updates, latest information and hottest gists everyday
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