INVESTIGATION: How officials steal Lagos local government dry [Part 3]

INVESTIGATION: How officials steal Lagos local government dry [Part 3]

Official vehicles allocated to past political office holders in Ikeja local government area of Lagos State were not returned at the expiration of their tenure, a 2012 audited report of the council’s books have shown.

Also, no amount was paid by the affected politicians for the cars in compliance with a circular issued by the Lagos State Ministry of Local Government and Chieftaincy Affairs on boarded official vehicles, the documents seen by PREMIUM TIMES have revealed.

“The Executive Chairman, the Council Manager, the Treasurer, the Engineer and the Council H.R.O did not explain this anomaly,” the report of the Auditor-General for Local Governments stated.

The Report of the Auditor-General on the Accounts of Ikeja local government for the year ended 31st December, 2012, revealed that five official vehicles – one Cerato 1.6L car and four Kia Rio cars – allocated to past political office holders were unaccounted for.

Audit queries LGA/INSP/IKJLG/Q.6/F4/2012 of 6th February, 2013, and LGA/INSP/IKLG/Q.7/F3/2012 of 7th November, 2012, issued to the concerned officials were not satisfactorily answered, the report noted.

The audit report recommended the sanction of the council chairman, council manager, treasurer, human resources officer, and engineer in accordance with F.M (Financial Memoranda of the Lagos State Public Finance Management Law 2011) 39.3 (a) 14 which states that the amount for the cars must be recovered “within 30 days soonest.”

Also, an examination of the Advance Ledger of the council showed that N1.4 million represented advances to both political office holders and pensionable staff which were not recovered as at the period under review.

“This is contrary to F.M.16.12 which states that ‘Personal advances, including any administrative charge must be repaid in regular monthly instalment deducted at source from monthly salary payments, the first instalment being payable in the month following that in which the advance was paid,” said the report.

“The Council Treasurer should be sanctioned in accordance with F.M.39.3(c)1 which states that ‘all losses shall be recovered from or surcharged against the defaulting office, where no losses are involved the defaulting officer shall be warned,” it added.

Again, audit query LGA/INSP/IKLG/Q.5/F4/2012 of 6th February, 2013, to the Council Treasurer was not responded to.

An audit examination of the council’s payment vouchers revealed that the local government defrayed N540,000 for various purposes during the period under review without proper accountability, since evidences showing that the expenditure was actually incurred were not attached to the payment voucher nor provided on demand.

“This is contrary to F.M.14.17 which states inter-alia that ‘An official printed receipt must be obtained and attached to the payment voucher in respect of a payment to Government, another Local Government or a Commercial Firm. If the printed receipt covers more than one payment voucher to which the receipt is attached, it shall be entered on the other vouchers.”

“Audit queries Nos.LGA/INSP/IKLG/Q.6/F1/2012 of 9th May, 2012; LGA/INSP/IKLG/Q.5/2012/F3 of 7th November, 2012; and LGA/INSP/IKLG/Q.8/2012/F4 of 6th February, 2013 issued were not responded to.

“This is sanctionable under the provision of F.M.39.3(a)6 which states ‘That within 21 days the affected officer should be surcharged and transferred to another schedule’ while the political office holder should be reported to the Governor and House of Assembly (PAC).

“The Council Manager, Council Treasurer, and the various Vote Controllers should be sanctioned accordingly.”

‘Doubtful expenditure’

Under the sub-heading ‘Doubtful Expenditure,’ the report noted that payment vouchers totalling N460,000 paid to local government officials to defray sundry expenses were dubious and characterized by several irregularities.

“The payments were either not accounted for or retired with self generated receipts; payments were made without being controlled by vote controller; or payment vouchers were not receipted contrary to F.M 14.16,” the report said.

F.M 14.16 states that ‘Payment vouchers shall be receipted by the payee or his authorized agent, and the receipt must state clearly in words and figures the actual amount received and not simply “Received the above amount.” Where the payee is illiterate, his mark shall be obtained and a responsible official, other than the paying officer, shall certify that the amount appearing on the voucher was paid to the proper payee.’

The penalty for the contravention of this Section, according to F.M 39:3(a)6, is surcharging the affected officer within 21 days and transferring him/her to another schedule, while the political office holder is reported to the Governor and House of Assembly.

Audit query No. LGA/INSP/IKLG/Q.9/f3/2012 of 7th November 2012 issued to the council was ignored, the report added.

The Ikeja local government also failed to remit N32.5 million statutory deductions withholding taxes for the period under review to the appropriate agencies contrary to section 19.2(11) of the Guidelines on Administrative procedure for Local Governments 2011.

Furthermore, the statement of cashflow in the financial statements for the year under review did not show the true cashflow trend for several reasons, according to the report.

“The total receipt excluding balance b/f of N579,526,183.62 was at variance with audit cash receipts of N580,776,183.62; the Council Treasurer failed to reconcile the sum of N204,747,401.30 representing purchase and construction of assets with figures in note 6. Also, detailed explanation of advances and loans acquired were not contained in the Financial Statements,” the report added.

Phone calls to Wale Odunlami, the Chairman of Ikeja local government, did not go through. Text messages were not responded to.

A Freedom of Information Request to the Ikeja local government, filed in July, on the claims highlighted in the audit report as well as why it ignored the Auditor-General’s repeated audit queries was not responded to.

Read Part 1 of this report here,  and Part 2 here.

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