Financial regulations on remittance of 25 per cent operating surplus null, void ― CAC Registrar
• As Reps query utilisation of over 99 per cent revenue realised in five years
The Registrar General of the Corporate Affairs Commission (CAC), Mr Abubakar Garba, on Wednesday, disclosed that the financial regulations issued by Federal Government on the remittance of 25 per cent operating surplus into the Consolidated Revenue Fund (CRF) “is null and void and inconsistent with the law – Fiscal Responsibility Act, 2007”.
Garba stated this during an investigative hearing into the under-remittance of operating surplus to the Consolidated Revenue Fund by revenue-generating agencies held at the instance of the House Committee on Finance chaired by Hon Abiodun Faleke.
According to CAC financial records presented by the office of the Accountant General, out of the total sum of N13.096 billion revenue generated in 2014, CAC remitted the sum of N596 million against the sum of N3.279 billion (being 25 per cent operating surplus).
In deviant to Federal Government’s directive, in 2015, out of the total sum of N12.808 billion revenue realised by the Commission, the sum of N396.400 million was remitted to the CRF.
The lawmakers also queried the Commission for spending N12.503 billion (99 per cent) out of the total sum of N13.069 billion targeted revenue stipulated in the budget estimates submitted to the National Assembly in 2014.
Also in 2015, out of the targeted revenue of N15.019 billion, the Commission spent N14.849 billion, “which means from the beginning CAC has budgeted to spend 98.9 per cent of its revenue,” the Chairman observed.
When challenged by the lawmakers on why he didn’t challenge President Muhammadu Buhari when the directive was issued, Garba, who assumed office on the 9th January 2020, however, noted that he did not challenge the Authority of the President.
“On how much we are owing the government, it depends on the interpretation of the law. The law supersedes the rules. Regulations can be inconsistent with the substantive law to the extent of this inconsistency, it’s null and void.”
While reacting to CAC Registrar General’s, Hon. Faleke admitted that “the law is superior to regulations,” however observed that “regulations are also made pursuant from enabling provisions of the law. They are the vehicles for conveying the law intends to convey. So to sit here and say that regulations are inconsistent with the law is beyond you.”
Yet unsatisfied with the lawmaker’s position, Garba argued that: “Our actions are guided by directives that took us down from the agencies responsible for enforcing these directives and that’s why we had to go to Accountant General office to present our case.
“What I’m saying is, if there’s any regulation that is made. If there are provisions, I’d like having the constitutional provision and provisions of other laws that are inconsistent with the constitution. What I clarified was that we were guided by what accountant general office advised us and if the fiscal responsibility act has stated that we should pay 25 per cent, we have been paying 25 per cent on the assumption that we are only obliged to pay 25 per cent of our operating surplus. I’m not challenging the authority of the President.”
Members of the Committee also frowned at the orchestrated move by CAC management to spend all the projected revenue accrued to it, with deliberate disregard to the extant financial regulations and Fiscal Responsibility Act, 2007.
Speaking on the development, Hon Faleke referred to the report of the Auditor General of the Federation which called for necessary actions to ensure that CAC and other MDAs are limited to utilisation of 75 per cent of all the revenues accrued in any financial year, and prompt remittances of the 25 per cent operating surplus.
Worried by the failure of the CAC Registrar General and Deputy Director Accounts Department to provide documentary evidence of payments into the CRF, the Committee adjourned to 13th February 2020.
The Chairman also directed the CAC Director General to provide original copies of Treasury receipts and payments of VAT and WHT to Federal Inland Revenue Service (FIRS) as well as bank statements, monthly inflows and outflows, account numbers and bank details used by the Commission.
“We will give you another date to come and face a larger committee, you are expectedly come back on the 13th of February with all relevant documents,” he stated