Suspended NSITF MD awarded ₦4.448bn contracts in one day, minister tells Reps
The Minister for Labour and Employment, Senator Chris Ngige, on Tuesday, shocked the members of the House of Representatives Ad-hoc Committee investigating the Nigeria Social Insurance Trust Fund (NSITF) when he alleged that the suspended MD awarded about 332 different contracts worth about N4.448 billion in one day.
Senator Ngige who appeared on the second day of the investigative hearing being Chaired by Hon Miriam Onuoha further revealed that the controversial contracts were awarded just two days after he left office as Minister in 2019.
The two times Minister of Labour and Employment also informed the Committee that the suspended management committed about 74 different infractions for which they were suspended.
Senator Ngige who insisted that the action taken so far against the affected officials followed due process however hinted that some of the suspended officials would face disciplinary action, adding that that the members of management Committee would be given fair hearing saying “suspension is not dismissal.”
According to him, some of the infractions committed by the management include “extra-budgetary spending, making payment for unapproved expenditure, overspending on administrative issues, irregular direct payment from the Employees Compensation Act, irregularities in staff group assurance policy and making payment for Assurance policy without a policy cover”.
The Minister also revealed that there was none payment of taxes to states leading to the closure of the fund offices in Port Harcourt and Owerri, having a different figure on PAYE voucher and PAYE mandate, engaging solicitors with the approval of the Attorney General of the Federation and making payment to the tune of N33 million to the solicitors also without the approval of the AGF.
In addition, he said the management paid about N180 million to solicitors they hired without the approval of the AGF to handle a vase of a former employee who was supposed to be paid about N60 million.
He said that some payment was made by the fund without the signature of the Managing Director.
While accusing the management of contract splitting and awarding various contracts two days after leaving office in 2019 as Minister following the dissolution of the cabinet, he said the management circumvent the Ministerial Tenders Board.
Ngige also alleged that the management approved for themselves about N9.8 million as leave grant and oversea holiday for themselves and their families for 30 days, flying first class even when such trips were not known to him and were not approved.
He also accused them of irregular payment of salaries to themselves outside their condition of service saying “they jettison the NSITF condition of service. They claimed to have seen a document which is the condition of service of NSITF and fix salaries and allowances for themselves.
According to him, “they earned humongous salaries and allowances and took housing loans for themselves without coming to the Minister.”
He also accused them of failing to submit audited reports to the office of the Auditor General of the Federation, Breach of Personal Income Tax Act/under-deduction of pay as you earn (PAYE) Tax – N1,446,887,167.70, Non-deduction/non-remittance of VAT and WHT – N1,435,711, Irregular payment of unapproved salaries allowances to MD and Executive Directors outside their conditions of service in their letters of Appointment as Political Office Holders.
He also accused them of Transfer of funds from CAPEX without evidence of utilization, Engagement of External Solicitors without obtaining clearance of HAGF, Payment of legal fees without clearance from HAGF, Irregular payment of 1st 28 days allowance to MD/CE and three Executive Directors – political office holders not recognized in extant circular, nor is the NSITF condition of service in support.
They were also accused of Unauthorized Foreign Travels – sponsorship of executive Directors and their spouses to overseas countries for annual LEAVE – about N9.8m each, Foreign International Travels without approvals, Overpayment to contractors due to addition of WHT, Irregular award of contract for the supply of 22 numbers of motor vehicles to NSITF – N146,027,227, Procurement – conversion of contract from the supply of toners to the supply of Toyota Prado Jeep without approval – N48,300,000.
Senator Ngige said the agency of engaged in the procurement of motor vehicle not taken on ledger charge worth N290,414,289, contract split, Contract payment without evidence of the performance of N151,389,021.50, Consultancy services for processing and regularization of the Title Deeds and Survey plans at Era Village Oto Owori, Ijinikin Badagry. Express why _ N120,000,000 – contract execution without a signed contract by both parties.
He said “the interesting thing is that both the Auditor-Generals special periodic check report has been treated with levity especially in areas where the MD and the three Executive Directors had queries for bypassing issues of payments not authorized to themselves by extant circulars and their conditions of services.
According to him, “Evidence that these infractions were brought to parties concerned in the form of queries and their responses to the allegations made against them and given right of reply
“In 2018, I put up an Implementation Committee from the Ministry to implement both the Auditor-Generals special periodic check and the report of the Administrative panel of Enquiry, headed by the then Permanent Secretary – Mrs Ibukun Odusote.
By the time she was redeployed from the Ministry of Labour and Employment in November 2018 to Ministry of Environment, my instructions on the implementation for the 2 reports on NSITF to the best of my knowledge did not receive attention from the NSITF Management
“All attempts and directives to NSITF even at the Ministry Top Management with Parastatals to get the NSITF to respond was futile, till we went for the General Election and I exited as Minister 29 May 2019, of course, they celebrated the exit but all these were captured in my handover notes to the prospective “new Minister of Labour and Employment
“To make matters worse, when I came back in 2019 August, reappointed as Minister of Labour and Employment, right from the 2020 Budget defence and their 2019 Budget performance I realised that instead of making amends from the earlier Auditor General’s report, matters have worsened therefore sought the help of the Auditor General of the Federation and the DG Public Procurement as there was a bazaar of NSITF contract documents being hawked at Wuse and Maitama Abuja for “prospective contractors” on payment of 25% of contract paper value
“Even though the MD and ED Finance and Investment dodged and did not present a well-articulated Budget 2020, the 2019 performance, the latter raised Red flags for all – starting with the 2 Committees of NASS on Labour, Employment and Productivity and the Auditors in the Ministry. Meanwhile, the Special Periodic Check of 2018/2019 undertaken by the Auditors from AuFG later raised even worse infraction than the earlier ones in 2012 – 2017
“Immediately these red flags were raised instructed them to halt all procurements for 2019 and payments of 2018/2019 that had not been done, pending the report of these checks. I brought this situation immediately to the attention of Mr President because the MD and EDs claim they are “well-connected politicians” and as such nothing will touch them hence, they ignored my directives during the Covid-19 and they went on to start payments for all forms of phoney contracts – some executed and some unexecuted
“The 2018/2019 Special Periodic Check/requested from the AuGF had thrown up more of these queries which they could not answer. A quick check revealed extra Budgetary expenditure as against the approved estimate of N1,019,360,520.90.
Payment of unapproved allowances – N118,779,632.40
“Payment for vouchers not presented for Audit inspection (capital vouchers N300,898,994.30), Payment vouchers not posted to the cashbook – N884,701,789.72
“Overspending on Administrative expenses contrary to the provisions of the ECS Act only 5-25% contributions allowed by Act, Irregular Direct Payments from ECS Accounts – N1,476,690,076.78 responded but not satisfactory to Auditors” among others.
He said that ECS contributions inflows – N2,451,474,084.91 and outflows ofN178,468,751,.11 found in the bank Statements was not accounted for in the cash book, while ECS contributions inflows captured on the cashbook but not found in Bank statement amount to N448,053,243.54.
Giving detail of contract splitting, he said the management split contract worth N4,889,320,06 to avoid Ministerial Tenders Board and FEC Scrutiny, violated E-Payment, payments without relevant support documents to the tune of N966,622,231.3.
Senator Ngige told the committee that the suspension of the management had a presidential approval via letter REF: SGF/OP/1.S.3/T/163 dated 19 May 2020.
According to him, “even after the Presidential assent for disciplinary action against the MD and these Officers for this financial breaches, the Chief of Staff to the President (CoSP) still communicated the SGF because of the new circular and the SGF still subjected the Honourable Minister of Labour and Employment to submit the prima facie infractions and serious misconduct in view of circular above. (see SGF Letter SGF 47/S.11/T/15 of 4th June 2020).
“The HML&E complied and submitted the copy of the report and alleged gross misconduct again by letter dated 23 June 2020.
“By letter dated 30th June 2020, the SGF conveyed Mr President’s approval to all the recommendations submitted by my office in respect of issues bordering on the Financial and Procurement infractions and acts of serious of misconduct and referred to the guidance on implementation to a letter from the CoSP and further requested the Minister to avail his office with records of the implementation of Mr President’s approval, especially in the areas of personnel charges.”
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