Out of the N6.4tn generated by revenue collection agencies in 2017, about N1.5tn was deducted and not remitted into the federation account in violation of the provisions of the Constitution.
The Office of the Auditor-General for the Federation, disclosed this in its audit report for 2017 which was released on Wednesday in Abuja.
The report, which was signed by the Auditor-General for the Federation, Mr Anthony Ayine, said the money was deducted by four agencies without authorisation.
The agencies are the Nigerian National Petroleum Corporation, the Federal Inland Revenue Service and the Department for Petroleum Resources.
The 320-page report said that while the NNPC generated the sum of N2.41tn, it made a deduction of N1.3tn before remitting the balance of N1.07tn into the federation account.
For the DPR, it said the agency generated N733.05bn, deducted and paid N26.77bn into a royalty account before remitting the balance of N706bn into the federation account.
The report also said that the FIRS generated N2.66tn but paid about N2.45tn into federation account.
Ayine in the report expressed concern over the deductions of funds, stating that it had impacted negatively on the funds available for allocation to the three tiers of government.
He made a recommendation to the Accountant-General of the Federation, Mr Ahmed Idris, that all deductions made at source should be stopped as they violated Section 162 of the 1999 Constitution of the Federal Republic of Nigeria.
He added that in view of the unauthorised deductions, all defaulting agencies should be appropriately sanctioned.
The report read in part, “The total revenue inflows to the federation account from the various collecting agencies as per the Central Bank of Nigeria component statements for the period under audit amounted to 6,422,596,646,680.26.
“Department of Petroleum Resources collected the sum of 733,054,301,173.04 but paid a net figure of 706,283,397,141.80 to the federation account after deducting excess proceeds on royalty of 26,770,904,031.24.
“The total amount of 2,653,810,173,226.72 was generated by the FIRS for the period under audit; however, the actual amount paid into the federation account was 2,457,272,701,077.09 after deducting 196,537,472,149.63 being the total excess proceeds on royalty.
“These collecting agencies made deductions from the revenue collected by them. This act contravenes the provisions of Section 162 (1) of the 1999 Constitution which stipulate that ‘The federation shall maintain a special account to be called the federation account’ into which shall be paid all revenues collected by the government of the federation.’
“This has been a regular subject of my reports which has been ignored over the years.”
When contacted, the Head, Communications and Servicom Department, FIRS, Wahab Gbadamosi, requested an electronic email to enable him to check with relevant departments.
He was yet to respond as of the time of filing this report.
However, a senior official in the FIRS told our correspondent in confidence that the service did not maintain a collection account of its own.
The official said all taxes that were collected on behalf of the government by the FIRS were paid into an account domiciled in the CBN.
The official added that the agency did not touch the money before it was remitted into the federation account.
On the other hand, the Head, Public Affairs, DPR, Mr Paul Osu, denied that the agency made any illegal deductions.
“The DPR, as a revenue-collecting agency, ensures inflows of revenues into the federation accounts. It does not have any power to deduct from the revenues,” he said.
He said failure to follow due process could continue to give room to corruption and diversion of public funds for private uses.
“It can lead to abandonment of projects and prolonged delay in completing ongoing projects,” he added.
He recommended that the Minister of Finance should direct the activation of the Procurement Module of the GIFMIS for use across the MDAs.
This, he stated, should be properly followed up to ensure compliance especially through non-release of funds except for certified procurements.
Ayine also urged the finance minister to give directives to enable the GIFMIS Audit Module to give access to all federal auditors for proper monitoring of procurement activities.