22/08/2020
Alleged N1.08bn corruption scandal hits DMO
AUGUST 22, 2020
…Office operating on temporary files, fake documents
…Staff claim estacodes of oversea, local trips not embarked on
The Debt Management Office, DMO is currently enmeshed in corruption scandal, Saturday Vanguard can report. Money amounting to N1.08 billion is alleged to be lost from 2017 till date, thereby raising corruption cases the country is battling.
It was learnt that the large-scale financial wrongdoings in the office would likely draw the attention of anti-graft agency, the Economic and Financial Crimes Commission.
The corruption is allegedly being perpetrated through various means ranging from awards of contracts, operating on temporary files, unauthorized overseas trips, organization of fictitious events, production of fake transport receipts and destruction of official documents.
Chronicle of frauds
In December, 2017, the office requested the then Minister of Finance, Kemi Adeosun to approve the sum of N90 million to cover travel expenses to states for eight DMO Staff to carry out reconciliation of the Paris Club Refunds. Adeosun approved N60 million for the exercise.
The money was released to the DMO via AIE No. CMD/SW/REC/008/2018 dated 12th January, 2018 but the members of staff nicknamed ‘the Task Force’, we gathered, never travelled to any states.
They rather worked in-house to conclude the assignment, using the records already in the possession of the DMO.
It was gathered that the money was subsequently withdrawn in tranches, brought to the office and distributed to the staff contrary to extant regulations
The first tranche of the money, it was learnt, was N4.8 million, the 2nd, 3rd & 4th tranches were released in the sum of N20 million each and N15.2 million respectively totaling N60 million.
It was gathered that the eight staff of DMO who did the work were only given about N2,500,000 each on the average, making a total of about N20 million with the balance of N40 million allegedly diverted.
Incidentally, the money which was an advance payment from the Ministry of Finance to DMO has not been retired till date.
In November, 2019, the office also approved money to be paid for events which included sensitization workshops on “various products recently introduced” by DMO in four commercial cities of Ibadan, Kaduna, Port Harcourt and Owerri. The events and trips, for which a total of N130 million was expended, it was gathered, never existed or took place.
N401.3million paid on contract splitting, media consultancy, using temporary file (T1- T1 million)
Between 2018 and June, 2020, the office had approved the payment of about N401,348,818.00 for an unknown media consultancy firm believed to be fake without due process.
Contracts were said to have been split and awarded to the vendor on monthly basis for each project, exceeding the monetary thresholds of the office, depending on the nature of the project.
By the act establishing the office, the DMO’s approval power, it was learnt, is not expected to cross the threshold of N2.5m million. Figures outside this amount pass through the DMO’s tenders board to be discussed by other accounting officers who will determine the viability and the propriety or otherwise of the project.
Where it exceeds the approval powers of the boards, it is then taken to the ministerial tenders board for approval and or the Federal Executive Council, FEC as the case may be.
This, however was done without an active file to establish the history of the transactions but in a Temporary File (T-File) ranging from T1 to T1million.
It was gathered that payments were however made.
Interestingly, in a transaction of N10 million for instance, the invoice would be broken into smaller amounts and paid to the same vendor on the same date and on the same project in a bid to make them fall within the office threshold.
Reckless approval of projects totaling N350 million above threshold
There is also an approval for projects whose amounts were beyond the power of the office. These projects which the aggregate is estimated to the tune of over N350 million were supposed to pass through the DMO’s tenders board or Ministerial tenders board. But that was not the case as due process was not adhered to, an offence which contravenes Section 17 (ai-ii) of the Public Procurement Act, 2007 and Section 2906 and 2916 of the Financial Regulations and other relevant sections of the Act and extant laws.
False claims of funds with fake receipts for events totaling about N29.9 million
The office also operates on fake receipts and invoices in the guise of weekend work refreshment and other activities. It was alleged that so far, claims of funds amounting to N29,929,900 had been made.
Approval and receipt of estacode for N56m unauthorized foreign trips
Similarly, the office enriches itself with payments of estacode and air tickets for foreign trips totaling about N56 million without the approval of relevant authorities as required by extant circular HSCF/CSO/HRM/POL. 1402/1 of 2015 and 2016.
Collection of N3 million duty tour allowance for trips never embarked upon
The office also has the penchant of collecting money for trips not embarked upon and such refunds were not being paid back to the treasury.
Payment of N50 million Business class flights for trips
Contrary to the circular No. SGF/OP/1/S.3/1753 of November 2016 of the Federal Government, members of the top management team used business class tickets for foreign trips for which about N50million may have been expended even on trips not approved by the ministry of finance.
Suppression, falsification and destruction of official records
On September 12, 2019, there was a request by a top official for the approval of the Minister of Finance, Budget & National Planning, Mrs. Zainab Ahmed to embark on a trip to the United States for the 2019 Annual Meeting of the World Bank Group and the International Monetary Fund in Washington DC scheduled to hold from October 14 – 20, 2019 at Washington DC.
A Travel File with No. DMO/DG/042/725 was sent to the Finance & Account Unit of DMO for payment with no approval of the minister for payment.
The payment was however not processed owing to the intervention and query of the Internal Audit & Control Unit which stopped the payment.
The file with the query of the Internal Audit Unit was later to disappear. However it later resurfaced for payment of the same trip, same amount, same date and venue with a new File No. DMO/DG/005/T2 where an approval for travel was purported to have been directed by the Ministry of Finance, Budget & National Planning.
Inflation of FG’s floatation cost budget
This paper learnt that there had been requests for funds not needed into the Federal Government of Nigeria, FGN Bond floatation Cost Account, thereby increasing the cost of issuance of Bonds and by extension increasing the total debt burden and debt stock in a bid to siphon the funds.
But this has always met the resistance of some department of the Office.
For instance, in 2018, the office closed Account with a balance of about N2.68 billion and in 2019, without minding the huge balance, it also requested for extra funds without refunding the balance of that of 2018 leading to a huge balance of about N4.3billion at the close of 2019 Account.
Following the excess money in the account, the Office went on expenditure spree.
For example, a certain communication outfit was paid the sum of N22 million through a Department called Market Development Department but was stopped by Internal Audit & Control.
The infractions, as gathered had set the management on a collusion course and affected the efficiency of the Debt Management Office which may be inimical to the overall agenda of the President Buhari led government.
