Following non-compliance with the guidelines on operating surplus by agencies of government, Minister of Finance, Kemi Adeosun, has ordered all to remit to the treasury quarterly.
In a circular issued by the minister, Adeosun was particular about agencies that currently operate outside the budgetary control.
Those in this category NPA, NIMASSA, NAFDAC, JAMB, NTA, NCC, CAC, NECO and have now been compelled to remit 80 percent of their operating surplus to the Consolidated Revenue Fund (CRF)
It would be recalled former finance minister, Ngozi Okonjo-Iweala gave such order in 2012 but not adhered to MDAs.
Section 22(2) of the Fiscal Responsibility Act compels agencies to remit their operating surplus to the CRF, a provision that has been disregarded.
Records have shown very poor compliance with the provision of the Fiscal Responsibility Act. Some agencies have never credited the Consolidated Revenue Fund despite having salary, capital and overhead financed by the Federal Government. Indeed, cost to income rates of 99.8 percent have been the average, meaning that they spend all their internally generated revenue and subventions released to them.
The Minister said such practices are not sustainable in any economic climate and with the current serious economic challenges being faced by Nigeria, can no longer be tolerated. Accordingly, all revenue generating agencies must comply with the circular and cut their costs.
In the circular sent to MDAs, the Minister said revenues generated by all Ministries, Departments and Agencies (MDAs) must be reported on a gross basis prior to any deductions.
Also, all self funded Federal Agencies are to limit their annual expenditures from their internally generated revenues to not more than 75 percent of their total gross revenue, while fully funded agencies are to remit all their internally generated revenue (IGR) to the Consolidated Revenue Fund (CRF)..
The Circular said that henceforth, 80% of the resulting operating surplus by MDAs should be remitted into the Consolidated Revenue Fund (CRF) on a quarterly basis, in accordance with the Fiscal Responsibility Act.
To ensure continual monitoring, the circular required all MDAs funded through the annual budget to submit monthly Expenditure Transcripts and Revenue Returns, to the Office of the Accountant-General of the Federation (OAGF), while agencies not funded through the annual Federal Government budget are to prepare and submit Quarterly Management Accounts including Revenue Returns to the OAGF.
The Minister reminded all MDAs that in line with Financial Regulations (FR) 107, the Accountant-General of the Federation shall carry out routine revenue monitoring and inspection visits to the MDAs to verify compliance with the new guidelines.
The circular said any Accounting Officer/Chief Executive Officer of MDAs that defaults in remitting revenues as appropriate and as when due shall be sanctioned accordingly and the renewal of the tenure of appointment of Accounting Officers/Chief Executive Officers shall be tied to their compliance with the content the new guidelines.
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