301
By Daniel Adaji
The Federal Mortgage Bank of Nigeria (FMBN) awarded contracts worth N264,155,773.53 to companies not registered with the Corporate Affairs Commission (CAC), a clear violation of the Public Procurement Act.
This is according to the 2021 audit report by the Office of the Auditor-General of the Federation (OAuGF).
The audit noted that companies not registered with the CAC cannot fulfill essential eligibility requirements.
“Contractors not registered as a company under CAC cannot prepare 3 years financial statements, cannot file for tax returns with the Federal Inland Revenue Service, and cannot file for registration with PENCOM,” the report stated.
The report warned of the “risk of loss of government funds and/or non-performance” due to the bank’s disregard for procurement rules.
It recommended that only companies with “due registration status with the Corporate Affairs Commission should be considered for any award of contract.”
This alarming discovery is one among several financial infractions detailed in the report.
The auditors found that FMBN also overpaid N36.7m for foreign exchange to fund staff travel, exceeding prevailing exchange rates by nearly 51 per cent.
“The management of the Bank did not exercise due economy,” the report said, citing a loss of N9,650,211.57 as a result.
Another breach involved the misapplication of N78,190,415 from unauthorized expenditure heads.
This violated Financial Regulation 417, which mandates that “votes must be applied only to the purpose for which the money is provided.”
FMBN was also found to have made N3.6m in cash payments in contravention of federal directives mandating electronic payment for all government transactions. The E-payment policy took effect in 2009, but the bank disregarded these rules despite clear guidelines.
The audit flagged an extra-budgetary expenditure of N339,218,391.50 on staff training and computer repairs, done without National Assembly approval. This contravened Financial Regulation 311, which requires that spending in excess of approved estimates be backed by supplementary appropriation.
FMBN also spent N2,430,500 on wedding expenses, violating Financial Regulation 3106 which states that any public officer who makes an irregular payment “shall be recovered from the officer.”
Additionally, the bank paid N81,989,351.10 to management staff for fueling expenses without providing any documentation such as vehicle logs or expense registers.
This, according to the audit, “evidenced wastefulness arising from lack of due economy.”
Despite the gravity of these findings, the management of FMBN has remained silent. When contacted by Pointblanknews.com, an official said, “I will get back to you,” but failed to do so as of the time of this publication.
Pointblanknews.com had previously reported that the bank awarded over N1.2bn in contracts in violation of procurement rules and engaged in bid rigging.