The report read:<\/p>\n
Persistent refusal and\/or negligence to comply with the Public Procurement
\nAct in the procurement practices of the Central Bank of Nigeria.<\/p>\n
(A) By virtue of Section 15 (1)(a) of the Public Procurement Act, the
\nprovisions of the Act are expected to comply to \u2018all procurement of goods,
\nworks and services carried out by the Federal Government of Nigeria and
\nall procurement entities.\u2019 This definition clearly includes the Central
\nBank of Nigeria.<\/p>\n
(B) It is however regrettable that the Central Bank of Nigeria, under his
\nleadership, has refused and\/or neglected to comply with the provisions of
\nthe Public Procurement Act (PPA). You will recall that one of the primary
\nreasons for the enactment of the PPA was the need to promote transparency,
\ncompetitiveness, cost of effectiveness and professionalism in the public
\nsector procurement system.<\/p>\n
(C) Available information indicates that the Central Bank has over the
\nyears engaged in procurement of goods, works and services worth billions
\nof Naira each year without complying with the express provisions of the
\nPPA.<\/p>\n
(D) By deliberately refusing to be bound by the provisions of the Act, the
\nCBN has not only decided to act in an unlawful manner, but has also
\npersisted in promoting a governance regime characterised by financial
\nrecklessness, waste and impunity, as demonstrated by the contents of its
\n2012 Financial Statements.<\/p>\n
Unlawful expenditure by the Central Bank of Nigeria on \u2018Intervention
\nProjects\u2019 across the country<\/p>\n
(A) the unacceptable level of financial recklessness displayed by the
\nleadership of the Central Bank of Nigeria is typified by the execution of
\n\u2018Intervention Projects\u2019 across the country. From available information,
\nthe bank has either executed or is currently executing about 63 such
\nprojects across the country and has committed over N163billion on them.<\/p>\n
(B) it is inexcusable and patently unlawful for any agency of government
\nto deploy huge sums of money as the CBN has done in this case, without
\nappropriation and outside CBN\u2019s statutory mandate. It is trite that the
\nexpenditure of public funds by any organ of government must be based on
\nclear legal mandates, prudent costing and overriding national interest.<\/p>\n
Financial infractions and acts of financial recklessness committed by the
\nCentral Bank as reflected in its audited financial statements of 2012<\/p>\n
(A) pursuant to Section 50 of the CBN Act 2007, a copy of the audited
\nfinancial statements of the CBN for the year ended 31st December 2012 was
\nsent to Mr. President. Based on the issues raised in the financial
\nstatement, a reaction was requested from you to enable a proper
\nappreciation of the nation\u2019s economic outlook.<\/p>\n
(B) the response to this query was further referred to the Financial
\nReporting Council of Nigeria. The review by the council, rather than allay
\nthe fears of government, further confirmed concern bout the untidy manner
\nin which you have generally conducted the operations of the CBN.<\/p>\n
Some of the salient observations arising from the review are;<\/p>\n
(A) in a most ironical manner, it has become obvious that the CBN is not
\nable to prepare its financial statements using applicable International
\nFinancial Reporting Standards (IFFS) whereas Deposit Money Banks that the
\nCBN is supervising have complied with this national requirement since
\n2012.<\/p>\n
Undoubtedly, this laxity on the part of our apex bank, apart from calling
\nto question its capacity for proper corporate governance, is capable of
\nsending wrong signals to both domestic and international investors on the
\nstate of the Nigerian economy.<\/p>\n
(B) the provisions of the Memorandum of Understanding (MOU) signed by the
\nCBN and other Deposit Money Banks on Banking Resolution Sinking Fund have
\nbeen breached in a material manner. For example, a Board of Trustees (BOT)
\nto manage the Fund has not been constituted since 2010 when it was
\nestablished. The CBN has however continued to utilise the Fund for certain
\noperations without approval of the said BOT.<\/p>\n
(C) contrary to section 34 (b) of the CBN Act 2007 which provides that the
\nCBN shall not, except as provided in Section 31 of the Act, inter alia,
\npurchase the shares of any corporation of company, unless an entity set up
\nby the approval or authority of the Federal Government,m CBN in 2010,
\nacquired 7% shares of International Islamic Management Corporation of
\nMalaysia to the tune of N0.743 billion. This transaction was neither
\nbrought to Mr. President\u2019s attention nor was a board approval obtained
\nbefore it was entered into.<\/p>\n
(D) the CBN has failed or refused to implement the provisions of the
\nPersonal Income Tax (Amendment) Act 2007. Accordingly the Pay-As-You-Earn
\n(PAYE) deductions of its staff are still being computed in accordance with
\nthe defunct Personal Income Tax Act 2004, thus effectively assisting its
\nstaff to evade tax despite the generous wage package in the CBN, relative
\nto other sectors of the economy.<\/p>\n
(E) the CBN had an additional brought forward to General Reserve Fund of
\nN16.031bn in 2012 but proceeded on a boy age of indefensible expenses in
\n2012 characterised by inexplicable increases in some heads of expenditure
\nduring the year. Examples include:<\/p>\n
1. The bank spent N3.086bn on \u201cpromotional activities\u201d in 2012 (up from
\nN1.084bn in 2011). The bank spent this sum even when it is not in
\ncompetition with any other institution in Nigeria;<\/p>\n
2. The CBN claimed to have expended N20.202bn on \u2018Legal and Professional
\nFees\u2019 in 2011 beyond all reasonable standards of prudence and
\naccountability;<\/p>\n
3. Between expenses on \u2018Private Guards\u2019 and \u2018Lunch for Policemen\u2019, the CBN
\nclaimed to have spent N1.257 billion in 2012;<\/p>\n
4. While Section 6(3)(c) of the CBN Act 2007 provides that the board of
\nthe CBN is to make recommendations to Mr. President on the rate of
\nrenumeration to Auditors, the bank has consistently observed this
\nprovision in breach and even went to the extent of changing one of the
\nJoint External Auditors without notifying the office of the President.<\/p>\n
5. In the explanations offered by the CBN pursuant to presidential
\ndirectives, it offered a breakdown of \u2018Currency Issue Expenses\u2019 for 2011
\nand 2012. Interestingly, it claimed to have paid N38.233bn to the Nigerian
\nSecurity Printing and Minting. Company Limited (NSPMC) in 2011 for
\n\u2018Printing of Banknotes.\u2019 Paradoxically however, in the same 2011, NSPMC
\nreported a total turnover of N29.370bn for all its transactions with all
\nclients (including the CBN).<\/p>\n
6. It is significant to note that the external audit revealed balances of
\nsundry foreign currencies without physical stock of foreign currencies in
\nthe CBN Head Office.<\/p>\n
Questionable write-off of N40bn loans of a bank<\/p>\n
The above issues are only a few of the infractions highlighted by the
\nreview and which point to the gross incompetence and recklessness which
\ncharacterised the operations of the CBN in the period under review.<\/p>\n
However, the CBN also claimed that it paid Air Charter, such as payments
\nto Emirate Airline (N0.511bn), Wing Airline (N0.425bn) and Associated
\nAirline (N1.025bn) to distribute currency by air nationwide. Emirate
\nAirline does not fly local charter in Nigeria, Wing Airline is not
\nregistered with Nigeria Civil Aviation Authority and Associated Airline
\ndoes not have a billion turnover for 2011 because upon enquiry, the
\nmanagement claimed that they have no financial statements and have not had
\nany significant operations for the past two years that will warrant
\npreparation of financial statements.<\/p>\n
The breakdown also include \u201cCurrency Issue Expenses\u201d of N1.158bn and
\nSundry Currency charges of N1.678bn under \u201cCurrency Issue Expenses.\u201d As
\nthey are in 2011 so are similar expenses in 2012. These are difficult to
\nunderstand.<\/p>\n
Other areas of fraudulent activities include<\/p>\n
1. Facility Management N7.034bn in 2012 (N5.751bn in 2011.<\/p>\n
2. Foreign Bank accounts that have been closed offshore were still
\noperational in the General Ledger for over six months after they have been
\nconfirmed as closed accounts by the offshore banks.<\/p>\n
3. The \u201cKnow Your Customer\u201d policy is not properly followed by the CBN to
\nthe extent that the CBN has unknown customer with account balance of
\nN1.423bn since 2008. The CBN claim that it is taking steps to obtain the
\nrequired details regarding the address of the customer.<\/p>\n
Wastefulness<\/p>\n
1. Training and travel expenses N9.24bn in 2012 up from N7.65bn in 2011.<\/p>\n
2. Expenses on \u201cATM offsite policy change\u201d came to N1.045bn.<\/p>\n
3. Expenses on \u201cNon Interest Banking\u201d N1.359bn in 2012 up from N0.977bn in
\n2011.<\/p>\n
The CBN is still very heavy on expenses on \u201cProject Eagles\u201d spending
\nN0.606bn in 2012 up from N63m in 2011.<\/p>\n
Expense on newspapers, books and periodicals (excluding CBN\u2019s
\npublications) is N1.678 billion in 2012 up from N1.670bn in 2011,<\/p>\n","protected":false},"excerpt":{"rendered":"
The report read: Persistent refusal and\/or negligence to comply with the Public Procurement Act in the procurement practices of the Central Bank of Nigeria. (A) By virtue of Section 15…<\/p>\n","protected":false},"author":1,"featured_media":23123,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[17],"tags":[],"class_list":["post-23122","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-exclusive"],"yoast_head":"\n