How FAAC overpaid states N10bn in bailout funds — Auditor-General

Office of the Auditor-General of the Federation has revealed that the Federation Accounts Allocation Committee, FAAC, overpaid states N10bn in bailout funds.

President Muhammadu Buhari had approved the release of the funds in 2015 to help governors pay salaries in their various states, a loan facility that the states are expected repay over a period of 20 years.

How FAAC overpaid states N10bn in bailout funds — Auditor-General
How FAAC overpaid states N10bn in bailout funds — Auditor-General

In the report, however, the Auditor-General, Mr. Anthony Mkpe Ayine stated: “Our review of records at the FAAC secretariat revealed that under the salary bailout arrangement, the sum of N406.368 billion was the total principal amount released to state governments that benefited from salary bailout in 2015 and 2016 as recorded in the Office of the Accountant General of the Federation (OAGF) summary submitted for audit.

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“Whereas audit scrutiny of the documents presented revealed that the actual total principal amount released to the benefiting states were the sum of N416.368 billion, resulting in an overpaid difference of N10 billion

“The FAAC secretariat is requested to explain this overpayment and take steps to correct its accounting records where appropriate.”

The Auditor-General further discovered understated repayments by Oyo and Cross River states, noting that the amount to be deducted from the two states is less than the amount repayable.

“We observed that the computation of the total amount of loan payable by each state on the salary bailout facility was based on the summation of the principal amount and the interest. Our examination of the records revealed that for Oyo and Cross River states, the total amount repayable by the two states was understated by N1.895 billion and N3.571 billion respectively, resulting to a total understated amount of N5.467 billion.

“The Accountant-General of the Federation has been requested to explain the reasons for the reduction in monthly deductions for the two states, and where necessary, re-compute the monthly deductions to arrive at the appropriate monthly deductions that would clear the accounts in 240 months.”

How FAAC overpaid states N10bn in bailout funds — Auditor-General
How FAAC overpaid states N10bn in bailout funds — Auditor-General

“Section 85 (5) of the constitution requires the Auditor-General to submit the report on the audit of the accountant-general’s financial statements to the national assembly within 90 days of receipt of the statements from the Accountant-General.

In the executive summary, Ayine wrote: “The financial statements of the federal government for the year ended 31st December, 2016 were first submitted to me by the Accountant-General of the Federation on 30th June, 2017. Following my preliminary observations, the statements were significantly amended and resubmitted on 29th September, 2017.

“Further amendments to the financial statements led to another re-submission on 29th December, 2017 and 16th January, 2018 before the final version was eventually submitted on 20th March, 2018.”


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