Naijaonpointinvestigation identifies 44 payment vouchers allegedly processed without mandatory internal audit checks, 40 contracts with no evidence of competitive procurement procedures, and six contracts allegedly split across three companies.
TRACKNEWS ONLINE
A fresh investigation by NaijaonpointOnline has uncovered alleged financial and procurement irregularities totalling ₦10,428,786,643.79 at the Nigeria Export Processing Zones Authority (NEPZA) during the 2021 and 2022 financial years, when Professor Adesoji Adesugba served as the agency’s Managing Director.
Documents reviewed by Naijaonpointindicate that the reported irregularities involved three categories of transactions: payments allegedly processed without mandatory internal audit checks, contracts for which evidence of competitive procurement procedures was reportedly unavailable, and contracts allegedly split in ways that raise questions about compliance with public procurement rules.
The transactions identified in the findings amount to more than ₦10.4 billion, raising questions about NEPZA’s financial controls, contract award procedures and compliance with regulations governing the expenditure of public funds.
The findings, however, require clarification from NEPZA and the relevant oversight authorities. The absence of supporting documentation in the records reviewed does not, by itself, establish that the transactions were fraudulent or that any individual committed an offence.
₦5.74BN PAID THROUGH 44 VOUCHERS WITHOUT MANDATORY AUDIT CHECKS
The first category of alleged irregularities concerns 44 payment vouchers valued at ₦5,747,803,846.00, issued to 44 contractors for various works and services across the two financial years.
According to the documents reviewed by TrackNews, 22 of the vouchers were processed in 2021, while another 22 were processed in 2022.
The investigation found that the vouchers were allegedly processed without evidence that the mandatory prepayment checks required under Paragraph 1705 of the Financial Regulations 2009 had been completed.
The regulation requires the Head of Internal Audit to conduct a 100 per cent prepayment check on payment vouchers before they are forwarded to the Central Pay Office.
However, the records reviewed by Naijaonpointreportedly showed that none of the 44 vouchers had been passed by NEPZA’s Internal Audit Unit.
If confirmed, the alleged failure would raise questions about the effectiveness of the authority’s internal financial controls and the procedures used to authorise payments to contractors.
The requirement for prepayment checks is intended to ensure that payments are supported by the necessary documentation and comply with applicable financial regulations before public funds are released.
Naijaonpointcould not independently establish from the material provided whether the payments were subsequently audited, whether the relevant services were delivered as contracted, or whether the transactions resulted in any financial loss to the government.
₦3.79BN IN CONTRACTS WITH NO EVIDENCE OF COMPETITIVE BIDDING
The second category involves 40 contract payment vouchers valued at ₦3,792,483,416.54, covering 40 contractors.
The documents reportedly identified 22 vouchers in 2021 and 18 in 2022.
According to the findings, the records reviewed did not show evidence that the required procurement procedures, including advertisement, competitive bidding, technical evaluation and financial evaluation, had been conducted before the contracts were awarded.
The investigation also raised questions about whether the contractors had been assessed against the applicable qualification requirements.
Paragraph 2909 of the Financial Regulations 2009, cited in the findings, sets out requirements relating to bidders’ technical qualifications, equipment, manpower capacity, legal standing, tax compliance and relevant records concerning fraud or financial misappropriation convictions.
Naijaonpointfound no evidence in the records reviewed that the 40 contracts had been certified against these requirements.
The absence of the documentation raises questions about how the contractors were selected and whether the procurement process complied with the applicable regulations.
If the required procedures were not followed, the transactions could attract scrutiny from the relevant procurement and financial oversight authorities.
However, the findings presented to Naijaonpointdo not independently establish whether the documentation exists elsewhere within NEPZA, whether any applicable exceptions were invoked, or whether the contracts were executed satisfactorily.
These issues require verification through a review of the original procurement files, evaluation reports, approvals and payment records.
SIX CONTRACTS WORTH ₦888.49M ALLEGEDLY SPLIT
The third category concerns six contracts valued at ₦888,499,381.25, allegedly awarded to three companies through arrangements that divided similar or identical scopes of work into separate contracts.
According to the findings, each of the three companies received two contracts covering the specified categories of work or supplies.
The transactions identified include:
1. Mini-buses for empowerment in Osun East Senatorial District
Two payments of ₦47,746,125.00 and ₦96,492,250.00 were reportedly made for mini-buses intended for an empowerment programme in Osun East Senatorial District.
2. Motorcycles and deep freezers for farmers
Two separate contract payments of ₦99,576,667.50 and ₦299,068,917.50 were identified for motorcycles and deep freezers intended for farmers across Nigeria’s six geopolitical zones.
3. Road rehabilitation in Lagos
Two payments of ₦188,149,080.00 and ₦158,466,341.25 were identified for road rehabilitation projects in the Mushin and Oshodi-Isolo federal constituencies in Lagos State.
The investigation raised questions about whether the contracts were structured separately in a manner that avoided the procurement method or approval thresholds that would otherwise have applied.
Section 20(2)(e) of the Public Procurement Act 2007, cited in the findings, addresses the responsibility of the Accounting Officer of a procuring entity to prevent the splitting or reduction of procurement values for the purpose of evading the appropriate procurement method and its corresponding approval threshold.
If the contracts were deliberately divided to circumvent the applicable requirements, the circumstances would warrant examination by the relevant procurement authorities.
However, determining whether unlawful contract splitting occurred would require a review of the contract documents, procurement plans, approval thresholds, award dates, project specifications and the relationships between the individual transactions.
QUESTIONS OVER NEPZA’S FINANCIAL OVERSIGHT
Taken together, the three categories of transactions raise questions about the controls applied to public expenditure at NEPZA during the 2021 and 2022 financial years.
The alleged failure to conduct mandatory prepayment checks concerns the procedures used to authorise payments. The reported absence of competitive procurement documentation raises questions about contractor selection, while the alleged splitting of contracts concerns compliance with procurement methods and approval thresholds.
The combined value of the three categories is ₦10,428,786,643.79, according to the figures contained in the findings reviewed by TrackNews.
The central issue is whether NEPZA maintained and enforced the financial and procurement safeguards required by law during the period under review.
The transactions also raise questions about the roles of the relevant accounting, internal audit, procurement and approving officers responsible for ensuring compliance with applicable regulations.
Nevertheless, the value of the transactions should not be interpreted as the amount of money stolen or lost. The findings concern alleged procedural and procurement irregularities; establishing financial loss, fraud or individual culpability would require further evidence.
ADESOJUGA’S TENURE UNDER SCRUTINY
Professor Adesoji Adesugba was NEPZA’s Managing Director during the period covered by the reported transactions.
The findings therefore place the authority’s financial management and procurement oversight during his tenure under scrutiny.
However, the information reviewed by Naijaonpointdoes not establish that Adesugba personally authorised every payment, directed the alleged irregularities or knowingly approved any breach of the applicable regulations.
Establishing individual responsibility would require examination of the relevant approval documents, delegation of authority, audit reports, procurement records and correspondence associated with the transactions.
The appropriate authorities would also need to determine whether the alleged procedural failures resulted from administrative lapses, deficiencies in documentation, deliberate circumvention of procurement rules or other circumstances.
CALLS FOR DOCUMENTARY VERIFICATION AND ACCOUNTABILITY
The findings warrant a comprehensive review of the 44 payment vouchers, the 40 contract transactions and the six contracts alleged to have been split.
Such a review would help establish whether the mandatory internal audit checks were conducted, whether competitive procurement procedures were followed and whether the contract arrangements complied with the Public Procurement Act.
It would also clarify whether the goods, services and works covered by the contracts were delivered in accordance with their terms and whether any financial loss occurred.
NEPZA’s response will be important in determining whether the reported gaps reflect missing documentation, procedural failures or substantive breaches of the applicable rules.
TRACKNEWS ONLINE will continue to examine the available records and seek clarification from NEPZA and the relevant oversight authorities.
The findings reported here concern transactions from 2021 and 2022. They should not be treated as a final determination of wrongdoing by the agency or any individual without independent verification and an opportunity for the parties concerned to respond.
TRACKNEWS ONLINE — Investigating Public Spending, Demanding Accountability.