ABUJA, JANUARY 11, 2017 – The Federal Government is set to commence an audit of the utilization of Federal Governments bail-out funds to state governments amounting to about N510 billion last year.
Consequently, eight accounting firms have been appointed to review how state governors have been spending the said money and whether or not they complied with stipulations of the Fiscal Sustainability Plan (FSP), which was the basis for the funds.
The firms are: KPMG, Ernst & Young, PriceWater Coopers, PKF, Muhtari Dangana & Co, S. S. Afemikhe & Co, as well as Ahmed Zakari & Co and Ijewere & Co.
Minister of Finance, Mrs. Kemi Adeosun, said in Abuja yesterday that the accounting firms would evaluate the states based on their implementation of the 22-point FSP.
According to her, the ministry has been monitoring the utilization since last year but found it necessary at this stage to employ independent firms for the “monitoring and verification of the States against agreed milestones under the FSP.”
She said that the firms were “expected to vigorously monitor, evaluate and verify the performance of the States against the agreed milestones set by each State Government under the Fiscal Sustainability Plan.”
The minister warned that state governments that fail to implement the action plans, as stated, would be taken off the facility with immediate effect.
The funds, under a programme of ”Budget Support Facility”, a 12-month standby loan facility, was designed to bring immediate financial relief to State Governments and enable them meet their financial obligations; with a monthly amount of N50 billion in the first three months and N40 billion available for the remaining nine months to 35 States.
The Fiscal Sustainability Plan is a 22-point reform programme which commenced in June, 2016 with requirements including increasing internally generated revenues, introduction of biometric payroll, publication of audited annual financial statements, and reduction of wastages by establishing efficiency units.
Mrs. Adeosun introduced the FSP in 2016 to which State Governments acceded, with the view to enhancing fiscal prudence and transparency in public expenditure.
The Plan is part of the nationwide Public Financial Management Reform which is being implemented by the administration of President Muhammadu Buhari.
