The Chartered Institute of Treasury Management has picked holes in the Treasury Single Account policy of the Federal Government, saying it is still prone to revenue leakages.
The institute also criticised Nigeria’s procurement laws for frustrating speedy initiation and completion of infrastructural projects.
The Registrar/Chief Executive, CITM, Olumide Adedoyin, at a press conference at the National Assembly in Abuja on Wednesday, said the government should have maintained the Deposit Money Bank accounts operated by the ministries, departments and agencies for revenue collection instead of closing them for the TSA.
Adedoyin said, “Like every government policy, the TSA is a function of just an account; it is not an app, it is not a policy, it is just an account. What the TSA tries to do is to make sure that the government has its resources in place and are able to know what they have at any given time.
“Now, the first step the government was supposed to take was to do what we call cash pulling. Call up your resources from every bank into one single account. Once you do so, those bank accounts you have should not be closed down; rather, you try to moderate them into receiving banks. They receive on your behalf but you cannot disburse from those banks, while at the end of the day you just have an online real-time balance to make sure that what comes in is being accounted for. That was supposed to be the function.
“But what we discovered at the end of the day was that there are some little processes and challenges within that platform because the backend for the audit was not adequately secured. So, if you did not secure the backend, despite being able to make resources and bring those resources, then there is a little bit of opening in the back that could lead to haemorrhaging of resources and so on.
“I think as it is, we have actually reached out to the government on different fora, trying to make them understand that the importance of putting these back ends in check is quite important.”
According to the CITM boss, the government did not put in place a backend which serves as a safeguard for leakages.
Adedoyin also faulted the delay in procurement for capital projects, saying, “Now, you cannot release the funds for the completion of that road all at once, because it has a process of design, a process of building the culverts, bridges, your overlays and every other thing.”
He stated, “What you need to do first and foremost is to be able to design those projects with timelines. Once you design with timelines, release the funds that are responsible. Once those funds are released, make sure they are tied to individual aspects of those contracts.
“While we are doing that, whatever you have as excess, invest those monies in very short term investment processes that would assist the process, even if it is just on commercial papers or government bonds for that period, so that invariably the value of the money would not be lost.
“Once you do this effectively, it would be difficult for anybody to come back and start looking for variation on those jobs. These things, you can put in place as one.”
The CITM, therefore, called for a radical approach, “radical in the sense that the laws governing procurement and other things have to be further domesticated.”
He said, “What do I mean? You make sure that equipment and items that are bought on a yearly basis, that are being wished away could have a much longer lifespan. For example, in the office, you keep buying photocopiers on a yearly basis. Of course, you discover that the copier can even last you five to 10 years, when properly maintained.
“So, those monies on those recurrent things that can be used beyond the length of those life shares could be ploughed back into the system. What happened to those monies? They get stolen and diverted.”
Also, the Technical Advisor, CITM, Daniel Akeju, criticised the nation’s budgeting process and implementation of Appropriation Acts.
Responding to a question, Akeju said, “You mentioned the issue of budget. When the country introduced the Medium Term Sector Strategy in the budgeting system, we were happy because we believed if it followed the way it was supposed to be, we would not lack or have waste of resources.
“I was part of the team that developed the MTSS budget for Bauchi State some years ago. The principle followed helps the state to eliminate waste. What did we do? We examined per department, per ministry what they needed. It is not based on what was done last year, not what was done two years ago, but what is really needed.
“You have to rate these needs and assign figures to them. You need to give which one is most important, which one you need right now, which one we can leave till the new future. You rate them and assign them to three or four years. You attend to them in the order of importance. Anyone that cannot be accomplished in the first year can now be moved to the first batch of next year. It is not the idea of a Director going with his car. This has to do also with what is called per zero based budgets.”
He added, “When we are talking of the international public accounting standard, IPAS; we are talking of capitalising our assets. They say we are presently applying for IPAS but I don’t see it that way, because every year, we budget for the same thing.
“Why should we throw away the chair the Director used and buy another chair and buy another one for the next director? Why should the director go away with the vehicle that was bought just two years ago and another director has to buy a new vehicle. No. All these needs to be capitalised and depreciated just the way it is being done in the private sector. It is when we do this, we can eliminate waste.”
