The Corporate Affairs Commission (CAC), one of the revenue generating agencies of the Federal Government, has operated in contradiction as a liability rather than generate income for government since 2016, documents submitted to the House of Representatives have shown.
In four years, CAC spent N7.738 billion above its earnings, according to the documents.
The revelation came to the fore at the recently concluded interactive sessions between the House Committee on Finance and government ministries, departments and agencies (MDAs), to gauge revenue projections ahead of the 2022–2024 Medium Term Expenditure Framework (MTEF), and Fiscal Strategy Papers (FSP).
However, in the course of engaging with the CAC, series of documents tendered regarding budget performances in the last five years threw up more questions than the management of the commission could answer.
Apart from 2020 when the commission made a surplus of N5.9 billion, a careful examination of the documents presented to the House revealed that it has been spending far above its generated revenue since 2016, leaving the committee to wonder where the extra expended funds came from.
The records showed that the CAC spent over N2.483 billion above its revenue in 2016, N1.239 billion in excess in 2017, N988 million in 2018, N1.083 billion in 2019 and N1.945 billion in the first quarter of 2021.
The records also revealed that the CAC made a huge expenditure in both local and foreign travels between 2016 amounting to N434.451 million for local travels and N336.649 million for foreign travels, amid complaints from staff that training exercises and trips both local and foreign have not been forthcoming in last five years.
Some middle level and management staff contacted by Daily Independent denied making any official journey within the period under review, whilst noting that if such trips were undertaken, the beneficiaries must have done so secretly.
According to them, since the coming of the President Muhammadu Buhari-led administration, local travels in the agency had become scarce, let alone foreign trips, just as they wondered how the said amount could have been spent on trips without them partaking in any.
A senior staff, who spoke under the plea of anonymity, urged the Parliament to “demand records of such trips in the form of flight tickets, hotel accommodation receipts, training certificates, as well as statement of accounts bearing estacode payments and for what purpose and date of receipt.”
Even though the Registrar General, Mr. Garba Abubakar, told lawmakers that the commission has not made any new recruitment for the past three years, the document revealed that it spent about N2.9 million, N1.059 million and N1.574 million for “new staff orientation/certificate verification exercise in 2018, 2019 and 2020, respectively.”
Another unverified claim by the commission’s management is the purchase of “staff uniform” to the tune of over N220 million in an agency where corporate dressing is mandatory for employees.
Investigation by this newspaper revealed that only drivers, not up to 100 nationwide wear uniform in the commission, as security guards who work at the commission are outsourced from private security firms.
However, the documents before the House reveal that the agency spent N51.890 million for staff uniform in 2016, N52.054 million in 2017, N53.710 million in 2018, N570,750 in 2019, N9.783 million in 2020 and N52.050 in the first quarter of 2021.
Similarly, it spent N25.905 million and N6.393 million on what it described as commission members expenses and commission members allowances in 2020, with the documents revealing further that the CAC has already spent N20.833 million and N10.416 million as at the end of May, 2021 on the same subhead.
It was also observed that the commission budgeted a whopping N25 million as audit fees for the 2021 fiscal year and another N20 million for what it referred to as “QMS Audit expenses,” while it has already spent N17.2 million as audit fees as at the end of May 31, 2021 and another N6.6 million on QMS expenses.
It also planned to spend a whopping N155 million on consultancy in 2021 and as at the end of May, 2021, it has expended N32.2 million of the amount, while spending N142 million at the end of May on ease of doing business, out of a budget of N330 million.
Recall that the House of Representatives Committee on Finance frowned at huge unexplained expenses being carried out by agencies of government with a view to denying government accrued revenue at its recent interactive sessions with ministries, departments and agencies of government.
It also frowned at non remittance of revenue to government coffers and over budgeting as well as duplication of projects.
The committee had accused the Corporate Affairs Commission (CAC) of deliberately cooking up figures to deny government revenue from the agency and spending revenue it has not generated.
Chairman of the Committee, Hon. James Abiodun Faleke, at the session with CAC directed the Office of the Accountant General of the Federation not to give the commission any budgetary allocation for 2022 until all financial issues concerning the agency has been cleared by the committee.
The commission is also to reconcile all of its financial records with the Fiscal Responsibility Commission and come back to the committee on September 17 when it will reconvene to conclude its assignment.
Also, the Registrar General, Alhaji Garba Abubakar, had told the committee that revenue generated by the commission in the past was not enough to cover its expenditure and therefore made no remittance to government coffers.
He said further that “over the years, we have operated in a very difficult environment and until last year, our revenue could not support our expenditure. For the first time since our establishment, we were able to record a revenue of N19 billion.
“In 2018, we spent about N12.2 billion while making revenue of N11.2 billion. What happened is that we had to carry over some of the liabilities. These liabilities were mainly pension deductions, tax and other statutory deductions which were not being paid as and when due. That continued until 2020. We had to settle most of the back log.
“Deductions were being made but they were not remitted to the appropriate quarters because the money was not enough to meet our operations. The same thing with tax. What was happening was that third party bills were being paid,” he said.
Daily Independent also gathered that the finance and accounting staff responsible for the preparation of the budget documents laid before the House have been transferred out of the commission’s headquarters in Abuja.
Sources within the commission told Daily Independent in confidence that the management of CAC that felt humiliated at the parliamentary hearing immediately ordered the transfer of everyone involved in the preparation of the documents.
However, whether their removal would provide answers to the pending questions on September 17 when it is scheduled to reappear before the committee remains to be seen.