JUST IN: Corporate Affairs Commission, CAC To Be Shunt Down
Why Corporate Affairs Commission, CAC To be Shunt Down
Information reaching IBOM FOCUS that Corporate Affairs Commission, CAC To be Shunt Down
The House of Representatives committee on Finance has threatened to shut down the Corporate Affairs Commission for having a higher expenditure than generated revenue between 2016 and 2021.
The committee also recommended that the budget office suspend the budgetary approval for the commission until the commission presents reports of all expenditures.
In the ongoing interactive session on the 2022-2024 Medium-Term Expenditure Framework (MTEF) organised by the committee, the chairman of the panel, James Faleke questioned the registrar of the CAC, Garba Abubakar over the operational expenditure of the commission.
Faleke alleged that the CAC is making unnecessary spending, denying the government revenue.
“When you pay yourself revenue and allowances that take away our revenue, that you ought to have remitted to the government, it is not acceptable,” he said.
“Because if you increase your salary every year, let us know that you increased it every year — 2021 performance. If you go back to your revenue and expenditure, comparing the two, from 2016, I want to take you back — your revenue was N8.74 billion, you spent N11.275 billion, that is about N3 billion gap.
“Again, in 2017, your revenue was N10.896 billion and you spent 12.6 billion; in 2018, N11.2 billion, you spent N12.2 billion; in 2019, N12.7 billion you spent N13.790 billion; in 2020, surprisingly, revenue increased to N19.163 billion, your expenditure was 13.2 billion and 2021, your estimated revenue for the year is N20.74 billion, and your estimated budget, expenditure was N19.28 billion.
CAC To Be Shunt Down
“In the first quarter of 2021, you have generated N3.19 billion and spent N5.136 billion. What is the meaning of this? First-quarter, that is the report you sent to us now.
“What is happening is that this increase in expenditure will reduce your surplus, that is just the simple arithmetic, your finance people are putting figures together so that the money you will remit to the federation account that will help Nigeria will not be there.”
In his response, Abubakar explained that most of the expenditures were settlements of outstanding liabilities.
“We got the assessment for the 2018 and 2019 pension towards the end of last year —and we were given an assessment of N809 million,” he said.
Another member of the committee from Katsina state, Sada Soli said the CAC is spending what it does not generate.
CAC To Be Shunt Down
“Accountant, this is a yes or no question. Can you spend what you don’t have? He asked.
“Look at this chat, 2016, your revenue is lower than expenditure, 2017, your revenue is lower than your expenditure, 2018 your revenue is lower than your expenditure and 2019, your revenue is lower than your expenditure. I don’t know how you can explain this, you have expended what you did not generate,” he said.
But responding, Ibrahim Gano, an accountant with CAC, admitted the revenue shortfall but added the commission has nothing to hide.
“It seems quite strange that we have spent more than what we are generating, that is really not the case, it is because of the accounting system that we are operating,” he said.
CAC To Be Shunt Down
“Liabilities that are due for a given year were recognised and they were duly impacted on our account. Liability was recognised in our balance sheet. So, there was no cash outlay for such transactions, liabilities were recognised in a given year, for example, in 2019, it impacted on the Profit and Loss (P and L), but the payments were actually not done, and as such, liabilities were recognised as liabilities to be paid in the succeeding year.
“For 2021, the possible explanation is apparently because there were payments that were done upfront, for example, housing of staff, staff housing allowances, payment were actually done, but we amortised them over a period of 12 years, so it will impact on your P and L, there is an outlay that a certain amount has been spent. But you take monthly amortisation that is being made, amortisation means expenses.
CAC To Be Shunt Down
At this point, Soli accused the commission of “cooking up” its account.
“Do you know what is cooking in accounting? Are you sure that you are not cooking your books because when you cook your books, it is always hard for a layman to understand? That is what we are facing now. If you say that you have generated this, but you have expended this,” he said.
The committee ruled that CAC provide details of all its expenditures.
“What you are doing is to borrow money in advance, you are paying upfront even when the money is not there. The committee has resolved that you will have to provide us with the details of the expenditure, from 2018 line by line items,” the chairman of the committee said.
CAC To Be Shunt Down
“We want to see, bring the file of expenditures, 2019, bring the file, in line with your budget. And you will have to submit to us by Thursday this week unfailingly.
“Budget office, you are going to be inviting corporate affairs to your office, you do not have an agreement with them until we finish with them.
“We are making this clear to you, there should be no budgetary approval for them until we finish with them. If we have to close down corporate affairs to make money for Nigeria, let us do it.”
CAC To Be Shunt Down
Add Comment