Jonathan Owed Contractors N4tr, Says Joda Committee | Independent Newspapers Limited
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Jonathan Owed Contractors N4tr, Says Joda Committee

Posted: Jun 30, 2015 at 9:00 am   /   by   /   comments (0)

By Tunde Opeseitan  – Lagos


Former President Goodluck Jonathan admitted owing contractors to the tune of about N4 trillion as at April 2015, less than a month to the end of his administration, the transition committee set up by President Muhammadu Buhari has revealed.

The committee, headed by Ahmed Joda, in its 800-page report, sourced by an online newspaper, Premium Times on Monday, revealed that the Jonathan government admitted the indebtedness of his administration to contractors in the hand-over note submitted to Buhari.

Of the N4 trillion aggregate contractor liabilities, the Ministry of Education owed the most at N1.2 trillion, followed by the Finance Ministry’s N467.7 billion.

The report specifically urged Buhari to immediately terminate all dubious last-minute appointments made by Jonathan, while also reviewing all contracts awarded by the administration in the last 18 months.

The committee said this is to help the new government sidestep ineptitude and waste, and scale up its revenue base, adding that the recommendation must be urgently addressed within three months if the government must save cost and “enhance liquidity.”

The report specifically detailed a list of prompt, medium and long term decisions Buhari must take, or authorise, within 30, 45, 60 and 90 days of taking office, to create immediate impact, reduce government liability, increase revenue and stabilise the polity.

For instance, to deal with crippling fuel crisis, and backlog of unpaid salaries by states and the federal government, the committee advised Buhari to “borrow immediately or use CBN (Central Bank) advances” for salaries and fuel subsidies to “avoid chaos”.

It urged the administration to “review all contracts signed in the last 18 months by FGN.

“Non-strategic contracts that have not commenced or where no payments have been made can be cancelled,” the committee said, while also urging Buhari to negotiate exits for projects where mobilisation payments have been made but work not commenced.

That move, it believes, will “save expenditure on non-strategic projects, and can free up cash flows for other vital initiatives”, the committee said.

The decision on contract is to be taken within 90 days from May 29, and should be handled by the Federal Executive Council (FEC) and the Bureau of Public Procurement (BPP).

The committee added that the president should review all appointments made by Jonathan in the last nine months, and “for strategic agencies requiring professional leadership, the government should terminate all appointments not based on merit”.

The Joda panel said such move will save costs associated with poor decision making by an incompetent management team, and must be delivered within 45 days of the new government.

It would be recalled that after he was defeated at the March 28, 2015 Presidential election, Jonathan sacked several political appointees as well as boards of Federal Government agencies and parastatals, and equally appointed immediate replacement, a development that was condemned by many.

As further measures to check waste and increase efficiency and accountability, the Joda committee urged the Buhari government to quickly implement a single bank account, to be called Treasury Single Account, and to commence full implementation of the Fiscal Responsibility Act within 60 days, and chase up any outstanding funds from all government offices.

This will curtail the “excesses carried forward from previous administration”, it noted.

The committee also advised the government to fully implement the Integrated Personnel and Payroll Information System, IPPIS, and Integrated Government Integrated Financial Management Information System across all MDAs within 60 days.

The two facilities were used by the past government to check thousands of “ghost workers” who drew billions of naira in salaries that ended in the pocket of fraudulent officials.

Despite its claim of saving more than N100 billion from “ghost workers”, the Jonathan administration failed to punish those behind the scam.

Claims by former Finance Minister, Ngozi Okonjo-Iweala, that the case had been transferred to the Independent Corrupt Practices and other Related Offences Commission (ICPC) alongside names of indicted officials, were repeatedly refuted by the anti-graft body.

The committee warned Buhari that it would be irrational to rely on the purported huge balances the former government claimed it left behind.

First, it said, the numbers lacked key information to establish the authenticity of the contracts.

It made the following observation regarding the claims by the former government regarding outstanding liabilities:

– The aging of these liabilities was not provided.

– A detailed list of contracts was not provided and therefore, some balances maybe double counted (eg contracts funded through debt maybe captured in both MoF and the contracting Ministry).

– Some balances may be disputed. Therefore, liabilities may change once settlement/judgement is reached.

– No documentation was provided to confirm if the projects were executed to the agreed specifications.

– Some contracts maybe cancelled or terminated”.

As a first step, the Joda-committee advised Buhari to establish an Inter-Ministerial Task-Force to review all outstanding contracts (and associated liabilities) across all Ministries, Departments and Agencies within three months.

“The mandate of this Task-Force is to confirm the existence of the liability and authenticate the accuracy of information provided in the handover notes.

“The Government should only recognise the liabilities verified and confirmed by this Task-Force,” it said.