The Labour and Employment Minister Chris Ngige on Tuesday accused the suspended management of the Nigeria Social Insurance Trust Fund (NSITF) of awarding about 332 contracts worth about N4.448 billion in one day.
He said this happened two days after he left office as minister, following the dissolution of the Cabinet after the 2019 general election.
The minister, who made a two-hour presentation before the House of Representatives ad hoc committee investigating the arbitrary breach of presidential breeches, said the suspended management committed about 74 infractions, which informed its suspension.
He told the committee that the circular from the Office of the Secretary to the Government of the Federation (SGF), which he was accused of breaching, was about serious misconduct and that some of the suspended officials will face disciplinary action.
Ngige assured that the management committee would be given a fair hearing. “Suspension is not dismissal,” he said.
The minister listed some of the infractions the suspended management committed, including extra-budgetary spending, making payment for unapproved expenditure, overspending on administrative issues, irregular direct payment from the Employees Compensation Act, irregularities in workers’ group assurance policy and making payment for assurance policy without a policy cover.
Ngige also said there was non-payment of taxes to states, leading to the closure of the fund offices in Port Harcourt (Rivers) and Owerri (Imo), having different figures on the Pay As You Earn (PAYE) voucher and PAYE mandate, engaging solicitors without the approval of the Attorney General of the Federation (AGF) and making payment of N33 million to the solicitors, also without the approval of the AGF.
Also, the minister said the management paid about N180 million to solicitors they hired without the approval of the AGF to handle a vase of a former employee who was supposed to be paid about N60 million.
According to him, some payments were made by the fund without the signature of the Managing Director.
Ngige said the management circumvented the Ministerial Tenders Board in the award of contracts.
The minister also alleged that the suspended management approved for themselves and their families about N9.8 million as leave grant and overseas holiday for 30 days, flying first-class, even when such trips were not known to him and were not approved.
He also accused them of irregular payment of salaries to themselves outside their condition of service.
“They jettisoned the NSITF condition of service. They claimed to have seen a document, which is the condition of service of NSITF, and fixed salaries and allowances for themselves.
“They earned humongous salaries and allowances and took housing loans for themselves without coming to the minister,” Ngige said.
The minister accused the suspended management of failing to submit audited reports to the Office of the AGF, breach of Personal Income Tax Act/under-deduction of PAYE Tax – N1,446,887,167.70; non-deduction/non-remittance of VAT and Withholding Tax (WHT) – N1,435,711; irregular payment of unapproved salaries and allowances to MD and Executive Directors, outside their conditions of service, in their letters of appointment as political officeholders.
He also accused them of transferring funds from Capital Expenditure (CAPEX) without evidence of utilization; engagement of external solicitors without obtaining clearance from AuGF; payment of legal fees without clearance from AGF; irregular payment of first 28 days’ allowance to MD/CE and three Executive Directors – political office holders not recognized in extant circular nor in the NSITF condition of service.
Ngige accused the management of sponsoring executive directors and their spouses to overseas countries for annual leave – about N9.8 million each; foreign international Travels without approvals, Overpayment to contractors due to addition of WHT, an irregular award of contract for the supply of 22 of motor vehicles to NSITF – N146,027,227; procurement – conversion of contract from the supply of toners to the supply of Toyota Prado Jeep without approval – N48,300,000.
The minister said the agency of engaged in the procurement of motor vehicle not taken on ledger charge, worth N290,414,289; contract-splitting, contract payment without evidence of the performance of N151,389,021.50; consultancy services for processing and regularisation of the title deeds and survey plans at Era Village, Oto-Awori, Ijinikin-Badagry Express Way – N120,000,000; contract execution without a signed contract by both parties.
He said: “The interesting thing is that the Auditor General’s special periodic check report has been treated with levity, especially in areas where the MD and the three executive directors had queries for bypassing issues of payments not authorized to themselves by extant circulars and their conditions of services.
“There was evidence that these infractions were brought to the parties concerned via queries and their responses to the allegations made against them and given right of reply.”
“In 2018, I set up an Implementation Committee from the ministry to implement both the Auditor General’s special periodic check and the report of the administrative panel of inquiry, headed by the then Permanent Secretary, Mrs. Ibukun Odusote. By the time she was redeployed from the Ministry of Labour and Employment in November 2018 to the Ministry of Environment, my instructions on the implementation for the two reports on NSITF, to the best of my knowledge, did not receive attention from the NSITF management.”
“All attempts and directives to NSITF, even at the ministry’s top management with parastatals to get the NSITF’s response, were futile, till we went for the general election and I exited as minister on May 29, 2019. Of course, they celebrated the exit. But all these were captured in my handover notes to the prospective ‘new Minister of Labour and Employment’.
“To make matters worse, when I came back in August 2019, reappointed as Minister of Labour and Employment, right from the 2020 Budget defense and their 2019 budget performance, I realized that instead of making amends from the earlier Auditor General’s report, matters have worsened. I, therefore, sought the help of the AGF and the DG of Public Procurement as there was a bazaar of NSITF contract documents being hawked at Wuse and Maitama, Abuja, for ‘prospective contractors’ on payment of 25 percent of contract paper value.
“Even though the MD and ED Finance and Investment dodged and did not present a well-articulated Budget 2020, the 2019 performance, the latter raised red flags for all – starting with the two committees of the National Assembly on Labour, Employment and Productivity and the auditors in the ministry.
“Meanwhile, the Special Periodic Check of 2018/2019 undertaken by the auditors from AuFG later raised even worse infraction than the earlier ones in 2012 – 2017.
“Immediately these red flags were raised instructed them to halt all procurements for 2019 and payments of 2018/2019 that had not been done, pending the report of these checks. I brought this situation immediately to the attention of Mr. President because the MD and EDs claim they are “well-connected politicians” and as such nothing will touch them hence, they ignored my directives during the Covid-19 and they went on to start payments for all forms of phony contracts – some executed and some unexecuted.”
“The 2018/2019 Special Periodic Check/requested from the AGF had thrown up more of these queries which they could not answer. A quick check revealed extra Budgetary expenditure as against the approved estimate of N1,019,360,520.90; payment of unapproved allowances – N118,779,632.40; payment for vouchers not presented for audit inspection (capital vouchers N300,898,994.30), payment vouchers not posted to the cashbook – N884,701,789.72
Overspending on Administrative expenses contrary to the provisions of the ECS Act only five to 25 percent contributions allowed by Act, Irregular Direct Payments from ECS Accounts – N1,476,690,076.78 responded but not satisfactory to auditors,” among others.
He said ECS contributions inflows – N2,451,474,084.91 and outflows of N178,468,751.11 found in the bank statements were not accounted for in the cash book, while ECS contributions inflows captured on the cashbook but not found in bank statement amounted to N448,053,243.54.
Giving detail of contract splitting, he said the management split contract worth N4,889,320,06 to avoid Ministerial Tenders Board and FEC Scrutiny, violated E-Payment, payments without relevant support documents to the tune of N966,622,231.3.
Ngige said the suspension of the management had a presidential approval via a letter, dated May 19, 2020.
He said: “Even after the presidential assent for disciplinary action against the MD and these officers for these financial breaches, the Chief of Staff to the President (CoSP) still communicated the SGF because of the new circular, and the SGF still subjected the Honourable Minister of Labour and Employment to submit the prima facie infractions and serious misconduct in view of circular above.
“The minister complied and submitted the copy of the report and alleged gross misconduct, again, by a letter, dated June 23, 2020.
“By the letter, dated June 30, 2020, the SGF conveyed Mr. President’s approval of all the recommendations submitted by my office in respect of issues bordering on the Financial and Procurement infractions and acts of serious of misconduct and referred to the guidance on implementation to a letter from the CoSP and further requested the minister to avail his office with records of the implementation of Mr. President’s approval, especially in the areas of personnel charges.”