How FG Audit Report Uncovered N5.1bn Fraud At University of Ibadan
The Office of the Accountant General of the Federation (OAGF) has uncovered what appears a systematic fraud in the financial management of University of Ibadan, amounting to N5.1 billion.
The sum, a cumulative excess in personnel allocations to the university for the period of 2010 -2015, was found to have been spent by the university council without due approval.
The university was also found to have received another N945 million in excess of its budgetary allocation during account reconciliation with the OAGF for the period among several shoddy practices.
An audit report conducted by the Federal Government on the university revealed that the institution received total budgetary personnel cost allocation of N60.53 billion and spent N55. 10 billion on personnel emolument during the period covered by the audit, while the N945 million was over budgetary withdrawal applied for by the university authorities and which was discovered during reconciliation of the UI account records with OAGF.
The OAGF had in November 2016 engaged the services of OS Professional Services to perform a process audit on the university. The audit covered the tenure of former Vice-Chancellor, Professor Isaac Folorunso Adewole, the current Minister of Health, and his successor, Professor Abel Idowu Olayinka.
A don in the varsity, who pleaded anonymity, confirmed the audit report which he said is already causing ripples in the ivory tower and wondered why the Federal Government was yet to act on the report of the audit, almost 15 months after the audit report was completed.
Also, our source in the OAGF confirmed that the audit report had since been submitted but declined further comments.
The report sighted by this reporter confirmed that the balances of over N2 billion from twenty-two bank accounts of deposit money banks (DMBs) were not credited by CBN and there was no valid evidence showing that authorities of the university protested the anomaly to the representative DMBs and CBN.
“The total over funding of N5.1 billion was recorded for the period highlighted. The first four years witnessed an over funding of N1. 50 billion, N1. 40 billion, N1. 90 billion and N1.16 billion, respectively, whilst year 2014 and 2015 have underfunding of N396 million and N0.404 million, respectively.
“The budgetary allocation to the university increased over the years from N9.33 billion, N10.61 billion, N10.71 billion for 2011, 2012 and 2013 but there was slight decrease to N9.66 billion in 2014 and finally increasing to N10.92 billion in 2015,” the report stated.
The audit report carried out by OS Professional Services for the OAGF revealed that the absolute percentage growth between 2010 and 2015 is fifteen percent as personnel cost increase from N7. 82 billion to N7.94 billion, N8.70 billion, N9.55 billion, N10.05 billion and N10.93 billion for 2010, 2011, 2012, 2013, 2014 and 2015, respectively.
It attributed the increase in personnel emolument to increase in salaries, the number of employees and promotions between 2010 and 2015, adding that the additional number of employed were 42, 48, 311, 617, 459, 320 for 2010, 2011, 2012, 2013, 2014 and 2015, respectively.
The report, however, noted that the proportion of academic and non-academic staff is skewed in favour of non-academic staff over the same period.
In addition, the audit also uncovered weak internal control over cash recording and prevalence of unbanked receipts.
“There are inadequacies in the control of cash. There are many instances in which the updating of the cash book is several months in arrears. Consequently, the bank reconciliation statement is not up to date. Many of the bank accounts are yet to be reconciled before the transfer to Treasury Single Account (TSA) in 2015. The accuracy and the correctness of the balances transferred cannot be validated.”
Similarly, the audit uncovered anomalous practices, including contract splitting by the council, in contravention of Public Procurement Act 2007 as well as bid rigging and tenders evaluation manipulation.
“The University’s Public Procurement Committee and Tender Board engaged in contract splitting for a number of contracts. This is in contravention of section 58(4) which criminalised the splitting of contract for goods and services in order to stay within the approval threshold of less than N250 million. A review of the tender processes indicated that the same set of contractors are always winning the bids and engaged to execute varying projects that are technically unrelated to their area of expertise. The fairness, openness and transparency of the tender evaluation process are put to the question”, the report noted.
The report also revealed that cash receipts were not always banked by the cashier and promptly the next day in line with the existing banking procedures laid down in the university’s approved accounting manual.
“For instance, the sum of N760,000 for June 11, 2013, was banked on June 12, 2013. We also observed that there was an instance of unbanked receipts (N24 million) being carried forward from July 2009 to June 2011 on miscellaneous account of Wema Bank (Bodija-Ibadan).”
The audit also revealed that the university is in contravention of Federal Government 2015 directive that all government parastatals and agencies must migrate revenue and cash collections from manual to e-collection on the TSA platform, as UI continued to engage in physical cash collection.
The audit report noted that bank accounts with First Bank of Nigeria Plc, Skye Bank Plc and others belonging to the institution were operated up to March 2016 by UI management in flagrant disobedience to government directives on the Treasury Single Account, that all bank funds of MDAs should be mopped up and accounts closed with money transferred to TSA account with CBN.
It also discovered an unreadiness of the university to comply with the International Public Sector Accounting Standards (IPSAS), among several shoddy practices that raise suspension.
“In the cause of our review of audited financial statements (AFS) and domestic letters for June 2009- 2012 financial years, we observed that the sums of N36 million and N1 million petty cash were written off in 2009 and 2010, respectively, without documented valid approvals for the write-offs. The sum of N1.25 billion was written off from bank balances after bank confirmation letter was received in respect of bank balance for 2010/2011 financial audit; there was a major cash difference of N300 million between the CBN capital account book which was written without thorough investigation”, the report states.
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