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AUDIT REPORT INDICTS NPA MANAGEMENT OF MONUMENTAL CONTRACTS FRAUD

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President Muhammadu Buhari

As expected, an audit report carried out by the Office of the Auditor General of the Federation has indicted the Management of the Nigerian Ports Authority (NPA) led by Ms Hadiza Bala Usman as the Managing Director of monumental frauds ranging from abuse of the procurement act, contract inflation and Corporate Social Responsibility (CSR)abuses.

According to Shipping World Magazine ” the monumental fraud has been uncovered at the Nigerian Ports Authority, an exclusive investigation by Shipping World Magazine has revealed”.
The fraud which runs into billions of Naira was uncovered by an audit query of activities of the agency between 2016 and 2018.

Rotimi Amaechi, Minister of Transportation addressing Newsmen

A report by the office of the Auditor General of the Federation obtained exclusively by the Shipping World
Magazine came on hard on Hadiza Bala Usman, the NPA’s Managing Director on gross “betrayal of public trust” as demonstrated by her flagrant abuse for due process in the way and manner she runs the agency.

Highlights of the damning report from the office of the Audit General of the Federation include her refusal to remit VAT deductions running into billions of naira and in foreign currency denomination to the Federal Inland Revenue Service. For instance, the query highlighted unremitteed deduction to FIRS to include #3,667,750,470. $148,845,745.04, Euro 4,891,449.50 and £252,682.14.
The NPA under Hadiza Bala Usman was also accused of” excessive increase in administrative operational expenses” extra budgetary expenditures on hotel accommodation and under disclosure of expenditures on hotel expenses”, Corporate social Responsibility Projects, diversion of funds through the Nigerian Port Today, sponsorship of National Assembly Programmes, amongst other. The queries which covered over 100 issues, also asked Hadiza Bala Usman to make various refunds to government, especially in instances where such expenditures could not be justified.

Hadiza Bala Usman, MD NPA

According to our findings, “the Audit team reviewed the Authority’s policy on implementation of Corporate Social Responsibility Projects/ Programmes and discovered that records relating to CSR fell short of the level of compliance with the Public procurement Act 2007. In 2016, the NPA spent #286,412,628.00 on CSR while in 2017, the figure rose to #2,496,248,775.00 and #5billion in 2018. The Audit team found out that “beneficiary needs were not properly assessed or identified before the implementation of CSR projects/ programmes.

The Audit team observed to its chagrin that there was no evidence of compliance with public procurement Act and that most of the CSR projects/ programmes were inflated and accordingly ordered that the “sum of #5.18 billion should be recovered from the Managing Director of NPA, being the value of,, inflated amount under her watch. The committee also observed that delivery of CSR items were not accompanied with delivery letters and that in most cases, there was no evidence of actual items delivered and who signed for them.

For instance while a contract with Ref.HQ/GM/PROC/CON/C.11/PBT/16/322 dated 16/10/17 was awarded in favour of Messrs Ecomaxx Engineering Projects Ltd for the supply of items to the old people’s Home Yaba, Lagos to the tune of #19,760,460.00 which was paid vide invoice no HQ/CS/0711 dated 01/06/17 there was no documentary evidence that the items were indeed delivered to the Home. In the same vein, the contract for supply of items to Yaba children’s orphanage followed the same pattern. For instance, whilst a contract awarded in favour of Trans-secure Ltd was #19,467,000.00 the survey conducted by the audit team found out that #6,520,500.00 was the actual market price.

The office of the AGuF seeks an explanation from Hadiza Bala Usman thec reasons for the sharp excessive increase in the NPA’s expenditure profile between 2016 and 2018. “it was observed that total expenditure by the Authority increased astronomically by 128% from #87.47 billion in 2016 to #198.98 billion in 2017. Of particular concern was the administrative expenses which increased by 72% from #26.126 billion in 2016 to #44.93 billion in 2017.

Shipping World Magazine perusal of the Audit query revealed for instance that whereas in 2016 #22.16 billion was expended on revenue monitoring, the amount rose to a whopping #1.06 billion in 2017, an increase of over 4,689%. Similarly, overseas training rose from #20.48 million in 2016 to #470 million, an increase of over 2194%. Also, whereas #15.31 million was spent on vessels / craft in 2016, the amount rose to #117.4 million in 2017, an increase of 666%. The excessive expenditure of pollution control also attracted the scrutiny of the auditors who insisted that Hadiza Bala Usman must tell Nigerians why and how #4.2 billion was spent in 2017 as against #29 million in 2016, an increase of 14,310 %. Other over bloated increase in expenditure include local and foreign medical expenses, legal fees, Corporate souvenirs and expenditure on other government agencies which rose from #50.29 million in 2016 to #338.59 million in 2017, a 573 per cent rise.

The Audit also raised its yellow flag on an alleged “diversion of #369.71 million through the Nigerian Ports Today” the official in-house magazine of the NPA. “Payments to Nigerian Ports Today were reviewed to confirm whether they were properly initiated, authorised processed, documented and paid in line with the Public procurement Act 2007,”the report said. However “findings revealed the sum of #369,718,130.82 was paid to Nigerian Ports Today, a Limited liability company that is fully owned and controlled by NPA during the period under review.

Therewas no evidence of contractual relationship in the form of award of contract to the company nor was there anything to show the company rendered services to the Authority to justify these payments and concludes that the Authority paid the company without a contract and thereby contravening the Public procurement Act 2007, and that this was viewed as a means to divert public funds,” the report alleged.

The Audit query also took serious exceptions to various expenditure incurred by the NPA on behalf of the Minister of Transportation, Rotimi Amaechi for which a whopping $604,598.95 was paid without supporting documents .Hadiza Bala Usman was asked to refund the said sum into government treasury.

Usually dependable source at the office of the Audit General of the Federation told Shipping World that the Audit queries cuts across all units and departments of the agency and that massive over invoicing and flagrant disregard for due process were uncovered.

It could be recalled that Ms Hadiza Usman was one of the leading campaigners for President Mohammedu Buhari’s second term election during the April 29th presidential election. She was appionted into the Buhari presidential campaign council. She was a member of the finance committee.

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