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Kemi Adeosun to NAFDAC: Return N2.8bn Operating Surplus to FG

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Minister of Finance, Kemi Adeosun

The National Agency for Food, Drug Administration and Control (NAFDAC) has been asked to refund N2,854,095,289.02 to the Consolidated Revenue Fund being Operating Surpluses for previous years.

According to The Nation, the Minister of Finance, Kemi Adeosun who made this known in a letter to the agency, also directed it Director-General Yetunde Oni, and officials of the Ministry of Health to attend an urgent meeting on Friday (today).

 

The minister queried why NAFDAC has proposed in its 2017 Budget to expend 100% of its Internally Generated Revenue (IGR).

The letter titled “Review of 2017 revenue and expenditure estimates and the repayment of outstanding operating surplus,” read:

The President Muhammadu Buhari led administration is committed to fiscal discipline, financial accountability and maximisation of revenue generation from its various agencies.

In line with Sections 21 and 22 of the Fiscal Responsibility Act, 2007 (as amended), the Minister of Finance is required to receive and review the Annual Estimates of Revenue and Expenditure (Draft Budgets) of Public Agencies and Corporations prior to their transmission to the National Assembly for approval.

The draft budget for 2017, submitted by the National Agency for Food and Drug Administration and Control (NAFDAC) has been reviewed and the following observations arise:

The projected cost to income ratio of NAFDAC is 100% which even exceeds the 75% target allowed for agencies which are not funded by Federal Government.

It is therefore a matter of grave concern that NAFDAC, which is fully funded from the budget (by payment of salary/overhead) proposes to expend 100% of its Internally Generated Revenue (IGR). This contravenes the Finance circular FMF/HMF/2016/1/2 of November 22nd, 2016.

I am therefore requesting NAFDAC to attend an urgent meeting in my office on Friday 17th March at 11:00am together with officials of the supervising Ministry (Ministry of Health) to resolve this issue.

It was further observed that NAFDAC augmented its employee costs by N688,421, 881.00 by using IGR in addition to appropriated sum of N4,443,243,393.00 in 2017 draft budget. Kindly provide necessary explanation and authorisation for this increase outside appropriation.

NAFDAC is indebted to the Consolidated Revenue Fund in the sum of N2,854,095,289.02 with regard to prior years’ Operating Surpluses that have not been remitted. It is expected that full payment be received within 2017 or a repayment agreement be reached with the Office of the Accountant General of the Federation.

In the Interim, NAFDAC is advised to drastically revise its draft budget downwards in line with the fiscal discipline expected under the current administration.

4 Comments

  1. Mannie

    March 17, 2017 at 12:26 pm

    Wouldn’t it be more prudent for the Ministry of Health and NAFDAC to devise some means to reallocate that money. It’d cost extra to send that money back to FG and have it reallocated- just extra work for bureaucrats to do.

  2. B

    March 17, 2017 at 4:59 pm

    Unfortunately Mannie, countries or companies are not run that way. At the beginning of every financial year, funds are allocated to each department for specific projects. Should there be a case where there is surplus, the funds are returned to the potty rather that reallocation mid year to new projects. This makes it easier to audit each department without complication of who approved or spent such funds. A simple example is when you send your driver on an errand and he comes back with less change than you expect with an explanation that he had to spend part of your money on an emergency. I’m sure your first reaction would be to instruct him to seek your permission next time before doing such. Same goes with public funds for federal agencies. Return the money to the potty and seek permission for a new project if its an emergency or add the new project to your next years budget.

  3. Tatafo

    March 17, 2017 at 5:04 pm

    Surplus? Meanwhile people are dying from fake drugs. Fake rice is being distributed etc. NAFDAC must not be doing their jobs.

  4. Mohammed ANWAR HOSSAIN

    March 17, 2017 at 10:26 pm

    Congratulations for doing good job specially road show to attract foreign investor in order to overcome the ressasion in Nigeria

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