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

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.