The Federal Government has appointed eight accounting firms to evaluate the rate of compliance by state governments with the implementation of the Fiscal Sustainability Plan, which they signed to in June last year.
A total of 35 states endorsed the plan with Lagos the only state backing out of the agreement.
The appointment of the firms was confirmed by the Minister of Finance, Mrs. Kemi Adeosun, in a statement issued by the Director, Information, Ministry of Finance, Mr. Salisu Dambatta.
The eight accounting firms are PricewaterhouseCoopers, KPMG Professional Services, Ernst & Young, PKF Professional Services, Muhtari Dangana & Co., S.S. Afemikhe & Co., Ahmed Zakari & Co., and Ijewere & Co.
The FSP was a condition given by the Federal Government before it commenced the disbursement of the N510bn budget support facility to the states to enable them to pay workers’ salaries.
Before the conditional loan was released by the Federal Government, about 27 states were unable to pay the salaries of their workers.
While announcing the appointment of the firms, Adeosun said they were “expected to vigorously monitor, evaluate and verify the performance of the states against the agreed milestones set by each state government under the Fiscal Sustainability Plan.”
She warned that state governments that failed to implement the action plans contained in the FSP would be taken off the facility with immediate effect.
The statement said while monitoring by the finance ministry had been ongoing since June 2016, there was a need for independent monitoring and verification of the states against the agreed milestones by the eight accounting firms.
Adeosun had on June 14 last year while announcing the conditional loan facility to states said the funds had been secured from the private sector for the state governments through the issuance of bonds in the bond market.
She had during a meeting with commissioners for finance from the 36 states of the federation said that the loan would be given within a one-year period.
The minister had explained that based on the agreement with the state governors and the commissioners, N50bn would be released monthly in the first three months, where each of the 36 states would get about N1.3bn.
Thereafter, she noted that N40bn would be released monthly over nine months as the second tranche through the bond market, where each state would receive the sum of N1.1bn.
The subsequent release of the fund, according to her, is subject to the state governments’ compliance with the achievement of some milestones as contained in the FSP.
There are a total of 22 conditions contained in the FSP. Some of them are that a restriction will be placed on the states borrowing from commercial banks; all states must publish their financial statements, budgets and quarterly budget performance; and states’ finances will no longer be shrouded in secrecy and items like security vote, feeding and travel allowances, among others, will be made visible.
Others are that the states will review obsolete revenue laws and tariffs; and redefine Internally Generated Revenue to include non-tax revenue sources that will reflect local opportunities in each state, especially in solid minerals.
The states were also directed to set target limits for recurrent to capital expenditures; set target for personnel costs as a percentage of the total budget; clean up their payroll by eliminating ghost workers; as well as set up efficiency units to reduce the cost of governance.
Punch
