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No audit report on NIMASA

By Omoh Gabriel & Godwin Oritse
…half year report to ministry misinterpreted
Indication emerged weekend that allegation of contract splitting, over-invoicing, non-compliance with extant financial rules of Public Procurement and exceeding approval limits leveled against NIMASA management are mere speculations and unfounded aimed at causing confusion and disenchantment, a top official of the Federal Ministry of Transport has revealed.

The official who spoke to Vanguard said that contrary to the said financial audit report on the Nigerian Maritime Administration and Safety Agency (NIMASA) over contracts awarded for the purchase of generating set, the said contract has been cancelled for non-performance and that no payment has been made. Vanguard investigation revealed that the agency has decided to do a direct procurement of the said generator which is one of the grouse against the management of the agency.

Sources close to the Ministry of Transport told Vanguard that the report that was leaked to the media was the half yearly report made by the agency to the Ministry of Transport which usually do not contain details of procedures and necessary documentation that would have given a clear picture of the financial position of the agency. He said perhaps if those lashing on the report had taken the pain to seek clarifications, they would have discovered that there were no issues arising from the report especially as no explanation was sought from the agency’s management.

He said: “There was no contract splitting,” adding that “every contract awarded and executed followed due process”.
The source who is displeased with the present happenings at the maritime apex body also said that the  firm that carried out the audit exercise on the agency did not visit NIMASA, neither did it call on any of the agency’s officials for explanation.

On the over-bloated cost of the generating set, the source stated that the issue was not as  the audit firm wanted the government and the public to believe. It was gathered that the market price of the generator was N99million, with 25% profit mark up, 5% Value Added Tax, 5% financing cost, and 5% withholding tax, bringing the cost of the said generator to the price it was billed for purchase. He said the 40 per cent mark up is within government approved bench mark for non-cash purchases.

The firm, it was gathered, did a report based on the half-yearly report that NIMASA sends to the Ministry of Transport. The source explained that there are four contract approving authorities in NIMASA, namely: NIMASA’s management, the Parastatal Tenders Board (PTB), Ministerial Tenders Board (MTB) and the Federal Executive Council (FEC).

It was further gathered that while  the Director-General of NIMASA has an approval limit of  N2.5million for goods and services and N5 million for works, the PTB has a limit of between N50 million for services and N250 million for works.

For the Ministerial Tenders Board, N100 million for goods and services and N1 billion for works, while contracts above N1 billion are referred to the Federal Executive Council for approval.

It was learnt that on the whole, 451 contracts were awarded following the approval of NIMASA’s D-G, PTB, MTB and FEC many of which have not received letters of commitment from NIMASA for the contracts to take effect. This, he said, was because the appropriation of the agency was not passed until October 15th 2010.

The source also explained that before any major contract was awarded, it was first of all advertised, bids are received from contractors and due processes are followed before they are awarded. The contracts in question, Vanguard learnt, were duly advertised by the former Management led by Dr. Adegboyega Dosunmu. It was also learnt that there are some operational items that the Director-General can approve without the consent of the board.

For instance, the purchase of diesel can be done solely on the discretion of the Director-General to run the operations of NIMASA and are said to have been bought at almost 10 per cent below prevailing market price.

The source noted that what is happening in NIMASA is a political manipulation by some vested interest to blackmail the Federal Government to change the management of NIMASA adding that the high turnover in the agency is not healthy for the growth of the Nigerian maritime industry.

It will be recalled that the Economic and Financial Crimes Commission (EFCC) about two weeks ago invited the NIMASA Director-General, Mr Temisan Omatseye and two Directors in charge of Finance and Procurement. The trio have since been released. But while the D-G has resumed duty, the two Directors were however suspended by the Minister of Transport. Alhaji Yusuf Sueiman.

The source stated: “Talk of diesel, they said NIMASA was buying diesel at N149.3K per litre, the market price is N114 per litre plus the 40% mark-up, gives you N159.6k , but they buy  at N149.3k, N12 less than the market price. The agency was buying diesel at N5.4million for 33,000 litres, the purchase of diesel is an operational cost, without diesel the agency cannot function. If the Director-General of NIMASA has a NEPA bill of N100 million, that amount can be  approved by him because that is an operation cost.

“What these politicians do not know is that the D-G does have a limit on operational costs but the man makes it a policy to refer these requests to the appropriate authorities in compliance with  due process. What the audit firm failed to realise is that NIMASA is a very peculiar government agency, if they (Audit firm) have taken the trouble to do a thorough job, this whole crisis would have been averted.

“No contract was split, what happens is that in the NIMASA accounts department, these different bills are lumped together for accounting convenience thereby creating an impression that so much money is being spent on a particular item.

“It is the same thing when you buy safety vest, safety boots, safety helmet – these are all safety materials and as such, they are lumped together as safety without separating them,” he stated.


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