Adeosun mandates NAFDAC to refund N2.9bn 2016 budget surplus

Finance minister, Mrs Kemi Adeosun, has asked the National Agency for Food and Drug Administration and Control (NAFDAC) to refund the N2,854,095,289.02 to the Consolidated Revenue Fund, being operating surpluses from the 2016 budget.

Adeosun has also summoned the agency’s acting director-general, Mrs Yetunde Oni, and her management team to a meeting at the finance ministry to explain NAFDAC’s failure to remit the operating surpluses.

The NAFDAC officials are to appear alongside their supervising officials at the federal ministry of health to resolve the issue.

The finance minister in her letter titled “Review of 2017 revenue and expenditure estimates and the repayment of outstanding operating surplus,” asked NAFDAC to explain why the agency plans to spend 100% of its Internally Generated Revenue (IGR) under the 2017 budget.

A portion of the letter said: “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.”

The letter added:

“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.”

According to The Nation, the minister said further: “In the Interim, NAFDAC is advised to drastically revise its draft budget downwards in line with the fiscal discipline expected under the current administration.”