The Minister of Finance, Mrs. Kemi Adeosun, wants sanctions to be imposed on the Ministries, Departments and Agencies of the government that fail to remit their operating surplus appropriately to the Consolidated Revenue Fund.
Speaking at the inauguration of a new template for the calculation of operating surplus in Abuja on Wednesday, Adeosun said it had become necessary to review the Fiscal Responsibility Act 2007 in order to accommodate sanctions and incentives.
The minister, who was represented by the Secretary, Presidential Initiative on Continuous Audit, Dikwa Kyari, regretted that no MDA had met the set financial target in the past two decades.
The minister also proposed linking the tenure of chief executive officers of agencies to financial performance, adding that this would help to shore up the meeting of the financial goals of the organisations.
She said, “We have to extend these discussions beyond the template to see why we are not meeting the targets. For the last two decades, none of the MDAs has ever met 50 per cent of their target.
“There is a need for the review of the Fiscal Responsibility Act to provide for sanctions and incentives so that at least there will be an improvement.
“There is a need to sanction defaulters; maybe by way of denying them promotion, or encouraging them by giving them some incentives. The FRC should take it up as one of the key issues so that at the end of the day, there is incentive for those who performed (well) and sanction for those who defaulted in meeting their targets.”
Adeosun frowned on the use of government funds to support charities and political parties and charged the Fiscal Responsibility Commission to begin to monitor the financial activities of the MDAs.
She added that the new template was articulated to address such abuses and others.
The minister said, “Most of these MDAs go outside the confines of their mandates to donate to political parties and charity organisations and give zero balance as surplus. So, we came up with this template.
“We cannot accommodate a situation whereby you are given a mandate as an MDA and you go outside your mandate to give out money while your mandate is to finance the budget.
“Over the years, government has been borrowing to finance the capital budget. We cannot continue like this. There is need for us to change the way in which we collect revenue to finance our budget.
“There must be a law in place to allow the Fiscal Responsibility Commission to go into the MDAs to look at their books, to find out how much they generated, how much they spent, and how much is due to government. If for any reason there is default, there must be sanction.”