Commissioners and local government chairmen in some states of the federation have denied receiving a communication from the Central Bank of Nigeria (CBN) to submit two years’ audit reports for the opening of accounts for the direct disbursement of funds from the Federation Account Allocation Committee (FAAC) to the councils. The CBN’s purported request is to facilitate the release of the funds to the councils in line with the Supreme Court judgement on the financial autonomy of LGAs in the country.

There were media reports that the councils could not receive their direct funds last month because they did not meet the CBN’s demand.

But the Ekiti State government said there was no communication from the CBN directing its 16 local government areas to submit audited reports to open accounts for the direct disbursement of their monthly federal allocation. In an interview with LEADERSHIP Sunday in Ado Ekiti, the Commissioner for Information, Hon. Taiwo Olatunbosun, said he was briefed by the appropriate authorities and heads of the concerned agencies of government in the state.

Olatubosun said the AC Finance he informed about it, called back to say that there had not been any correspondence or communication with the state to that effect from the CBN. “It may not be equally possible for Central Bank of Nigeria (CBN) to be writing to all the local government areas in the country without following due processes.

“There is always a line of communication as a federating unit. Nigeria being a federating unit, with line communication, and there has not been any correspondence or communication to the state regarding LGAs submitting their two years audited accounts to the CBN for the opening of accounts for direct disbursement federal allocation to the council areas.

“There is nothing like that in the state and we are yet to get any communication and correspondence like that to the state or the local governments,” he said.
The commissioner, however, said the truth of the matter is that the state government, under the leadership of Governor Biodun Oyebanji had been operating a transparent fiscal system.

He said, “Particularly, he is ensuring that local governments are allowed to spend their money and the state government has never touched a dime out of local governments’ money. And we are operating as a state and relating with the local governments the way it should be.”

But a source close to one of the councils’ Finance and Administrative Department, said they were still expecting the audited reports from the state’s Auditor-General to act on the CBN’s instruction.

The source who declared that the report is one of the required documents needed by the CBN to open the account, said, “Without that audited account reports submitted to the CBN, they will not be able to open the accounts for us and the allocation will not come directly into our coffers.

“Already, we have been directed to open an account in a commercial bank which we have done and we sent it to Abuja, but they insisted that we should bring audited reports and liaise with the CBN. The report should be done by the state Auditor-General and sent to CBN.

“If the report is sent to them, I am very sure, this month’s allocation would come directly to our account,” he said.

The Plateau State Commissioner for Local Government and Chieftaincy Affairs, Hon. Euphriam Usman, said he was not aware of any instruction from the CBN directing LGAs to submit audit reports for the disbursement of funds from the federation account.

Usman said, “I am not aware of anything like that. Nobody has informed me. I am just hearing it from you,” he said.

But, the chairman of Dambatta LGA in Kano State, Hon. Jamilu Abubakar, confirmed that he had been directed by the Ministry for Local Government and Chieftaincy Affairs to submit the total expenditures from January to December with a bank statement.

He explained that though he was not aware of the directive from the federal government, the ministry has directed the director of personnel and management of his LGA to provide some of the aforementioned documents to be forwarded to the appropriate authorities.

In his reaction, the director of a Lagos-based civil society organization (CSO), Justice and Human Rights Reforms Initiatives (JHRRI), David Babajide, said although he agreed that the judgment of the Supreme Court on LG autonomy must be obeyed, the issue of transparency and accountability should not be ignored.

Babajide said auditing the accounts of institutions in charge of public funds is an obligation under the law, so it should not be strange or difficult for the local government to present it.

He also stated that the directive of the CBN is lawful, as they are so empowered by their Act to demand audited financial reports because they are in charge of monetary policies.

Babajide argued that the directive should not be seen or interpreted as a ploy to disobey the Supreme Court judgment but a simple step to ensure transparency and accountability of public funds.

A Lagos-based lawyer, Emeka Okezie, blamed President Bola Tinubu’s administration for the confusion that has made the implementation of the Supreme Court’s judgment almost impossible over six months after it was delivered.

He said various government officials have been giving divergent views on the matter, and the date for implementation is being shifted every month.

Okezie said, “The CBN cannot stop the enforcement of the judgment, but the local government must also meet all lawful requirements to open an account with the bank. I don’t believe the apex court expects that funds should be released without accountability.

In his own reaction, a senior lawyer, Ugwuzor Adindu, insisted that the CBN has no power to withhold local government allocations under any excuse.

He said, “The CBN has no power to withhold local government allocation once it is shared by FAAC. To act otherwise will be contrary to the Supreme Court judgment in AG Lagos State vs AG Federation, reported in part 904 of NWLR.

“As a matter of fact, this also runs contrary to section 162 of the constitution of the Federal Republic of Nigeria, 1999, as amended,” he said.

LEADERSHIP