According to a recent forensic audit report, a staggering sum of N1.9 trillion (N1, 959, 011,334,397) was discovered to have been unlawfully withdrawn from the coffers of the Abia State Government during the tenure of the former governor, Okezie Ikpeazu.
The report, compiled by KPMG International Nigeria Limited, was unveiled last month, shedding light on the financial mismanagement within the state.
Commissioned by the current Governor, Alex Otti, the audit scrutinized the financial records of the state government from May 29, 2015, to May 28, 2023, encompassing the period of Ikpeazu’s governance under the banner of the Peoples Democratic Party.
Mr Otti was elected Abia governor on 22 March 2023 under the Labour Party ticket. He took office on 29 May of the same year.
PREMIUM TIMES recently acquired the exhaustive 359-page forensic audit report titled “Final Report: Provision of Process Review Services to Abia State Government,” just days after its publication.
This report meticulously outlines funds purportedly allocated for projects or withdrawn from the state government’s accounts without proper authorization during the reviewed period.
According to the report, within this timeframe, the Abia state government held a staggering 78 bank accounts across 14 commercial banks in Nigeria, totaling a “net credit balance of N3,495, 207, 127.14 as of May 28, 2023,” out of the 35 licensed banks in the country.
Among the irregularities highlighted in the report were instances of funds being utilized or withdrawn without following proper procedures. These included contract funds designated for non-existent projects, loans disbursed without specified purposes, legally approved but unutilized credit facilities, unremitted Internally-Generated Revenue (IGR) owed to the state, and unauthorized deductions from the IGR.
Additionally, there were payments made prior to official approval, funds allocated to awarded contracts without evidence of competitive bidding, and allocations or withdrawals lacking supporting documents and payment vouchers, along with payment instructions.
The investigation revealed discrepancies such as funds assigned to projects allegedly without adherence to the contractor selection process and withdrawals from state government accounts, with payment mandates bearing the signature of a single signatory in at least 132 instances.
The report pointed out that these alleged illegal activities contravened various state laws and government directives, including the Abia State Public Procurement Law 2012 and the Abia State Financial Regulations (amended in 2001).
The reported sum of N1.9 trillion, purportedly misappropriated or allocated without due process, does not encompass the values of state government assets and properties, including lands, which, according to the report, were illicitly allocated to various individuals.
During the period under scrutiny, the Abia State Government awarded a total of 560 contracts to 231 contractors, with a combined contract value reaching N294.8 billion. However, details regarding the values of 40 of these contracts were insufficient.
The report also disclosed that a sum of N10 billion was disbursed to Ferotex on September 25, 2020, for the purported “Construction of Abia State Airport,” a project that never materialized.
Prior to the audit report’s release, Governor Otti and his predecessor, Mr. Ikpeazu, were embroiled in a verbal dispute concerning the governor’s accusation that his predecessor diverted the aforementioned N10 billion, originally designated for the airport construction in the state. Governor Otti claimed to have sourced this information from the forensic audit report.
In his initial response, Mr. Ikpeazu, conveyed through his former Commissioner for Information, John Kalu, refuted the accusation. He clarified that the N10 billion initially designated for the airport project underwent redirection into other initiatives subsequent to the approval of the State Executive Council at the time.
In a subsequent reaction, conveyed via a video clip transmitted to Premium Times, the former Abia governor echoed sentiments similar to his former commissioner. He asserted that the funds were reallocated to road projects within the state after the suspension of the airport project.
“Today, when people mention funds for the airport project,” Mr. Ikpeazu stated, “they are questioning my decision to alter course, and I, as governor at the time, had the prerogative to say, ‘I no longer wish to pursue this airport venture.'”
He elaborated that he opted to redirect the funds intended for airport construction towards road projects due to the lack of adequate road infrastructure for air travelers arriving in the state.
“I am happy that today, I finished Eziukwu Road from that (airport) fund. I finished Faulks Road from that fund. Ngwa Road is okay, Osusu Road is okay. So today, you can connect Ariaria (Market) through Osusu Road to Eziukwu Market and connect Eziukwu Market to Ngwa Road Market.
“So, I succeeded in interconnecting all the markets courtesy of that fund which we were supposed to deploy for the airport and (I) thank God we took that decision because if we had gone ahead with that, N10 billion wouldn’t have done an airport. So, I assure you no dime of that money was diverted,” he said.
In contradiction to assertions made by his successor, the former governor clarified that the funds were disbursed to over 20 contractors for various projects, not 32 companies as claimed. He emphasized that his administration had made public the details of how the funds were allocated to the contractors, urging the new administration to trace the transactions to ascertain whether any diversion occurred.
“If they scrutinize the trail of that N10 billion…,” he stated, “they will find that Faulks Road, Eziukwu Road, Ejike Lane, Milverton, and Afor Ibeji in Ubakala were all executed by my administration using those funds.”
In response, Mr. Ikpeazu’s former Commissioner for Information, Mr. Kalu, for comments on certain findings in the audit report, such as alleged fund allocation to nonexistent projects, unauthorized payments, withdrawals, and unutilized credit facilities.
Mr. Kalu emphasized that, contrary to Mr. Otti’s assertions, the assessment conducted by KPMG was solely a financial process review, not a forensic audit report. He noted that the document included caveats, such as the unavailability of certain documents during the review period.
The former commissioner raised concerns regarding some claims in the report, particularly the alleged award of contracts without proper approval, suggesting that they warrant further examination.
“What KPMG did in that review was simply to lift off all documents they found wherever without checking to do the forensic side which simply involves following the money trail. A proper forensic audit will follow the money trail to the last person who got any dime,” he said.
“If a contract was awarded without approval, as claimed, you also need to find out if the same contract was funded. Where there is funding, then you are wasting readers’ time with an attempt at witch-hunting,” Mr Kalu added.
In response, Okey Kanu, the Commissioner for Information in Abia State, informed reporters that the state government has submitted a copy of the report to the Economic and Financial Crimes Commission (EFCC) for potential prosecution.
“From all indications, some of the persons who were mentioned in that report have been invited for questioning. So, it is after further investigations or questioning by the anti-graft agency (to determine) if these persons are actually found guilty of any form of financial malfeasance, then they will be prosecuted by the EFCC,” Mr Kanu said.
Mr. Kanu highlighted that the EFCC commended Governor Otti for initiating the audit, noting that the report has facilitated their investigative efforts.
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