* Sets up reconciliation panel to review 76 outstanding others
* Says levies collected for other agencies do not belong in Federation Account
Sunday Aborisade in Abuja
The Senate Public Accounts Committee (SPAC) on Tuesday cleared the Nigeria Customs Service (NCS) of any wrongdoing in relation to an alleged N62.2 billion under-remittance contained in the 2019 Audit Report of the Auditor-General for the Federation.
The Senate Panel submitted that the funds in question were levies collected on behalf of other government agencies and were therefore not meant for remittance into the Federation Account.
The committee, chaired by Senator Ibrahim Dankwambo, reached the decision after an extensive investigative hearing with the Comptroller-General of Customs, Dr. Bashir Adewale Adeniyi, who appeared before lawmakers to respond to 77 audit queries raised against the service in the 2019 and 2020 audit reports.
At the end of the session, lawmakers also resolved to set up a reconciliation committee comprising representatives of the Senate panel, the Auditor-General’s Office and the Customs Service to review and reconcile the remaining 76 audit queries before further legislative action.
The decision effectively vacated one of the most prominent audit allegations against the Customs Service after senators agreed that the Auditor-General’s report had wrongly classified certain statutory levies as revenue due to the Federation Account.
The disputed query arose from records showing that Customs collected N691.242 billion in 2017 but remitted only N629.23 billion, leaving an apparent balance of N62.2 billion.
The Auditor-General’s Office had classified the difference as an unremitted amount and directed the agency to account for the funds.
Responding to the allegation, Adeniyi told the committee that the figure represented levies collected by Customs on behalf of designated agencies and intervention funds, rather than revenues constitutionally required to be paid into the Federation Account.
According to him, “The under-remittance of N62.2 billion levelled against Customs in the 2019 audit report was wrongly arrived at through misclassification of levies collected.
“While most of the levies are to be collected and remitted into the Federation Account, others like the ones on local production of wheat, textiles and wines do not go into the Federation Account, the totality of which accounted for the alleged unremitted N62.2 billion.”
The Customs boss further explained that most of the issues raised in the audit report stemmed from either misclassification of revenue heads or misunderstanding of the nature of Customs collections.
“When we read through most of the queries, a good number of them were mixed up either by miscalculation or misclassification. The N62 billion are all levies and do not go to the Federation Account,” he said.
Adeniyi added that Customs revenue collection processes had since become fully digitised, making direct remittances into designated government accounts automatic and transparent.
“Customs operations are digitalised. As we receive revenues, they immediately go into the Federation Account. The issue of non-remittances does not arise,” he stated.
The explanation received broad support from members of the committee, many of whom agreed that revenues collected on behalf of third-party agencies could not be treated as Federation Account receipts.
Dankwambo, a former Accountant-General of the Federation and two-term governor of Gombe State, said the distinction between federation revenues and non-federation levies was well established in public finance administration.
“There are various levy accounts which are accounted for independently. There are non-federation revenues and levies. This issue is clear enough,” he said.
Former chairman of the committee, Senator Aliyu Wadada, also backed the Customs Service, noting that the present management inherited most of the issues under review and had shown willingness to resolve them.
“At the time it happened, the present leadership of Customs was not in charge, but at the last meeting they promised to look into the Auditor-General’s observations and provide detailed explanations,” Wadada said.
A member of committee, Senator Osita Izunaso, similarly argued that several of the issues should ordinarily have been reconciled administratively before escalating to a parliamentary investigation.
“We can’t deal with all these things here because some of them are not necessary. They should ordinarily have been reconciled and settled,” he said.
Another member of the Senate panel, Senator Babangida Hussaini, expressed surprise that the first three queries, which were satisfactorily explained by the Customs Comptroller-General, had progressed to the level of a Senate investigation.
“I was in the civil service just like the chairman before venturing into politics. Queries one, two and three that you have responded to ought to have been trashed out at reconciliation level with the auditors and not allowed to get to this stage,” he said.
Following deliberations, the committee unanimously agreed to clear Customs on the N62.2 billion query and similar allegations relating to the same classification issue.
Dankwambo thereafter announced the constitution of a joint reconciliation mechanism to address the remaining audit observations.
He said: “We will set up a committee between Customs and the Auditor-General’s Office to reconcile the issues.
“We are recommending that similar issues contained in the observations raised by the Auditor-General be ironed out once and for all and that only truly outstanding matters be brought back to the committee instead of taking numerous issues that are substantially the same.”
The resolution marked a significant reprieve for the Customs Service, whose leadership maintained throughout the hearing that the disputed amounts reflected statutory levies earmarked for specific purposes and not revenues withheld from the Federation Account.
The reconciliation committee is expected to submit its report to the Senate panel in the coming weeks for further consideration of the remaining audit queries.
