The Senate has asked that a total of N4.923 Billion payment made to staff and contractors in breach of procurement process and approvals in the Niger Delta Development Commission (NDDC) should be refunded to the Federation Account with immediate effect.
The amounts to be refunded include payments made to staff for Overseas Travel to the United Kingdom, N85.7 Million; Scholarship Grants, N105.5 Million; Union Members Trip to Italy, N164.2 Million. Others are releases for Lassa Fever Kit, N1.96 Billion; Public Communication N1.12 Billion; and Covid-19 Relief, N1.49 Billion.
On the controversial Forensic Audit, the Senate resolved that for the audit to achieve the purpose for which it was set up and inspire confidence in the operational and financial processes of NDDC, oversight of the audit should be transferred to the Office of the Auditor General of the Federation.
“This will guarantee independence, credibility, transparency and professionalism in the output of the exercise. Furthermore, the Committee recommends that the President with advice from the Auditor General should appoint a renowned, internationally recognized Forensic Auditor to carry out the exercise” the Upper Legislative House suggested.
On allegations of blackmail by the NDDC Management against members of the National Assembly on contract awards, the lawmakers insisted on investigations by the Senate Committee on Ethics and Privileges.
The Senate also recommended that all expenditures on historical contracts and obligation e.g Hotels, court judgement etc should be refunded as payments are not provided for in the budget.
Other details of the Senate resolutions on NDDC in the areas of:
▪︎Corporate Governance and Executive Management: Reconsideration of Executive Oversight:
For the purpose of consistency and equality of policy, there is a need to review the inconsistencies and differences in the apex control of these development commissions. In retrospect, the original arrangement of putting these commissions in the Presidency should be carefully reconsidered to allow for direct Presidential oversight in view of the huge public resources allocated to them. Section 7 (3) of the NDDC Act already provides for this Presidential supervision.
▪︎Appointment of the Board of Directors: The absence of a Board of Directors at NDDC created a major lacuna of oversight. The Ministry of Niger Delta is culpable of negligent supervision and could not function as effectively as a board would have done.
Therefore, the committee strongly recommends that the President should activate the statutory provisions in the Act and the Board of Directors validly nominated and call for fresh nomination for confirmation by the Senate.
▪︎ Inauguration of Other Accountability Mechanisms: The Monitoring Committee and the Advisory Councils should also be inaugurated along with the Board of Directors as provided in Sections 20 and 21 of the NDDC Act.
This is necessary to ensure that there are sufficient checks and balances in the internal affairs of the NDDC.
▪︎ Improvement of Governance/Processes:
The new Board should be made to undertake a review of the existing governance framework, with attention to upgrading the way and manner the board executes its mandates, with a view to re-establishing a new culture in the organization. The review must bring order to the workings of the management and their control of the organization.
This is necessary for the improvement of the structures and processes of the NDDC especially having witnessed two interim managements with seemingly loss of control on project and staff expenditure.
▪︎ Financial Accountability and Framework Review: Restoration of a Budget-Led system – The NDDC Management must henceforth promote the use of its approved annual budget as the principal instrument and authorisation for all its expenditures.
The testimonies from Public Hearing gave sufficient insight into NDDC’s disregard for its budget, as several expenditure items were done without reference to budget provisions. As at the time of writing this report, the Adhoc Committee’s request for a report of budget performance from the NDDC has not been provided.
▪︎ Submission of Quarterly and Annual Performance Report: That NDDC be reminded of its responsibility to submit its Quarterly and Annual Performance Reports as and when due as stipulated in Sections 19 and 20 of the NDDC Act. Such submission must also be duly passed to both houses of the National Assembly as stipulated in the law.
▪︎ Strengthening OF Procurement Process: That the NDDC must strengthen its procurement department through appropriate staff engagement (e.g. by appointing staff with procurement chartered status), staff training and formulation of appropriate industry rated internal control measure specifics to procurement function to forestall sharp practice in its bids and tender process.
▪︎ Business Process Re-engineering (BPR):
That NDDC should be made to undertake a thorough and substantial Business Process Re-engineering (BPR) without prejudice to the much- awaited Forensic Audit, covering its areas of operation thus:
Review of Operation and Processes.
Standard Operating Procedure (SOPs) in the Commission must be reviewed upgraded, reinstituted with full documentation and formal trainings conducted, then translated into readable materials and manuals for guidance of current and future of the Commission.
That NDDC must engage a new governance system around projects and contracts from advert to award and then to delivery. This involves the pre and post-implementation step to be taken for an effective delivery of projects.
▪︎ Review of Financial/Accounting Processes: That NDDC must review its financial system to ensure its adequacy in terms of controls and flexibilities with a view to ensuring that a robust financial report is produced out of the system at all times.
This reform will also ensure that all compliances measures that fosters governance and accountability traits are captured in the system in form of coding of transactions, hierarchy and secured access/control.
▪︎ Review of Human Resources Policy
That the management must agree a policy to refocus the staff, and management of the NDDC based on its core mandate. This will be a blend of human resource reform and training. This reform must lead to a robust organogram based on staff need, it must also cover the engagement of staff, staff orientation mandate, appraisal systems and eventually severance of work relationship.
▪︎ Instituting Performance Based Organisation: For NDDC to deliver on its mandate, it must immediately imbibe some of the processes associated with high performing organisations. These include target setting for employees, performance appraisal linked to reward system and the evolution of a new corporate culture.
Present attitude that tends to view the NDDC as a source of easy money must be discouraged. This attitude is also closely tied to the narrative that has characterised succeeding management. It is akin to a self-fulfilling prophesy that has in itself led to a vicious circle that seems to suggest “we are financially imprudent because we operate in an environment of siege where we must continuously appease our stakeholders”
But doing this as they deprive the region of the needed development which also reinforces restiveness and creates the siege environment. This circle must be broken through a new culture and awareness by which the Board and Management of NDDC understands its responsibility to engender a new thinking and strong focus on infrastructural development of the region. A new approach to human resource management is desired.
▪︎ Enhancement of Internal and External Audit capacities: That management must review the Service Level Agreement they currently hold with their external auditor with a view to making a change of auditor. There is a lot of merits in our opinion, to change the external auditor, given the level of systematic failures already listed in this repot, some of which should have been resolved by an effective audit regime.
▪︎ Review of Corporate Social Responsibility Policy (CSR): That the management embark on a CSR review to restructure and reshape NDDC’s social responsibility to its staff, community and the public at large in order to properly ensure an equitable and responsible delivery of these responsibilities without losing focus of its corporate mandate. The scope of this review should include condolences, community relations and stakeholders engagement.