SHOCKER| 2016 Budget Not Predicated on Zero-Based Budgeting – Auditor-General

The 2016 budget was not predicated on the zero-based budgeting system as widely claimed by the federal government and Ministry of Budget and National Planning. This was disclosed by the Auditor-General of the Federation (AuGF), .

Samuel Ukura made this disclosure while defending the budget of his office before the Senate Committee on Public Accounts, admitted that though the federal government had chosen zero-based budgeting as the template for the 2016 budget, it was later forced to jettison it because the reality on ground did not favor its implementation.

Samuel Ukura said the N2.9 billion budgeted for his office this year, just like other proposals in the 2016 budget, was drawn up using the envelope system previously used by the Ministry of Finance.

“The budgets of all ministries, departments and agencies of government this year are all enveloped-based and not zero-based as has been the case over the years, including that of my office, which was even largely done for us by the supervising ministry (budget and national planning ministry),” Ukura, who by virtue of his office is independent and reports directly to the president, said.

“This year’s budget is enveloped-based and not zero-based in anyway; it is the envelope system. The zero-based budgeting they wanted to introduce was not adhered to at the end of the day”.

“In zero-based budgeting, it is assumed that such expenditure does not exist, you start from zero and justify why that expenditure must be used and at the end of it, the result you are going to get out of it”.

“So it is a system which is good and which would have also helped to set targets but that wasn’t applied at the end of the day perhaps because it was hurriedly introduced.

“Under zero-based budgeting, a budget proposal and by extension, defence, is not about fighting but discussing what is made available for one to work with, because what they want, they give”.

Having given his explanation on the differences between the two methods used in the budgeting process, the committee then queried Ukura on why his office shied away from its responsibility of auditing the accounts of the Department of Petroleum Resources (DPR), especially with regards to its penchant for budgeting N32 billion annually as recurrent expenditure when DPR, in the real sense, only has a staff strength of about 1,400 persons.

As the committee attempted to dismiss the auditor-general as incompetent following the perceived failure of his office to raise a single audit alarm despite the rampant cases of corruption in the country including the recent budget padding, its chairman, Senator Andy Uba (Anambra, South), came to his rescue and attributed the shortcomings on poor funding for the AuGF’s office by the federal government.

He described as unacceptable a situation where the important audit office of the federation, which is supposed to be independent, was allocated a paltry N654 million for the audit of the N6.08 trillion budget and all the MDAs.
Uba assured Ukura that the committee would increase the budget, adding:

“If you are not adequately funded, you are exposed to corruption and this committee will not allow that to happen.”

However, officials of the Ministry of Budget and National Planning refuted Ukura’s claim that the 2016 budget was not drawn on the zero-based budgeting process.

One official, who preferred not to be named, said: “Perhaps he does not know what it entails. But I can assure that the Budget Office drew up the 2016 Appropriation Bill using zero-based budgeting.”
He added that the auditor-general does not even work in the Budget Office of the Federation and wondered how he could have spoken on behalf of the office.

He recalled that once the federal government decided to transit from the envelop system to the zero-based budgeting system, consultants were hired by the federal government and conducted extensive training programmes for officials in the Budget Office and Directors of Finance in the MDAs.

“The training sessions took place even before the federal cabinet was sworn in and a template produced for all the MDAs to follow, so how can the auditor-general now say that the zero-based budgeting system was not used for the Appropriation Bill. Did he not go for the training; may be he did not understand it.

“Perhaps the auditor-general was referring only to the budget of his own office and not the entire 2016 budget,” he said.

“Remember that the discrepancies and errors in the 2016 budget arose due to the zero-based budget system. These arose because of the difficulties officials had adapting to the new system, so how can the auditor-general say that it was jettisoned?” .

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