The Federal Housing Authority (FHA), a key government agency tasked with providing affordable housing to Nigerians, has come under fire for spending a staggering N2.57 billion without the necessary authorisations. This revelation came to light through the Office of the Auditor General for the Federation (OAuGF) in its annual report, which exposes significant non-compliance and financial mismanagement within federal ministries, departments, and agencies (MDAs) for the year ending December 31, 2021. The damning report was submitted to the National Assembly and has sparked widespread concern over the handling of public funds within the housing sector.
The OAuGF’s audit uncovered a series of unauthorized financial dealings involving the FHA, with the most alarming of these being an investment of N2.5 billion into FHA Homes Limited, a mortgage bank fully owned by the FHA. The investment, which was meant to promote housing accessibility through mortgage financing, has no documented approval from the relevant authorities, most notably the Accountant General of the Federation (AGF).
“No Approval, No Justification”
According to the audit report, the failure of FHA’s management to secure approval for the investment raises serious concerns about the transparency and accountability of the agency’s operations. “There was no evidence of approval for this investment from the relevant authorities,” the report reads. “This unauthorized expenditure directly violates established financial procedures and represents a serious lapse in governance.”
The N2.5 billion investment was made with the aim of boosting the operations of FHA Homes Limited, but the report highlights that there were no returns on the investment, leaving taxpayers wondering about the efficiency and oversight of the funds allocated for this purpose. The OAuGF’s report states that the expenditure was carried out without any clear authorization from the AGF, as required by financial regulations.
Legal Violations and Additional Spending Irregularities
The FHA’s financial mismanagement did not end with the unapproved investment. The audit also flagged the agency for spending N10 million to engage external legal services without the required approval from the Attorney General of the Federation (AGF). This violates a 2003 circular from the Office of the Secretary to the Government of the Federation (SGF), which mandates that ministries and agencies obtain the AGF’s consent before hiring external solicitors or agreeing on legal fees.
Further scrutiny revealed additional irregularities, including the mismanagement of N7.95 million in Life Assurance claims. These funds were reportedly paid from overheads, raising questions about the propriety of such expenditures under the existing financial guidelines. The report also highlighted that the FHA had made irregular payments totaling N2.94 million for social events, and failed to retire cash advances amounting to N10.5 million. Additionally, store items valued at over N36 million were not recorded properly in the agency’s ledger, suggesting possible financial misreporting or fraud.
Despite the gravity of the findings, the FHA management has failed to respond to the audit queries. This lack of transparency and accountability has left many to wonder if the agency is attempting to evade scrutiny or simply ignoring the financial regulations designed to safeguard public funds.
“Public Accountability or Consequences”
In light of these findings, the OAuGF has issued a stern directive to the FHA to account for the N2.57 billion and other funds expended without authorization. The agency has been instructed to recover the misused sums and remit them back into the Treasury. Furthermore, the OAuGF has warned that failure to comply with this directive could result in sanctions, potentially including legal action or the suspension of the agency’s leadership.
“The management of FHA must provide evidence that the misappropriated sums have been recovered and returned to the public coffers,” the OAuGF’s report states. “Should the agency fail to do so, the necessary actions will be taken in accordance with the law, including potential sanctions.”
This directive from the OAuGF is a significant step in holding the FHA accountable for its financial mismanagement. It also serves as a reminder of the importance of adhering to financial protocols in government agencies, especially those entrusted with the task of managing public resources.
FHA’s Role and Mandate
The Federal Housing Authority, established to provide affordable housing for Nigerians, plays a critical role in the country’s housing sector. It is responsible for the development and construction of housing estates and schemes across the nation, as well as facilitating mortgage financing to enable Nigerians to own homes. With Nigeria facing a severe housing deficit, the FHA’s activities are crucial for addressing the needs of low- and middle-income citizens who struggle to secure adequate housing.
Despite the significance of its mandate, the recent audit raises troubling questions about the agency’s capacity to manage funds effectively and transparently. The revelation of unauthorized spending on such a large scale not only undermines the public’s trust in the FHA but also highlights broader issues within the management of government funds.
A Wake-Up Call for Government Agencies
The findings from the OAuGF’s report have ignited discussions on the need for greater oversight and stricter compliance with financial regulations across all MDAs. With the federal government’s commitment to improving transparency and curbing corruption, the OAuGF’s actions should serve as a wake-up call for all public sector agencies to tighten their financial controls and ensure that public funds are spent responsibly.
Public accountability, especially in the housing sector, is crucial as Nigerians continue to grapple with the challenges of securing affordable housing. The Federal Housing Authority’s failure to provide clear answers on the N2.57 billion expenditure is a critical issue that the National Assembly and other stakeholders must address to restore public confidence in the sector.
