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Report 0f The Senate Committee 0n Tertiary Institutions And TETFUND

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0N THE MOTION 0N GROSS MISMANAGEMENT 0F EDUCATION TAX FUND 2011 2015:

1.0 INTRODUCTION:

The Senate at its plenary on Wednesday, 2nd December, 2015 deliberated on a Motion on Gross Mismanagement of Education Tax Fund 2011 2015. The Sponsor of the Motion, Senator Abdullahi A. Sabi, representing Niger North Senatorial District, drew the attention of the Senate and indeed Nigeria to the Gross Mismanagement of Education Tax Fund 2011 2015.

Consequently, the Senate resolved and directed the Committee on Tertiary Institutions and Tetfund to invite the Executive Secretary of Tetfund to explain
and give clarity on the matter and then report back to plenary. (S/Res/062/01/15).

1.1 The Motion raised the following issues:

That some institutions got multiple allocations of special interventions while institutions that are their peers did not receive any, That Tetfund granted a Ioan to the Federal Ministry of Education to organize a workshop and retreat in US and Kenya in 2014 2015 outside the guideline of the Act,

That a whooping sum of N500 Million was spent on advert and media in 2015,

That Tetfund spent nearly N1 trillion naira between 2011 and 2015 without visible outcome; and

That N200 Billion collected between 2012 -2013 was diverted to unknown and unspecified uses not recognized under the Act.

2.0 METHODOLOGY The Committee met to draw up schedule of hearings and thereafter held several meetings with TETfund officials, the Ministry of Education officials, Ministry of Finance, Accountant General and Debt Management Office.

2.1. On the allegation that some institutions got multiple allocations of special interventions while institutions that are their peers did not receive any, the Executive Secretary TETfund stated that though the provisions of Section 7(2)(b) stipulates that the Board of Trustees shall “administer, manage and disburse tax on the basis of equality among the six (6) geo-political zones of the federation in the case of special intervention”, Section 7(4) further states that the Board of Trustees ”shall have power to give due consideration to the peculiarities of each geo-political zone in the disbursement and management of the tax”. lt is in exercise of this power that Tetfund gives grant of special intervention, however it is on record that there is no tertiary institution in the country that have not benefitted from the Special Intervention at one time or the other. He presented a list of projects for the past years.

2.2. On the issue of granting of Ioan to the Federal Ministry of Education and organizing a workshop and retreat in US and Kenya in 2014 2015 outside the provision of the Act; the Executive Secretary submitted that no Ioan was granted to the Federal Ministry of Education and that the Fund did not organize any retreat or workshop in US and Kenya, however, a staff management retreat was organized in Nigeria at Ajuji Hotel Abuja, anchored by the Public Service Institute of Nigeria during the period in question. The Fund equally ran a one week capacity building programme for Professors and Researchers in the Universities to build their capacity in Research and Development skills. According to him plans were already on to extend the programme to senior Researchers in Polytechnics and Colleges of Education.

2.3. On the issue of a whooping sum of N500 Million budgeted for Adverts and Media in 2015, TETFund Executive Secretary submitted that the money came from the administrative cost which is 5% of the total education tax collected which is allowed under the Act. That the NSOOm was not from intervention fund set aside for rehabilitation, restoration and consolidation projects in the tertiary institutions.

The Executive Secretary further justified this expenditure on the ground that stakeholders, investors and citizens need to be encouraged to pay education tax by showcasing the numerous achievements which the Fund had made over the years.

2.4. On the issue of Spending nearly N1 Trillion Naira from 2011 2015. TETFund submitted that the total money received by the Fund between 2011 and 2015 amounted to N507‚090‚848,969.87 and not one Trillion naira as alleged. This was corroborated by Accountant General and the CBN. The officials stated further that TETFund intervention had evidently improved the state of physical infrastructure, research, teaching and Iearning environment in our Institutions nationwide. The Executive Secretary maintained that before the establishment of Tetfund, no Nigerian university was ranked among the top 100 in Africa, but that as at today, 28 Nigerian Universities are now ranked among the top 100 in Africa.

Also, that our Polytechnics and Colleges of Education whose programmes failed to meet accreditation standards are now having their programmes accredited by National Board for Technical Education (NBTE) and the National Commission for Colleges of Education {NCCE) respectively due to improved funding injected by TETfund.

2.5. On the issue of diversion of N200 Billion collected between 2012 -2013 to unknown and unspecified uses not recognized under the Act; the Executive Secretary informed the Committee that there was no diversion of funds whatsoever by TETfund rather the Federal Government under the leadership of President, Goodluck Jonathan GCFR in response to Academic Staff Union of Universities (ASUU) agitations, in 2012, took the money and spent it on the implementation of agreement with ASUU on Revitalization of Universities’ lnfrastructural Needs in which the Federal Government committed to spending 1.3 Trillion in (6) six years beginning with N200 billion in 2013 and N220 Billion yearly from 2014 to 2018. However, the actual money belonging to Tetfund that was diverted to other uses by the former administration of President Goodluck Jonathan GCFR that was to be refunded was 273.99billion. This was the actual amount due to Tetfund from Education Tax for 2013. The Committee was also informed that the approval for the refund had already been given in May, 2015 by former administration and that the present administration of President Muhammadu Buhari GCFR has revalidated the approval of the refund in September 2015 and directed that provision be made in 2016 budget. All of the above assertions were corroborated by the Ministry of Finance and Accountant General of the Federation.

3.0. FINDINGS

3.1. That some institutions got multiple allocations for special interventions while institutions that are their peers to did not receive any; the Committee found out that Special interventions were introduced to address critical needs of the institutions in areas where their normal allocations could not address e.g. Programme upgrades, improvements of Iearning and teaching environments.

Again there is no tertiary institution in the country that has not benefitted from special intervention at one time or the other.

3.2. On the allegation that about N200 billion of the Education tax collected between 2012-2013 was diverted to other unknown and unspecified uses not recognized in or permitted under the Act, the Committee found out that funds which amounted to N273‚931‚254‚708.51 (Two Hundred and SeventyThree Billion, Nine Hundred and Thirty-One Million, Two Hundred and FiftyFour Thousand, Seven Hundred and Eight Naira Fifty-One Kobo) (2% Tertiary Education Tax collections for 2013) was NOT transferred to TETFund project account in 2014, rather it was diverted to finance various expenditures, including the Revitalization of Universities’ infrastructure and payment of allowances of Academic Staff of Nigerian Universities during the period under reference on the approval of the former President Goodluck Jonathan. This diversion of Tetfund money to other uses was possible because of

(i) the loophole in the Tetfund Act which allows only the President to be the approving authority for this very important agency that always has huge amount of money in its coffers without including the requirements of the National Assembly’s approval in Iine with the democratic dictate of checks and balances. This is in clear violation of Section 82(4) of the Constitution of Nigeria which states that ”no moneys shall be withdrawn from the

Consolidated Revenue Fund or any public [und of the Federation, except in the manner prescribed by the National Assembly”; and

(ii) the fact that the Executive Secretary and the members of the Board of Trustees were all solely appointed by the President and not confirmed by the Senate made them not to have the strength to raise objection or to nip in the bud the diversion of Tetfund money to other uses.

However, the Committee recently found out Iong after the conclusion of its investigation that contrary to the assertion by the former Executive Secretary that the whole N273,931‚254‚708.51 Billion was diverted to meet the expenditure as stated in 3.2 above, it was Iater revealed to the Committee by the recently appointed Executive Secretary that N10b out of the N273,931‚254‚708.51 Billion was actually Ioaned to the PTDF which the PTDF had recently refunded to Tetfund leaving a balance of N263‚931,254‚708.51 Billion to be refunded by the Federal Government of Nigeria.

This revelation was made to the Committee about three weeks ago during an interactive meeting with the officials of Tetfund led by the new Executive Secretary Dr. A. B. Baffa.

3.3. That the Board granted a Ioan to the Federal Ministry of Education and also organised a workshop and pre-retreat in US and Kenya in 2014-2015 without recourse to guidelines of the fund. The Committee found out that the Board did not give a Ioan to the Federal Ministry of Education and did not organize any retreat or workshop in US and Kenya as alleged. The explanation of the Executive Secretary on the pre-retreat in US and Kenya are consistent with the provision of section 7 (i)(e) of the ACT.

3.4. That a whooping sum of 500 million naira budgeted for advertising and media 201S budget which contravenes rehabilitation, restoration and consolidation of Tertiary Education in Nigeria in accordance with section 3(i) of the TETfund Act 2011. The Committee agreed with Executive Secretary’s detailed explanation in his response to the allegation; that the internal working budget was always from the 5% cost of Administration provided by the Act and NOT from the intervention Fund. Provision for advertisement and media were not Iimited to projects contract activities but to other programmes. For example, In 2014, the Board of Trustees organized a Zonal Town Hall meeting in all the six geo-political zones; where Tertiary Institutions in each zone made detailed presentations to the public on the Status of their intervention projects and programmes. The events were covered live in all the six zones in order to show openness and transparency on the activities of the beneficiaries and the fund. Interactive sessions with tax payers and FIRS, collaborative workshop with ICPC and beneficiaries were also held.

3.5. That after spending nearly one trillion naira between 2011 and 2015 by TET FUND, the state of infrastructure in our tertiary institutions is still very shabby, and mostly run down ”The committee found out that the Fund did not receive or Spend 1 Trillion Naira between 2011 and 2015. The actual funds collected amounted to N507‚090‚848‚967.87 (Five Hundred and Seven Billion, Ninety Million, Eight Hundred and Forty-Eight Thousand Nine Hundred and Sixty-Seven Thousand Eighty-Seven Kobo only). And the 2013, collection as explained earlier was not remitted to Tetfund but was diverted.

4.0. RECOMMENDATIONS

The recommendation and approval for allocation and disbursement of fund belonging to Tetfund is vested entirely in the Executive Arm of Government;

The Board of Trustees, the Minister, and Mr. President. to the exclusion of National Assembly against the democratic practices of checks and balances
which makes for proper accountability. Thus, to prevent future diversion, misallocation and or any tendency inimical to the Tetfund, the Committee recommends as follows:

(a) That in addition to the approval of Mr. President, the approval of National Assembly should be included in the process of allocation and disbursement of funds belonging to Tetfund.

(b) That the appointments of the Executive Secretary and that of the Chairman and Members of the Board of Trustees of Tetfund should be made by Mr. President and confirmed by the Senate;

(c) That the TETFund Act be amended to include (a) and (b) above; and

(d) That Senate should work to ensure the refund of all monies borrowed from the Education Tax Account as there are numerous infrastructural projects to be executed in our tertiary institutions around the country.

5.0. CONCLUSlONS

The Tertiary Education sector is still heavily under-funded judging from the myriads of needs in the Institutions. Therefore, there is need for the National Assembly to safeguard and ensure efficient application of the funds available to the sector.

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