KPMG, the audit firm contracted to review the activities of the pension task force team and that of the Police Pension Office (PPO), has made two startling revelations which expose the huge lax regulatory oversight and internal control flaws in pension fund management.
The first finding reveals the impunity with which Abdulrasheed Maina, head of the pension task team, allegedly exceeded his payment mandate, authorising a total of N396.23 million in irregular payments from an account that has a specific purpose other than that.
The second is how he allegedly escalated the running cost for PPO to N480 million in two months, N400 million more than the N80 million appropriated in the 2011 budget from an account domiciled in First Bank Plc.
“Both actions highlight the complex and confusing regulation for auditing pension funds in the country,” according to a core PenCom insider. “He could pull that off because nobody has the specific duty to check and control such huge level of stealing.”
Maina authorised payment of the amount for estacode and Duty Tour Allowance (DTA) described as overhead/running cost from PPO Unity Bank account number 233183485601000300.
The fund in the account is specifically for the payment of pension arrears according to Wada Ahmed, the former director, PPO, in his handover note of June 8, 2011.
A breakdown of the payments described as irregular by KPMG, include N177.23 million expended on DTA and estacode on the offshore biometric capturing exercise, N184.4 million spent on biometric capturing exercise within the country and another N34.6 million.
Only N140 million of the N177.23 million spent on biometric data exercise in the Diaspora was captured by the KPMG team and featured in its report to Ngozi Okonjo-Iweala, the Minister of Finance and Coordinating Minister of the Economy.
Other expenditures of N184.4 million and N34.6 million, said to have been spent on biometric data capturing exercise within the country were hidden from the KPMG team and as such were not reflected in its report.
Findings on the N34.6 million revealed that the actual expenditure was N17.3 million but was duplicated, with two supporting documents to bring it to N34.6 million. Also, while one set of documents said the N17.3 million payments was for the entire exercise in the 36 states of the federation and the FCT, the other set of documents for the other N17.3 million said it was for the exercise only in the North East zone. Furthermore, the covering memo for the two sets of documents said the payment was for members of the task team but observation of the attached names showed that one Ayoka S was the only member of the team that featured on the two documents which contained a total of 26 names.
Another issue was that the memo and the supporting documents were raised on July 25, 2011 while the e-payment schedule according to the Unity Bank’s stamp was received on July 12, 2011. Maina also approved the first documents for payment on July 7, 2011 while the second set was approved for payment on July 14, 2011.
According to the two sets of documents signed by I. Atabor on July 25, 2011 and paid from the Unity Bank account, the first set of documents show that N17.284 million was for the BTA and other travelling allowances approved for the monitoring officers for the biometric data capture throughout the federation vide C/man PRIT approval on page 74 dated July 7, 2011 file number PPO/163 touring advance.
The document marked PPO/PEN/727 noted that the money was for 13 persons including Tunji Olaopa and two personal aides, Goni Aji Bukar and two personal aides, A.M Daniel Nwaobia (Mrs) and one personal aide. Others are Abdullahi A.B, Olalekan Ajayi, Murualis Ceojina (Mrs), Eluma Matthias and T.D Aiyedona.
It read thus: “Sequel to the approval of the head of service of the federation on the reform of the police pension office by the task team on pension reforms (TTPR), the reform team has embarked on nationwide biometrics verification of Police pensioners for a period of 21 days.
“Accordingly, the HOSF has approved that the following officers should monitor the conduct of the exercise in the 36 states of the Federation including Abuja. The e-payment was approved by both Abdullahi and Magaji and sent to Unity Bank on July 11, 2011.”
The memo was raised on July 25, 2011 but Unity Bank got the e-payment schedule on July 12, 2011. The e-payment schedule also stated that it was for eight persons as against 13 persons in the supporting document.
The Federal Government voucher with classification code 023005006001302 attached to the first set of documents showed that it was vetted and cleared on July 26 2011.
The other N17.3 million in the second set of documents marked PPO/PEN/725 noted that it was for DTA and other travelling allowances approved for the task team on pension reform members to travel nationwide for biometric enrollment of police pensioners for a period of 21 days vide C/man PRTT approval on page 2 dated July 14, 2011 file number PPO/655.
The documents reads: “Sequel to the approval by the head of the civil service of the federation on the reform of the Police pension office by the task team on pension reforms (TTPR), the reform team has embarked on a nationwide biometric enrollment of police pensioners for a period of 21 days”.
It went further “accordingly, the HOSF has approved that the following officers should monitor the conduct of the exercise in North East Zone and the earlier group to monitor the exercise in North West Zone”.
The officers, according to the second set of documents, are Charles Bonat and two personal aides, Mohammed Dauda and two personal aides, Nimfel Nanven and one personal aide. Others are Ayo Otepola, Danmamman .M, Ayoka S (DCP), Bala M, and Abbey I.
Like the first set of documents, observation of the supporting documents for the second set revealed some anomalies.
The memo and the supporting documents were raised on July 25 but were approved by Maina for payment on July 14, 2011.
The e-payment schedule that was received on July 12, 2011 at Unity Bank and signed by both Yusuf and Magaji, stated that the payment was for eight persons as against 13 persons listed in the supporting documents.
Further investigation by BusinessDay showed that Maina tried to defend the action by referring to the letter in which he was drafted to the PPO. Referring to a letter from Afolabi referenced HCSF/062/S.I/II/21 of June 8, 2001, he said he interpreted the clause “oversee the operations of the police pension office” in the letter to mean that “the task team had the authority to take over the management of PPO with Maina assuming the role of accounting officer”.
But Afolabi countered, stating that Maina was not an accounting officer because Adeyemi , the current director of PPO was appointed June 6, 2011, three days to the drafting of Maina to the PPO4.
