The Budget Office Explains Why PEAC/PFIPC Funds Were Never Spent

 

By AfreecanImage News Desk

The Budget Office of the Federation has released a detailed explanation addressing public concerns over the appropriation made for the Presidential Economic Advisory Council/Presidential Foreign Intervention Promotion Council (PEAC/PFIPC). According to the Office, although funds were appropriated by the National Assembly, none of the money was ever released or spent because the legal and financial conditions required for public expenditure were never fulfilled.

Director-General of the Budget Office, Tanimu Yakubu, explained that an appropriation only authorises government to make budgetary provision for expenditure. It does not automatically translate into cash release, salary payments, procurement, or operational spending. Multiple statutory approvals and financial controls must first be completed before any public funds can legally leave the Treasury.

Appropriation Did Not Become Expenditure

The Budget Office stated that the PEAC/PFIPC was recognised through official government instruments, including an administrative budget code issued by the Office of the Accountant-General of the Federation. Establishment approvals and recruitment waivers had also been processed through the appropriate government institutions before the Budget Office calculated the fiscal implications for inclusion in the Executive Budget.

The Council reportedly requested ₦3.85 billion as personnel costs. However, the Budget Office rejected that estimate and conducted its own assessment using approved government salary structures and authorised establishment figures. The resulting personnel provision included in the Executive Budget was ₦802,978,783.

The Office stressed that this amount was an independent fiscal calculation and not a negotiated settlement with the Council.

Financial Clearance Was Never Granted

According to the Budget Office, Financial Clearance is the statutory approval required before recruitment, payroll enrolment, and salary payments can begin.

The Office said that after the 2026 Appropriation Act received Presidential Assent, additional regulatory requirements remained outstanding, including confirmation from the National Salaries, Incomes and Wages Commission. Since those conditions were not satisfied, Financial Clearance could not lawfully be issued.

As a result:

• No recruitment took place.
• No employees were enrolled on the federal payroll.
• No salaries became payable.
• No personnel expenditure occurred.

The Budget Office therefore maintained that not one kobo of the personnel allocation was ever drawn.

Overhead and Capital Funds Also Remained Untouched

The Office further explained that the ₦200 million overhead provision never became a lawful cash release because Treasury warrants and cash backing were never issued.

Similarly, the ₦300 million capital provision never entered the procurement stage. The required procurement processes—including Ministerial Tenders Board approval, compliance with the Public Procurement Act, Certificates of No Objection where necessary, Treasury warrants, and cash backing—were never completed.

Consequently, no procurement contracts were awarded and no capital expenditure occurred.

Internal Financial Controls Prevented Spending

The Budget Office argued that Nigeria's public finance management system functioned as intended by preventing unauthorised expenditure.

According to the Office:

• Personnel spending stopped at the Financial Clearance stage.
• Overhead spending stopped before Treasury warranting and cash backing.
• Capital spending stopped before procurement approval.

It stated that each safeguard in the expenditure chain operated independently and successfully prevented public funds from leaving government accounts.

No Public Funds Were Lost

Responding to claims that public funds should be recovered, the Budget Office insisted that there was no expenditure to recover because no money was ever released.

It maintained that:

• The personnel provision never became payroll expenditure.
• The overhead allocation never became a cash entitlement.
• The capital allocation never became procurement expenditure.
• Treasury instruments never matured into payment.

The Office concluded that the legal process required to transform an appropriation into public expenditure was interrupted at every critical stage, meaning the appropriated funds remained unspent.

Budget Office Promises Full Cooperation

The Budget Office said it would continue to cooperate with any lawful investigation by providing official records, financial calculations, correspondence, and system evidence necessary to establish the facts.

It added that public confidence is best served through a clear understanding of how Nigeria's public finance system operates and maintained that the PEAC/PFIPC case demonstrates the effectiveness of institutional expenditure controls rather than a failure of the system.

Source: Budget Office of the Federation / State House Digital

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