Audit Uncovers N3.87bn Irregularities at NAIC

The National Agricultural Insurance Corporation (NAIC) has been indicted over financial irregularities amounting to at least N3.87 billion, with auditors raising concerns over procurement, staff payments, revenue collection, asset management and other expenditures.

The findings are contained in the 2024 Annual Report on Non-Compliance and Internal Control Weaknesses in Ministries, Departments and Agencies (MDAs) by the Office of the Auditor-General for the Federation (OAGF).

The report identified several breaches of financial regulations, including contracts awarded without proper approval, payments made without supporting documents, questionable allowances and missing government vehicles.

The auditors said NAIC management failed to respond to any of the observations contained in the report, prompting the OAGF to recommend recovery and remittance of the affected funds to the Treasury. It also warned that failure to comply could attract sanctions.

Among the major findings was the award of contracts worth N1.09 billion without confirmation by the relevant political authority. 

The corporation also awarded N542.29 million in contracts to non-accredited training consultants, while another N483.6 million in contracts allegedly violated conditions set by the Bureau of Public Procurement.

The audit further uncovered N291.27 million in contract splitting, which the auditors said amounted to circumvention of approval thresholds. Another N266.56 million was paid to contractors without proper valuation or evidence that the work had been carried out.

NAIC was also found to have acquired N130.25 million worth of information technology equipment without clearance from the National Information Technology Development Agency (NITDA).

The personnel records of the corporation also came under scrutiny. Fifty-six staff members were reportedly irregularly placed, resulting in excess salaries and arrears of N6.19 million. The auditors directed management to reverse the promotions and recover the excess payments.

The corporation was also accused of paying N56.66 million in unapproved allowances without the required evaluation and approval, while N40.98 million was reportedly paid as domestic staff salaries to management staff. Another N2.4 million was allegedly paid as Sallah bonuses to non-existent domestic staff.

Asset management was another major concern, with vehicles valued at N98.68 million reportedly scrapped and sold prematurely, while vehicles worth N117.04 million were declared missing.

On revenue, the audit identified N265.28 million that had not been collected, while the 36 states and the Federal Capital Territory owed NAIC a combined N1.99 billion.

The report also flagged N35.37 million and $14,992 spent on international trips without approval, alongside an alleged $58,169.9 irregular insurance claim payment.

Other findings included N42.49 million paid before pre-payment audit, N17.62 million spent on diesel for personal use, and N2.51 million in breach of the Federal Government’s e-payment policy.

The OAGF directed NAIC management to account for the questioned expenditures and recover funds where necessary, with the affected amounts to be remitted to government coffers.