RMAFC Kicks against return of unspent funds
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The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has lamented the situation where Ministries Departments and Agencies (MDAs) of government are compelled to return monies that would have been spent on execution of capital projects to the treasury on December 31 of each year.
Engr. Elias Mbam, chairman of the commission noted this on Tuesday in a memorandum submitted to the Senate Committee National Planning, Economic Affairs and Poverty Alleviation and Finance on the Review of the National Planning and Budgeting.
To correct the anomaly, Mbam told the Senators that government should consider “shifting the Fiscal Year from January 1st to June 1st of each year to enable any incoming Federal or State Government Administration to take charge of its First Year Budget on assumption of duty on May 29th of that year, thereby avoiding budget distortion in the first year of a new administration as obtains presently
He is also seeking to adjust the national budget cycle, to give room for seasonal variation and adequate time for the implementation of projects in compliance with the Public Procurement Act, 2007.
Mbam observed that currently, “the budget cycle does not support maximum utilization of the dry season period which should have been used for construction work thus accounting for low budget performance.”
Mbam also faulted the Envelope System whereby discretionary expenditure ceilings/limits are fixed for MDAs without prioritisation and the failure to take cognizance of the financial requirements for peculiar and specific activities, projects and programmes.
The budgetary model he said is “contracting the bottom-up system of budgeting which promotes stakeholder awareness, consensus building and public ownership of the entire budgeting process and plans in line with global best practices.”
Source: Daily Independent