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Tuesday, June 18, 2024

Inside The Massive Fraud In Kogi Councils



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While they receive an average of N180 million each monthly, they can’t pay an average of N60 million monthly staff salary. Why?   By Theophilus Abbah & Usman Bello . Mr Isaac Ibe, 42, is a staff of Igalamela-Odolu Local Government Area of Kogi State. To him, life has become unbearable over the non-payment of his salaries in full for over one year now. As a result he cannot cater for his family, as if he were not in an employment.

Speaking in an interview with Sunday Trust, Ibe said, “I’m a Level 8 Officer, and my monthly salary is supposed to be N50,000. But I’m being paid N20,000 because of what we are told is  percentage payment.  We have been turned into beggars. To pay the school fees of my children has been difficult.  Most times I have to depend on Good Samaritans to meet my obligations as the head of my family.” Mr Ibe is not the only one caught in this labyrinth. Malam Hassan Otse, a staff of Ijumu Local Government Area of Kogi State has the same pathetic story to tell. He lives like a hanger-on because for over a year now, he’s been paid half of the monthly salary he is entitled to.

Malam Otse is also a Level 8 Step 5  Officer  in Ijumu Local Government. His monthly take home pay is supposed to be N57,000, but he told Sunday Trust that he is being paid N21,000, barely 50 per cent of what is  due to him monthly. “I can neither feed my family nor do other things to make them comfortable,” Malam Otsesaid. “I have to borrow money to be able to pay my children’s school fees. I don’t even know how I will pay back the money I have borrowed from my creditors,” he said. Otse, who has a wife and five children, said he suffered from low self-esteem because he could not meet the family’s demand, asking “what is the essence of working when one cannot meet his obligations to his family.”

THE CONCEPT OF PERCENTAGE SALARY PAYMENTS: The genesis of percentage or half-salary payment, according to our findings, was for two reasons: the dwindling allocation from the Federation Account and the implementation of what is termed salary relativity and minimum wage. First, though the crude oil price rose from $56.35 per barrel in 2009 to $110 per barrel in 2012, the monthly allocation to states and local governments dropped sharply, no thanks to oil theft put at about 100,000 barrels per day in the Niger Delta. In Kogi, the percentage salary payment  started in 2011 following the passage of the National Minimum Wage Law, which necessitated that all government employees earn, at least, N18,000. The thenKogi State Governor, Alhaji Ibrahim Idris, claiming that the state government could not pay the wage, came up with what was termed salary relativity, meaning an augmentation of the salaries, though short of the minimum wage. The wage bill in local governments shot up, such that the councils could not pay the ‘relativity salary.’  What some resorted to was the payment of a percentage of the sum, promising that at a future date when the financial situation improved, the balance would be paid.  The situation never improved. Going by the original schedule, local governments in Kogi State were supposed to implement the payment of the N18,000 minimum wage in January 2014. Though it has done so in principle,  due to the paucity of funds, this has not been implemented. Initially, salaries were delayed until the next months in some local governments. In others, payments were made by instalment, depending on the availability of funds and what came from the Federation Account to councils that very month. Sunday Trust further gathered that some of the councils had to take overdraft to augment the shortfall from the Federation Account and pay salaries. Mr Ibe said the situation got worse, from delay in payments, to the payment of half-salary, then to percentages, depending on the capacity of the councils and the disposition of council chairmen. In the last one and half years the percentage salary payment has come to stay in the councils and it is going from bad to worse, as some workers may not receive their salaries at all, especially when such workers are branded as ‘ghost workers’ without evidence. The percentage payment varies from local government to local government.  Some pay 15 per cent, others pay between 20 per cent and 30 per cent, while others pay 40 per cent. Out of the 21 local governments only Lokoja and Okene local governments paid salaries in full  until December last year when they joined other local governments in the percentage salary payment. These councils said they had to join in the percentage payment because of the full implementation of N18,000 minimum wage in January this year. In the percentage payment, Okehi, Ogori/Magongo, Kabba/Bunu, Ijumu, Yagba-West andYagba-East as well as Adavi are paying between 30 and 40 per cent.  All the nine local governments in Kogi East are also paying between 30 and 40 per cent. Lokoja, Okene andAjaokuta Local Government Areas pay 55 per cent salary to their staff members. However, our reporter gathered that the percentage payments depend on the disposition of the chairmen,hence a local government could pay 30 per cent this month, and by next month decide to pay 35 per cent or 50 per cent.

HIGH ALLOCATION VERSUS PERCENTAGE SALARY PAYMENT: The irony in the wage crisis in Kogi Local Government is apparent, considering the fact that it is coming at a time when allocations from Federation Account to the local governments have quadrupled. Before the price of crude oil stabilised at $100 per barrel since 2010, the local governments received between N40 million and N70 million monthly from Abuja, based on the status of the councils. At that time, neither was salary owed nor was it paid in fractions. However, since 2011, the allocations to the councils have risen tremendously. For instance, data obtained from the Ministry of Finance for allocations paid in December 2013 indicated that the least amount received by the local governments was paid to Ogori/Magongo council, amounting to N121,907,625.48, while the highest allocation went to Okene local council which was  N220,155,916.45. Dekina Local Government received an amount quite close to what Okenewas paid, i.e. N210,523,828.59. The total sum received by local councils in Kogi State in December 2013 was N3,500,586,397.14. (See table for details of the payment in December 2013). So, why is it difficult for local councils to pay salaries? A local government chairman who did not want his name mentioned in this story because all council chairmen have been gagged on this matter, revealed that the application of the funds had been bedevilled by massive fraud. “For instance, there used to be what was called joint or common project,” the council chairman said. “As much as N30 million was being deducted from our accounts at source by the Ministry of Local Government for this purpose. We have 21 local governments. That means N630 million went into that account. But the fact is that there is no joint project on ground. What used to happen was that some fake contracts would be awarded projects and payments made to the proxy of some state officials. Then, chairmen would be given cuts from the figure. These fake contractors are building houses in Lokoja, Abuja and even abroad. We had a clash over this deduction, so we have resolved that there would be no deduction at source for any joint project. Chairmen now have to meet to decide what to contribute for joint projects.” Our reporter learnt that the joint project idea was a source of massive fraud to the point that the branch manager of a bank in Lokoja, having discovered the porous way the fund was usually distributed, eloped with some N190 million from ALGON’s account and resigned. No action could be taken against him. Also, a former chairman of ALGON, Hon Farouk Adejo, who was the caretaker chairman of Olamaboro Local Government Area, nearly lost his life over his opposition to the deductions for joint projects. A bomb was said to have been planted at his residence in Lokoja. Because of the vigilance of his family members, the suspicious object was discovered and police invited. The Police Command in Lokoja’s  anti-bomb squad had to detonate the bomb. Such was the tension in the state over corruption-laden concept of joint project by local councils. Our reporter learnt that there is no joint project on ground in most of the local councils. A semblance of such a project was the 20 housing units in every local government initiated during the regime of former Governor Ibrahim Idris. The projects were never completed, as the housing units have been abandoned at various stages of construction. In Olomaboro Local Government Area, the houses have been abandoned. Recently, they were allocated to councillors, but the local council lawmakers rejected them.  Our reporter learnt that projects being executed at local councils at present are funded by SURE-P and MDGs.

CORRUPTION IN SUBEB: Apart from this joint project fraud, the local government chairman, who spoke in anonymity, claimed that there is the bottomless pit called the State Universal Basic Education Board (SUBEB). “This is where the worst fraud takes place,” the local council chairman told Sunday Trust. “Every month, between N60 million and N70 million allocation to my local council is deducted at source and given to SUBEB as teachers’ salaries.  I don’t decide how my teachers are paid; I don’t have a say. Right from Lokoja, this money goes to SUBEB. But I suspect there are hundreds of ghost workers on SUBEB payroll. I tell you, in the last 10 years, no teacher has died; retired or resigned in Kogi State. Is that possible? The wage bill has been constant. The SUBEB officials are living big, while other workers are languishing in penury. We have called for a probe into the payment of teachers’ salaries.” The council chairman, who claimed that his monthly wage bill is about N56 million, added that with all the deductions being done from an average of N180 million monthly allocation to his council, he cannot pay local government staff salaries. “I have to take overdraft from banks to be able to pay 35 per cent of the salaries of staff in my local government. This situation would remain until our financial situation improves.” In May 2014, Governor Idris Wada  sacked the Chairman of Kogi State SUBEB, Alhaji JibrinUsman with the entire board, accusing the agency of rot and fraud. This was as a result of the non-payment of primary school teachers’ salaries for more than five months, in spite of the huge allocations to the body from the local governments’ accounts. With each local government contributing between N60 million and N70 million into SUBEB purse every month for teachers’ salaries, procurement of textbooks and teaching aids, the agency nets an average of N1.3 billion monthly from local governments. Why can’t SUBEB pay teachers’ salaries? An official of the agency who volunteered information but did not want to be named alleged that not all this money is paid into SUBEB account. “Though it is on record that SUBEB gets N1.3 billion monthly, the fact remains that the amount available to us is about a half of that sum, like N800 million. Teachers’ salaries is about N780 million. We don’t know what happens to the rest. And this money is not enough to pay teachers salaries in Kogi State.” If staff salaries are put at less than N780 million, then the suspicion is that the unaccounted sum, put at about N500 million, may be used to service Kogi State political stakeholders, among them top party leaders in Kogi and Abuja, lawmakers and political hangers-on, Sunday Trust learnt. However, the pay schedule at SUBEB is adulterated with ghost workers, two previous investigations into the agency have revealed. As a result of the outcry by local government chairmen over the huge sums being deducted from their allocations in the name of teachers’ salaries, Governor Idris Wada set up a committee headed by a former  Accountant-General of the State, Mr Paul Audu. At the end of its investigation, it was revealed that there were as many as 884 ghost schools in the 21 local government areas of the state. In these schools the total number of ghost workers was put at 2,153. There were also some 1,922 unauthorised employments done by education secretaries in the various local councils, and as many as  86persons who had retired were still on the staff payroll. Also, while on SUBEB’s payroll there was a total of 3,043 headmasters, the panel discovered that there were actually only 2,156 headmasters in all the local councils, a difference of 887 who were tagged as ghost headmasters. However, the differences in the list of SUBEB and headmasters show that in Adavi local government, there are five ghost schools, Ajaokuta one, Ankpa 117, Basa 47, Dekina 142, Ibaji102,  Idah 35,  Igalamela-Odolu 6, Ijumu 49, Kabba Bunu 82. Kogi 11.  Others are Lokojathree, Mopa-Moro, 35, Ofu, 44, Ogori/Magogo, eight, Okehi, 23, Okene, 16, Olamaboro, 53,Omala, 53, Yagba East, 52 and Yagba West, 55.

PROTESTS OVER PERCENTAGE SALARY PAYMENT: Meanwhile, the percentage payment has generated serious controversy and protest by the National Union of Local Government Employees (NULGE) in some local governments. For instance, in Yagba East Local Government Area, workers protested for a week in May 2014 and prevented the chairman, Hon Funsho Ibrahim, from entry into his office. They claimed that while workers were being paid a fraction of their salaries,  the Local Government chairman, councillors and other political office holders were receiving their salaries in  full. After the protest in Yagba East, workers of Okehi Local Government also embarked on protest as a result of the percentage payment. The development, Sunday Trust learnt, forced the National Union of Local government Employee (NULGE) to write to council chairmen and the Ministry of Local Government insisting that, henceforth, both the workers and political appointees be treated equally with percentage payment. The state NULGE president, Comrade Tom Abutu, said “We will continue to resist any attempt to short-change workers as we have been doing since the issue of half and percentage payment. Only local government workers are suffering from the salary percentage payment syndrome in the state. Though the problem began in 2011, it was not as bad as it is now.” He, however, attributed the development to the first line charge deduction from the local government allocation. “The teacher first-line charge deduction is N1.3 billion. Traditional rulers, pensioners are also there. Aside the statutory deductions, there were other deductions that also take place. We then wrote a letter to the governor that apart from statutory deductions, all other deductions should be stopped. We are looking at it that it was as a result of these deductions, especially that of teachers that council workers cannot receive full salaries.” He said the percentage has serious implications on its members, as many have died due to lack of money to seek medical attention when they took ill.  Many could not pay school fees for children while others cannot even feed adequately. Comrade Tom said, “The only way out is to do a proper screening to ascertain genuine workers.   Some people are state government workers and also they are on the payroll of local governments. Some work in Abuja, but they are still on the payroll of local governments. This must stop.” In an interview with Sunday Trust, the Association of Local Government Chairmen of Nigeria (ALGON), Kogi State Chapter claimed that the state government and council were working to ensure the resumption of full salary payment to workers. Though the current Chairman of the group in Kogi State, Hon Aloysius Okino, declined to grant Sunday Trust an interview, his Special Adviser on Media and Strategy, Mr IbrahimObansa, claimed that what is responsible for the inability of chairmen to pay salaries was the shortfall from the federal account. “The councils are also over-burdened by so many persons on their payrolls, majority of who are ghost workers put on the payment vouchers by some unscrupulous elements. It is hoped that the on-going screening will take care of this and correct the anomalies.  Also, the implementation of the minimum wage by the councils is also another factor. Even  localgovernments managing to pay full salaries, like Okene, Lokoja, Ajaokuta and a few others up till December 2013 have been affected by the percentage salary syndrome. They have not been able to meet their salary obligation since January 2014 due to the implementation of the minimum wage, without corresponding improvement in their allocations from the Federation Account.” Aside the percentage payment, Sunday Trust gathered that  local government workers are being owed arrears of between eight and 12 months.

BEYOND ALLOCATIONS: In Kogi State, the fraud that has made it difficult to pay salaries to the council employees is not limited to how politicians and civil servants feast on the allocation from the Federation Account. Even Internally Generated Revenue (IGR) enters into private pockets. Local councils generate funds through taxes collected from traders, commercial motorcyclists, bus and taxi drivers, health centres and environmental sanitation fines. An officer in the Accounts Department of a local government told our reporter that: “Revenue collectors don’t remit the total amount they collect into council purses. They retain about 60 per cent of what they collect. The supervisory councillors take a percentage.  A percentage is taken to the office of the council chairman who decides what to do with it. At the end of the day, not much enters into the council’s treasury. As a result of the crisis in the state, school teachers, in spite of the huge funds paid into SUBEB purse, are on strike because the state government has failed to pay minimum wage, while health workers have been on strike because government failed to honour a deal reached with them. These strikes have been on for between three and seven months now.

*Culled from:Sunday Trust  29/6/2014

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