Revealed! How Osun State Spent It’s Bail-out Fund (Detailed)

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Following accusations from the opposition party in Osun state that Ogbeni Rauf Aregbesola mismanaged the bailout funds allocated to the state some months back.

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Further pressure has been put on the governor to provide the public with detailed analysis of how funds from the bailout were expended.

The Peoples Democratic Party, PDP, Osun state chapter, recently said it was ready to assist the Senate in its probe into how bailout out funds collected by Osun state government was utilized.

The PDP in a statement by its spokesperson, Prince Diran Odeyemi in Osogbo, said Osun state got highest amount of money as bailout but squandered it on phony contracts.

The party declared that Governor Aregbesola allegedly actually diverted the bail out funds meant to pay workers salaries to pay some Lagos based contractors which also included a highly placed official in President Buhari’s administration.

In response to the offer and accusations, the Osun State House of Assembly made available to Omojuwa.Com a detailed document which encapsulates the analytical breakdown of how bailout funds were expended by the Osun StateGovernor.

Below is a copy of the document obtained by Omojuwa.Com for public perusal and scrutiny

STATE OF OSUN HOUSE OF ASSEMBLY, OSOGBO

REPORT OF THE INVESTIGATION CONDUCTED IN RESPECT OF THE UTILISATION OF BAIL-OUT LOAN RELEASED TO THE STATE GOVERNMENT OF OSUN IN THE YEAR 2015 BY THE FEDERAL GOVERNMENT OF NIGERIA

PREAMBLE

In order to address the issue of inability of some States in the country to pay salary of workers as a result of dwindling allocation from the Federation Account, the Federal Government took the decision to arrange a loan for some States, including Osun, with concessionary terms of payment. The loan was guaranteed by the Central Bank of Nigeria (CBN).

One of the minimum conditions stipulated for the drawdown of the bail-out fund was the provision of the approval of the State House of Assembly, authorizing the borrowing. Hence, series of correspondence were exchanged between the House of Assembly and the Executive arm of Government on the State’s desire for the bail-out loan. The correspondence, marked as Annexure I, are as follows:

State Governor’s request letters No. AD.2/380/Vol.V/27 and AD.2/380/Vol.V/37 of 27thJuly, 2015 and 13th August, 2015 respectively.

House approval letters No.LM.16 Vol.111/294 of 28thJuly, 2015 and LM.16 Vol.IV/6-9 of 14th August, 2015.

APPROVAL AND RELEASE OF THE BAIL-OUT LOAN

The request for the sum of N88,215,468,757.27 which comprised N64,327,492,947.01 and N23,887,975,810.26 for State and Local Governments respectively was forwarded to the Central Bank of Nigeria in July, 2015.

However, the sum of N34,988,990,000,covering N25,871,920,000 and N9,117,070,000 for State and Local Governments respectively was actually approved and released by the Central Bank of Nigeria to the State Government of Osun in August, 2015. The approval letters are hereby attached as Annexure II

UTILISATION OF THE FUND

The utilization of the approved fund in respect of the State Government are as stated below:

Actual amount received = N25,871,920,000.00

Payment made in respect of salaries and allowances of State Government Workers

(Civil Servants and Teachers) = N20,651,082,846.25

Payment made in respect of pensions for the retired Civil Servants and

Teachers= N5,212,057,964.89

Accrued Bank Charges= N5,426,154.60

Total amount spent=N25,868,566,925.74

Balance= N3,353,034.26

Details of the payment made, including copies of certified Bank Statements, are attached as Annexure III

The utilization of the approved fund in respect of the Local Governments are as stated below:

Actual amount received=N9,117,070,000.00

Payment made in respect of salaries and allowances of staff of Local Govern-ments and Primary School Teachers = N7,789,943,410.92

Payment made in respect of pensions for the retired workers of Local Governments and Primary School Teachers =N1,147,237,318.66

Accrued Bank Charges= N6,662,480.97

Total amount spent=N8,943,843,210.55

Balance=N173,226,789.45

Details of the payment made, including copies of certified Bank Statements, are attached as Annexure IV.

EFFORTS MADE BY THE HOUSE IN TRACKING THE UTILISATION OF THE BAIL-OUT LOAN

4.1 Series of efforts were made by the House of Assembly to track the utilisation of the bail-out loan released to the State Government of Osun. A letter emanated from the House of Assembly with reference No.LM.94/Vol.IV/277 dated 12th November, 2015 was forwarded to the State Accountant-General, requesting forcertain information concerning the bail-out loan, among other things. The rejoinder to the letter under reference was received by the Honourable House from the State Accountant- General with reference No. AGC.256/Vol.XII/197 and dated 23rd November, 2015. The two correspondence are hereby attached as Annexure V.

4.2 Moreover, at the House plenary of Wednesday, 30th November, 2016, the Chairman, Finance and Appropriation Committee, under Matter of Urgent Public Importance raised the issue of the disbursement of the bail-out loan in the State and called on the House to thoroughly investigate the matter in view of the hues and cries which it had generated in many quarters.

4.3 Consequently, at the House plenary of Wednesday, 7th December, 2016, a public hearing was conducted on the matter during which all relevant authorities, including labour leaders, Civil Society & Non-Governmental Organisations, market men and women were in attendance.

Copies of the Votes and Proceedings of the two plenary sittings are hereby attached as Annexure VI.

FINDINGS AND OBSERVATIONS OF THE HOUSE

5.1 As a result of the investigation and series of efforts carried out by the State House of Assembly, the following findings and observations were made: that the so-called “bail-out fund” was a loan with a tenor of 240 months (20 years) and concessionary interest rate of 9% per annum(all inclusive on reducing balance) in accordance with the Central Bank of Nigeria letter reference No.GVD/SA/GEN/ABP/02/006 dated August 10, 2015; that the size of the bail-out loan approved and released for the State Government of Osun by the Central Bank of Nigeria was less than the amount requested for; that no specific period was stipulated to cover the utilization of the loan; that full salaries(100%) for the months of March to June 2015 were paid to workers in both the State and Local Government Services as well as pensioners from the loan; that payment of arrears of December 2014 salary and allowances of staffers of Ladoke Akintola University of Technology(LAUTECH) Teaching Hospital, Osogbo was made from the loan; that the deposit Banks for the bail-out loan were First Bank ofNigeria Ltd. and Wema Bank Plc. for State Government portion and Zenith Bank Plc. for Local Governments portion; that all transactions made on the bail-out loan were solely for the payment of salaries, allowances, pensions and other salary-related expenses; and
that the sum ofN176,579,823.71was the current Bank balance in respect of the bail-out loan as analysed below:

State Government:

First Bank of Nig. Ltd. – N2,040,415.07

Wema Bank Plc.– N1,312,619.19

Sub-Total N3,353,034.26

Local Governments:

Zenith Bank Plc -N173,226,789.45

Grand Total – N176,579,823.71

CONCLUSION

6.1 Based on the findings and observations enumerated in paragraph 5(i)-(viii) as well as series of facts and figures made available to this Honourable House, the sum of N34,988,990,000.00,which was approved and released as bail-out loan to the State Government of Osun by the Federal Government of Nigeria in the year 2015, was judiciously utilized.

………………………………………………………………………

Hon. Kamil Temitope Oyedele Hon. Olalekan Rasheed Afolabi Chairman, Finance & Appropriation Chairman, Public Accounts Committee Committee

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