Audit Report Flags SMEDAN’s N1.97bn Procurement Violations, Unretired Advances

The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), has been indicted by auditors for procurement violations, unretired cash advances and poor record-keeping involving over N1.97 billion in 2023.

This is contained in the 2023 annual audit report covering the Agency’s activities from January 1 to December 31, 2023.

The audit said SMEDAN awarded contracts totaling N440 million to various Microfinance Banks for the disbursement of grants under the One Local Government One Product (OLOP) programme.

SMEDAN claimed due process was followed through a notice board advert and evaluation of MFBs. Auditors rejected the explanation and recommended that the director-general account for the N440 million, recover and remit it to the Treasury.

The report further revealed that N346,581,300.00 granted to officers as cash advances in 2023 remained unretired as at the time of audit, contrary to Paragraph 1405 of the Financial Regulations.

Management attributed the delay to late release of funds and the extension of the 2023 budget to December 2024. It said the advances have now been retired. Auditors said the response was unsatisfactory and urged recovery and remittance of the full amount.

Auditors also queried payments amounting to N627,363,914.81 for store items including laptops, printers, office furniture and equipment, saying that the items were not supported with Store Receipt Vouchers and were not taken on ledger charge as required by Paragraph 2402 of the FR, 2009.

Management said most of the items were for constituency projects delivered directly to locations.

The audit also flagged a payment of N47.500 million to a company for skill acquisition training in Gombe despite the firm presenting an expired Tax Clearance Certificate covering 2019 to 2021 instead of 2023.

It further revealed that a contract worth N332.500 million was awarded for the construction of a youth centre without specifying a completion date or duration for execution.

The report also queried N60 million paid to two contractors for needs assessment under the 2023 Entrepreneurship Development Programme, noting inconsistencies in the scope of work and the absence of evidence of bidding and completion reports.

Auditors also faulted the payment of N99.795 million for various monitoring exercises, saying there were no monitoring reports to show that the exercises were actually conducted.

The audit also found that eight motor vehicles valued at N13.500 million were classified as unserviceable without a Board of Survey report or valuation from the Federal Ministry of Works, as required by financial regulations.

For all the issues, auditors recommended that the director-general account to the Public Accounts Committees of the National Assembly, recover and remit the monies to the Treasury, and provide evidence of remittance.

They also warned that sanctions for irregular payments and gross misconduct under the Financial Regulations, 2009 should apply where necessary.

SMEDAN, the federal government agency charged with promoting the development of Micro, Small and Medium Enterprises in Nigeria.