Budget Office: How Expenditure Controls Blocked Payment of N1.3bn to Fake Agency

•Insists payroll, overhead, capital votes never matured into lawful spending •Declares Budget Office ordered Finance Ministry, Accountant-General to halt payments •Pledges full cooperation with probe James Emejo in Abuja The Director General, Budget Office of the Federation (BoF), Mr. Tanimu Yakubu, yesterday insisted that no public funds were released to the controversial Presidential Economic Advisory Council/Presidential Foreign Intervention Promotion Council (PEAC/PFIPC), adding the country’s expenditure control mechanisms prevented budgetary provision from translating into actual spending.Appearing before the House of Representatives’ Committee probing the matter, Yakubu, in a detailed clarification on the council’s appropriation in the 2026 budget, said although the National Assembly approved funds for the body, the legal and administrative conditions required to access public funds were never fulfilled. He stressed that the appropriated amount remained only a statutory provision and never became an expenditure, stating that the country’s public finance safeguards worked exactly as designed by stopping the release of funds before any payment could occur.The controversy followed the discovery that the 2026 Appropriation Act contained budgetary provisions for the PFIPC, triggering widespread public debate over the council’s legal status and how it found its way into the federal budget.The Nigerian Police Force last week arrested Adeniyi Adeyemi, the disowned Director-General of the non-existent Presidential Foreign Intervention Promotion Council (PFIPC). Adeyemi’s arrest came hours after Justice Mohammed Umar of the Federal High Court in Abuja issued a warrant for his arrest following an oral application by the prosecution lawyer, Wisdom Madaki.This was after the federal government accused Adeyemi of operating the purported PFIPC, an agency the government had said does not exist. The controversy became public after Chief of Staff to the President, Femi Gbajabiamila disowned Adeyemi and the PFIPC and President Bola Tinubu ordered the ICPC to probe the matter.Owing to this, the budget office came under scrutiny over its role in the appropriation.However, Yakubu maintained that his office neither created nor established the council, insisting that it merely discharged its statutory responsibility by costing personnel requirements based on official government instruments already issued by the appropriate authorities.According to him, “not one kobo” of the personnel allocation was drawn, while neither the overhead nor capital provisions matured into lawful releases. He said, “An appropriation is authority in law to make provision for an expenditure. It is not a cheque. It is not a warrant. It is not cash released from the Treasury. Before money can move, other conditions must be met. Different institutions must act. Each must complete its own part. If one condition fails, the chain stops. That is what happened here.“Until Financial Clearance is issued, a personnel provision remains a figure in the budget. It cannot create employees. It cannot place anyone on payroll. It cannot produce a salary payment.” The DG Budget explained that public debate had wrongly assumed that once an appropriation appeared in the budget, the beneficiary automatically gained access to the funds.According to him, appropriation merely provides legal authority for possible expenditure and should not be mistaken for a warrant, cash release or payment from the treasury.Yakubu explained that before any government agency could spend public funds, several statutory institutions must independently complete their responsibilities, including approvals relating to establishment, remuneration, financial clearance, warrants, cash backing and procurement. He further noted that because the expenditure process was deliberately divided among different government institutions, no single office could create an agency, recruit staff, approve salaries, release funds and authorise expenditure simultaneously.According to him, the PEAC/PFIPC case never progressed beyond the appropriation stage because the chain of approvals required under Nigerian public finance laws never opened.Providing details, Yakubu disclosed that although the council initially requested about N3.85 billion for personnel costs, the budget office rejected that estimate and independently computed personnel requirements using approved government staffing templates and salary structures. That exercise, he said, produced a personnel estimate of N802.98 million, which eventually formed part of the Executive Budget proposal and was subsequently appropriated by the National Assembly.He maintained that the figure was an independent fiscal determination by the budget office and not a negotiated reduction of the council’s request. Yakubu further explained that despite the appropriation, financial clearance — the mandatory approval required before recruitment and salary payments can commence — was never issued.He said the clearance could not be granted because critical statutory conditions remained outstanding.Among them, he noted, was the fact that the 2026 appropriation bill had not yet received presidential assent until March 31, 2026, while the National Salaries, Incomes and Wages Commission (NSIWC) had also not completed confirmation that the proposed staffing and remuneration structure complied with approved public service compensation frameworks. He emphasised that without financial clearance, no recruitment could legally take place, no employee could be enrolled on the Integrated Payroll and Personnel Information System (IPPIS), and no salary payment could lawfully be processed.He also stressed that personnel appropriations are never transferred as lump sums to agencies but are instead paid monthly into the accounts of verified employees after all regulatory conditions have been met.He explained that since no staff were recruited and no payroll records were created, no personnel expenditure aroseAddressing concerns over the council’s N200 million overhead allocation, Yakubu explained that overhead provisions equally do not translate automatically into cash releases. He said such funds require treasury warrants and cash backing from the Federal Ministry of Finance and the Office of the Accountant-General of the Federation before any payment can be made.According to him, when questions later emerged regarding the council’s legal status, the budget office formally advised both institutions to withhold every payment instrument that could support any release.Consequently, he said, the overhead allocation remained only a provision in the Appropriation Act and never became cash available to the council. Yakubu also dismissed claims regarding the council’s N300 million capital allocation, explaining that capital votes are subject to an entirely separate procurement regime involving procurement planning, Ministerial Tenders Board approvals, compliance with the Public Procurement Act, Certificates of No Objection where applicable, Treasury warrants and cash backing.He said none of the statutory processes was initiated or completed. According to him, no procurement commenced, no contracts were approved, no warrants were issued and no capital expenditure took place.Yakubu pointed out that the episode demonstrated the strength rather than the weakness of the country’s public financial management system. He said each component of the appropriation encountered a separate layer of statutory control, with personnel expenditure halted at the financial clearance stage, overhead expenditure stopped before warranting and cash backing, and capital expenditure prevented from reaching procurement approval.He maintained that the safeguards collectively ensured that no public money left government coffers, adding that the controls did not discover a loss after the event, but prevented the event. Yakubu maintained that the controversy highlighted the need for Nigerians to distinguish clearly between appropriation and expenditure, stressing that parliamentary approval alone does not create an automatic entitlement to public funds.He said government spending only occurs after every institution responsible for approvals, regulation, financial clearance, treasury authorisation and procurement has fulfilled its legal obligations. According to him, the PEAC/PFIPC case proved that the system functioned as intended by preventing expenditure before it could occur.He therefore, stressed that no personnel expenditure to recover because none was ever incurred, while the overhead and capital allocations equally never matured into lawful releases, nothing that the “money never moved because the controls held”.He said, “The personnel provision stopped at Financial Clearance. The overhead provision stopped before warranting and cash backing. The capital provision stopped before procurement approval and release. Each part met a different safeguard. Each safeguard held.”“The system is designed this way because public finance cannot rest on trust alone. It rests on proof, sequence and divided authority… In the PEAC/PFIPC case, that sequence did not fail. It stopped the expenditure before it began. The money never moved because the controls held.” He reaffirmed the budget office determination to sustain cooperation with any lawful investigation by providing all relevant records, computations and official correspondence to establish that no unlawful expenditure arose from the controversial appropriation.According to Yakubu, “When the three provisions are placed side by side, the record is plain. The personnel provision stopped at Financial Clearance. The overhead provision stopped before warranting and cash backing. The capital provision stopped before procurement approval and release. “Each part met a different safeguard. Each safeguard held. The Budget Office made its own personnel calculation instead of adopting the Council’s unsupported request. It withheld Financial Clearance when the conditions were incomplete.“When doubts later arose about the legal status of the Council, it asked the Federal Ministry of Finance and the Office of the Accountant-General of the Federation to stop all payment instruments.”He added, “The wider system then did what it was built to do. Payroll was never activated. Overhead was not converted into an annual cash release. Procurement did not commence. Treasury instruments did not mature into payment. “The consequence was not theoretical. It can be measured. The N802,978,783.00 personnel provision never became payroll expenditure. The N200,000,000.00 overhead provision never became a cash entitlement. The N300,000,000.00 capital provision never became procurement or capital expenditure. “The legal path from appropriation to expenditure was broken at every material point.” According to him, “This matter shows why appropriation and expenditure must not be confused. Parliament may authorise a provision. That authority still remains subject to the law. Public money moves only after every institution in the chain has done its work and every condition has been met. “The system is designed this way because public finance cannot rest on trust alone. It rests on proof, sequence and divided authority. One office may issue an establishment instrument. Another may approve recruitment.” Another may regulate pay. Another may grant Financial Clearance. Another may issue a warrant. Another may release and cash-back the payment. Procurement must pass through its own legal process. “In the PEAC/PFIPC case, that sequence did not fail. It stopped the expenditure before it began. What has been described in some quarters as institutional weakness is better understood as institutional resilience. The controls did not discover a loss after the event. They prevented the event. They did not chase money after it had gone. They kept it from moving.” He added, “The conclusion is firm. Not one kobo of the personnel provision could lawfully have been drawn, and not one kobo was drawn. The overhead provision never matured into a lawful cash release. The capital provision never matured into procurement or expenditure. The conditions required for spending were not met and were not close to being met. There is therefore no personnel expenditure to recover. The money never moved because the controls held. “The Budget Office of the Federation will continue to cooperate with every lawful inquiry and will provide the records, computations, correspondence and system evidence required to establish the facts. Public confidence is best served by a clear account of what the law required, what the institutions did and why no unlawful expenditure arose.”