EFCC investigation details multi-billion naira fraud at Rural Electrification Agency

By solacebase.com On Mar 15, 2024

Ahmed Salhijo, EFCC, investigation, multi-billion naira fraud, Rural Electrification Agency — Rural Electrification Agency. Credit-Facebook

A report by the Economic and Financial Crimes Commission (EFCC) has provided details of the theft of public funds at the Rural Electrification Agency (REA), confirming a PREMIUM TIMES exclusive report and indicting the former management team of the agency headed by erstwhile Managing Director, Salihijo Ahmad.

The management team was suspended and replaced by President Bola Tinubu last week over alleged N1.2 billion fraud.

A team of investigators assigned by the EFCC to probe the alleged fraud indicted Mr Ahmad and other senior officials of stealing or misappropriating about N12.7 billion.

President BolaTinubu suspended the management team of the agency on 7 March over the alleged N1.2 billion theft previously reported extensively by PREMIUM TIMES in October last year.

Mr Ahmad was suspended indefinitely alongside Olaniyi Netufo, the executive director, Corporate Services; Barka Sajou, the executive director, Technical Services, and Sa’adatu Balgore, executive director, Rural Electrification Fund (REF) and a new acting management team was appointed for the agency, headed by Abba Aliyu as the Managing Director/CEO.

EFCC probe

EFCC sent investigators to the REA after receiving a complaint alleging cases of criminal conspiracy, criminal breach of trust, misappropriation of public funds, procurement fraud and money laundering at the agency under the leadership of Mr Ahmad.

The four allegations were that Mr Ahmad has 37 bank accounts linked to his biometric verification number (BVN), although he claims on his asset declaration forms with the Code of Conduct Bureau that he has only two accounts; that in June 2023, senior officials of the agency siphoned N300 million

under the guise of a training programme; that N1.2 billion was also siphoned between March and June 2023 through eight staff in the agency’s account department; and that a director, Alaba Netufo, was running a private business to which some contractors of the agency had on several occasions paid money.

However, according to the investigators, in the course of their probe, they received fresh information “regarding other categories of large-scale misappropriation of public funds within the agency.”

These include “gross misappropriation” of N12.4 billion in COVID-19 funds disbursed by the federal government to the agency in two tranches of (N6.2 billion) each in 2020 and 2021.

Investigators were also told that the agency was coercing contractors executing zonal intervention and capital projects to pay five per cent of the contract sum as ‘’monitoring and evaluation’’ charges, “which are usually paid in cash to senior/management staff of the agency and are, more often than not, embezzled.

They also heard that payments totalling N728.9 million (N728,915,229.04) made by the agency to 15 contractors in 2023 for consultancy jobs were “channels for stealing and diversion of public funds majorly because by virtue of the job roles of certain staff of the agency being zonal coordinators,

project department as well as monitoring and evaluation department, it was unnecessary, ridiculous and alarming that external consultants were still engaged to execute the same responsibilities.”

The investigators then presented their findings on the various categories of allegations in an interim report.

Mr Ahmad’s 37 Bank Accounts

“That Ahmad Salihijo Ahmad has (37) bank accounts linked to his biometric verification number.

“That the Bank Verification Number (BVN) printout depicts irregularities as there are different dates of birth associated with the suspect.

“That the (37) bank accounts in (ii) comprises (14) corporate accounts, (21) personal accounts, and (2) other accounts in the names of Bilkisu Salihijo.

“That on the 1st of September, 2020, Ahmad Salihijo Ahmad declared his assets with the Code of Conduct Bureau.

“That the suspect declared only two bank accounts with the Code of Conduct Bureau.

“That the suspect did not declare that he owns any factory or enterprise in the forms he filled at the Code of Conduct Bureau.

“That the suspect made false declarations at the Code of Conduct Bureau as he operates (27) active accounts against the (2) accounts declared by him.

“That the suspect made false declaration at the Code of Conduct Bureau as he stated that he does not have any factory or enterprise while in reality, he is a director in (5) companies and shareholder(owner) in (4) companies.”

B. N300M allegedly stolen through Training Programme

The investigators found that the two companies awarded the contracts to conduct the training programme for the staff of the agency, Cees Assist Resources Limited and Braintask Value Resources Limited, have the same owner, one Umaefulem Chibueze, who was used to siphon funds through the programme.

“That on the 6th March, 2023 and 10th of April, 2023 respectively, Mr Umaefulem Donatus Chibueze dispatched an application/training proposal to the Managing Director of the Rural Electrification Agency, seeking the training of the Agency’s staff.

“That Cees Assist Resources Limited application in (ii) emphasized that the training cost per week for each participant is (N450,000.00) which translates to (N128,571.43) for two days being the duration eventually adopted by the agency.

“That Braintask Value Resources Limited application emphasised that the training cost per week for each participant is also (N450,000.00) which translates to (N128,571.43) for two days as well.

“That based on the computation, the payments due to Cees Assist Resources Limited and Braintask Value Resources Limited for two days training of (203) staff of the agency as approved, was supposed to be (N52,200,000.58).

“That between the 16th June 2023 and 23rd June 2023, the Rural Electrification Agency made payments totalling (N279,330,197.76) to Cees 7 Assist Resources Limited and Braintask Value Resources Limited in the sums of (N139,562,569.76) and (N139,767,628.00) respectively.

“That the payments were made into the companies’ Access Bank account numbers 0094494027 and 0107644861.

“That the consultant was overpaid in the sum of (N227,130,197.18).

“That upon receipt of the (N279,330,197.76) by the consultant, the Director of Administration and Human Resources of the Rural Electrification Agency namely Mr Suleiman Garba Bulkwang gave him instructions to remit the total sum of (N144,523,969.00) to other individuals, some of whom are staff of the agency, as well as some contractors of the agency all of whom were conduits for laundering the (N144,523,969.00).

“That the consultant heeded the instruction of the Director of Administration and Human Resources and disbursed the (N144,523,969.00) as instructed.

“That the consents of the recipients of the funds in (x) were not sought before they were paid the monies.

“That upon receipt of funds in (xiii), the Director of Administration and Human Resources Suleiman Bulkwang once again contacted the recipients and gave directives for the disbursement of the funds to various other persons thereby, creating a complex trail of transactions in a bid to launder the funds.

“That having disbursed the (N144,523,969.00) as instructed in (x), and having being qualified to get the (N52,200,000.58) for the training exercise which was eventually executed, the consultant still had in custody, the balance of (N82,606,228.18) representing his share of the proceeds of crime.

“That from the proceeds of crime, the consultant made payments totaling (N54,000,000.00) to two real estate companies namely Jaykim Properties and Logistics Enterprises and Urban Shelter for purchase of properties from the loot.

“That the consultant also made payment of (N3,855,000.00) for Bureau de Change transaction.

“That the said consultancy/training contract was not appropriated for in the 2023 Appropriation Act and should never have been considered and paid for.

“That the agency did not carry out any procurement exercise, neither did it obtain requisite Certificate of no Objection from the Bureau of Public Procurement (BPP) prior to its engagement of the Consultant in clear violation of the Public Procurement Act, 2007.

“That the total payments of (N139,562,569.76) and (N139,767,628.00) made to Cees Assist Resources Limited and Braintask Value Resources Limited exceeded the approval threshold of the managing director of the agency, Ahmad Salihijo Ahmad because his payment approval limit for consultancy services in year 2023 was (N99,000,000.00) and below.

“That for payments exceeding over (N99, 000,000.00), the Ministerial Tenders Board approval should have been gotten by the Agency.

“That in order to bring the payments within the threshold of the Managing Director of the agency, monies paid to the consultant were split into (12) tranches in ranges between (N18, 000,000.00) and (N27,000,000.00).

“That the Managing Director of the Agency approved the payments for the said training as proposed and processed by the Director of Administration and Human Resources Suleiman Garba Bulkwang, Executive Director Corporate Services Mr Alaba Netufo, Director of Finance and Account (Funds) Abdullahi Sambo.

“That the Director of Finance and Account (Funds) Abdullahi Sambo, authorised the payments made to the consultant without sighting necessary documents showing that the consultant was engaged upon execution of requisite procurement process in accordance with the Financial Regulation 2009.

“That ultimately, the sum of (N227,130,197.18) was criminally diverted and laundered out of the (N279,330,197.76) received by the consultant.”

N1.2 Billion Taken From Agency’s Account

The report threw light on the N1.2 billion fraud earlier reported by PREMIUM TIMES that put the management of the agency in trouble.

“That in August 2022, Abdullahi Sambo, a staff of the office of the Accountant General of the Federation, was posted to the Rural Electrification Agency where he was first posted to the Audit Department after which he was posted to the head of the Finance and Accounts Department.

“That upon resumption in the Finance and Accounts Department in March 2023, he informed the staff of the department that monies were going to be paid into their bank accounts, which they have to remit for the purpose of ‘project monitoring’.

“That consequently, between March and June 2023, payments totalling (N1,481,389,518.11) were fraudulently made by the Director of Finance and Accounts into the bank accounts of (8) staff of the department as well as himself as highlighted hereunder:

“That the payments were made using ridiculous narrations such as ‘’implementation of performance management system and compliance monitoring’’, ‘’ programme for monitoring investment and development of power sector’, International / Local Investment and Development of Power Sector’’ etc.

“That the said payments were made by the Director of Finance and Accounts to the said accounts without necessary approvals, procurement process documents and other substantiating documents as required.

“That upon receipt of the said funds in (iii), the said Director of Finance and Accounts gave instructions for disbursement to the staff.

“That Usman Kwakwa, being one of the staff in (iii), was at that time, the Personal Assistant to the Director of Finance and Accounts.

“That the Director of Finance and Accounts instructed (7) staff listed in (iii) (1) – (7), to transfer bulk of the funds to Usman Kwakwa as well as other persons being his allies and some other staff of the agency.

“That the Director of Finance and Accounts further instructed Usman Kwakwa to disburse the collected funds to his friends and allies.

“That upon receipt of the loot, the Director of Finance and Accounts instructed his allies in (ix) to purchase various choice properties and assets being plots of land, houses and a car in his favour.

“That the Director of Finance and Accounts also directed Usman Kwakwa to convert the total sum of (N159,608,464.38) to United States Dollars; this he did using two Bureau De Change Operators namely Laba Ibrahim and Ahmed Musa.

“That Usman Kwakwa also transferred various sums of monies totalling (N115,749,000.00) to some senior staff and management of the agency.

“That the Director of Finance and Accounts benefitted over (N414,346,343.51) from the loot.

“That the remaining balance of the loot remained with the staff who had already disbursed the bulk of the payments as instructed.

“That investigation into the (N1.2) billion naira loot had earlier been carried out by the SIT, ONSA as well as the Independent Corrupt Practices and Other Related Offence Commission (ICPC).

“That some of the balance remaining with the recipients were recovered by the two agencies (ICPC and ONSA).

“That all the staff of the Finance and Accounts department involved in the loot have been suspended and dismissed by the agency while the Director of Finance and Account and his Personal Assistant have been returned to the Office of the Accountant General of the Federation as they are pool officers.

Misappropriation of N12.4 Billion COVID-19 Funds

In 2020 and 2021, two tranches of N6.2 billion naira each were disbursed by the federal government to REA, meant for the government’s economic sustainability plan of ‘’Energy for All’ aimed at mass rural solar power lighting.

With the fund, the agency decided to procure solar mini-grid and solar lights in selected healthcare facilities and surrounding communities across the country

The investigators found: “That for all the contracts proposed to be awarded by the agency, Selective Tendering procurement method was adopted and it was imperative to therefore seek ‘’certificate of no objection’’ from the Bureau of Public Procurement (BPP).

“That the Bureau of Public Procurement (BPP) issued ‘’Certificate of No Objection’ while emphasising that the agency should invite and request financial quotations from various companies for each lot, before awarding the contracts.

“That for most of the lots, the agency did not heed the directive of the Bureau of Public Procurement (BPP) but rather went ahead to award most of the contracts to their choice contractors without inviting other approved contractors for each lot.

“That this approach did not give fair value to the government as financial quotation was not sought and received for consideration from other contractors as approved by the Bureau of Public Procurement (BPP).

“That the Rural Electrification Agency therefore awarded a total number of (77) contracts and (7) consultancy jobs to various contractors.

“That the narration of the contract award as furnished by the agency indicates contract splitting as contracts with same project narration which should have been awarded as a single project, were split in numerous bits.

“That the splitting of the contracts into numerous bits below (N250,000,000.00) allowed for the approval of the Managing Director of the Agency.

“That the approval limit for the Managing Director for ‘works’’ in 2020 and 2021 was (N250,000,000.00) & below as any contract cost higher than that would have warranted Ministerial Tenders Board approval outside the control of the Managing Director of the Agency.

“That payments totalling (N313,111,070.40) were made by the agency to various companies not captured or approved by the Bureau of Public Procurement (BPP).

“That overpayments totalling about (N310,000,000.00) were made to three contractors, which exceeded the contract award amount.

“That five contracts totalling (N583,671,221.67) were furnished as Covid-19 contracts by the agency but Remita platform being the central source of all payments, did not reveal any form of payments to those companies; hence these contracts were used to pad the agency’s submission to the Commission in a bid to camouflage its misappropriation of the said sum.

“That suspicious payments totalling over (N80,000,000.00) were made to various staff of the agency under the guise of fictitious narrations such as ‘survey and data collection’’ and economic sustainability programme’’.

“That for some of the contracts, payment vouchers were not raised while for others, relevant supporting documents were not attached in contravention of the Financial Regulation.

“That six consultants were engaged to serve as Project Owner’s Engineers entrusted with the responsibility of monitoring and evaluating the extent of execution of COVID-19 projects across the country.

“That the reports of the consultants in (xvii) have so far revealed that numerous contracts were under-executed, while some of them were no longer functional at the time of evaluation being just about six months after the supposed execution of the projects thereby indicating the use of inferior or substandard materials for the project execution.

“That sadly, some of the projects were also reported as zero per cent executed i.e they were never executed.

“That so far, projects totalling about N2,000,000,000.00 (two billion) have been reported as not executed across the country.

“That the agency however made full payments to the contractors for projects.

Recoveries and recommendations

“For the training programme, full recovery of proceeds of crime is ongoing as the total sum of (N30,000,000.00) has been recovered while four suspects have undertaken to refund the total sum of (N201,000,000.00) representing their share of the looted funds. Additionally, effort is being intensified to bring all accomplices of the crime to justice.

“On the looted (N1.2) billion, there is an ongoing reconciliation of monies and properties recovered by the SIT, ONSA and ICPC in order to recover what is left. So far, the SIT, ONSA has recovered the

total sum of (N207,013,848.00), a duplex building in Karsana Abuja, and an uncompleted filling station along Kaduna road, Abuja, while the ICPC has so far recovered the total sum of (N38,900,000.00),

three landed properties in Kaduna State, another three plots of land in Lafia and one plot of land in Mararaba, Nasarawa State. This Section has also recovered a landed property worth (N46,500,000.00) from one of the 16 suspects.

“Concerning the (N12.4) billion Covid-19 Funds; having carried out extensive investigation of the contract award process vis a vis execution and having engaged with the consultants who evaluated the projects,

it has been established there was a questionable award of contracts, and a significant portion of those contracts were either poorly executed or not executed at all, thereby leading to criminal diversion

and stealing of public funds. Although computation is ongoing to ascertain the exact amount that was criminally diverted based on poor execution and non-execution of contracts, the Section has

so far established that contracts totaling about Two Billion naira (N2,000,000,000.00) were never executed. Additionally, overpayments totaling about (N310,000,000.00) were made to three contractors, which exceeded the contract award amount. The section, therefore, has reasonable grounds to believe

that sums totaling about (N6,000,000,000.00) could have been diverted owing to non-execution, under-execution, and poor execution of the contracts. Strategic recovery of all stolen/ criminally diverted will be carried out upon conclusion of ongoing analysis.

Systemic Vulnerabilities

“It is imperative to state that in fulfillment of the preventive mandate of the Commission, the investigation has unravelled key vulnerabilities, loopholes, and weaknesses in some government systems and operations which creates opportunities for perpetration of fraud. They are as highlighted below:

“Firstly, most government agencies do not fully implement the directives and recommendations of the Bureau of Public Procurement (BPP) as stated in its ‘’Certificate of No Objection’ which is always secured when Selective Tendering procurement method is to be adopted by the agency.

This manifests in the award of contracts by senior and management staff of such agencies to their choice contractors and allies without inviting other competitors as directed by the (BPP) thereby getting better and fairer value for government contracts.

“Strangely, it was also observed that on the GIFMIS platform, there is no provision for upload of documents to substantiate payments made to companies/contractors or individuals and this could create an avenue for commission of fraud by persons entrusted with the responsibility of managing the platform.

The above vulnerabilities enable, ease and aid Criminal Diversion and Stealing of public funds; hence the need to implement decisive and relevant actions so as to reduce incidences of fraud significantly.”

PREMIUM TIMES