Contractors Form - Jigawa State Government
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Records of Domestic Expenditure Arrears and Clearance Framework

1. Introduction

Through the collaboration of Ministry of Finance and Economic Planning, Due Process & Project Monitoring Bureau (DPPMB) and the Directorate of Budget and Economic Planning, efforts have been ongoing to verify and authenticate available records of Domestic Expenditure Arrears comprising of all financial obligations of whatever nature, that have been incurred by the State Government for which payments have not been made as at due date. The process is tedious due to the sensitive nature of the exercise which generally involves a review of financial and contractual records which must be accurately verified and authenticated. Fortunately, the State does not have any domestic expenditure arrears of recurrent nature – particularly salaries and pensions arrears. In addition, there were reports of the Committee set up by Lamido and Badaru Administrations in 2007 and 2015 respectively to assess and verify outstanding contractual obligations and liabilities inherited by their respective Governments. These reports were generally the basis of the ongoing verification process. Already, it has been determined that a number of the recorded contractual obligations captured in the two reports have been settled by either of a combination of the two administrations. With paucity of financial transaction records from some of the MDAs (including the Treasury), it thus requires a painstaking process to establish a very accurate record of all outstanding contractual liabilities on the State Government irrespective of when liabilities were incurred. This is necessary to eliminate or minimize the likelihood of disagreements when eventually a framework is developed to allow for a systematic and open process of clearing all verified and authenticated outstanding contractual liabilities on the State Government.


2. Coverage and Purpose

This document provides policy guidelines and procedures for managing all the verified and authenticated domestic expenditure arrears of the State. The framework is guided by the World Bank and the Federal Debt Management Office’s [DMO] Template for the establishment of the Domestic Arrears Committee [DAC] as well as established best practices in the settlement of the State’s Domestic expenditure arrears. While the coverage and scope of domestic expenditure arrears covers Unpaid Capital Expenditure Contractual Liabilities and others of recurrent nature such as Pension and Gratuity Arrears, Salary Arrears, Judgement Debts, etc. fortunately, the State only has arrears of payments with respect to capital projects and consultancies. Others financial obligations relate to internal loans including for instance the SME and Budget Support Loans which do not fall into the category of domestic arrears having an agreed amortization plan covered in the quarterly reports to the Debt Management Office (DMO). As a domestic arrears management policy, the framework aims to provide practical guidance in the identification, recording and management of domestic expenditure arrears of the State. It will also help to establish processes and systems to manage and gradually reduce validated domestic arrears over time, while the document also helps compliments other existing policies and provisions in existing financial legislations, extant circulars and financial rules and regulations. Through the Technical Committee setup by the Ministry of Finance and Economic Planning, it is expected that the document – and in particular, the established database of expenditure arrears – would be periodically reviewed and updated to serve as a reference document for the PFM Agencies and other MDAs. In particular this would be so for the relevant officers in the Ministry of Finance and Economic Planning, Office of the Accountant-General, Budget and Economic Planning Directorate, Office of the State Auditor-General, and Due Process and Project Monitoring Bureau.


3. Authenticated Records and Clearance Framework

Based on the records available so far, the established stock of contractual liabilities as of the end of November 2019 amounted to about N3.79 billion. Going by the report of the 2015 Handing-Over Committee which was subsequently verified by another Committee set-up by the Government, liabilities and contractual obligations inherited by the Government consisted of:

That means out of the over N17.2 billion almost 78% has been settled amounting to over N13.4 billion. The table below gives the breakdown of verified and authenticated domestic arrears. Notwithstanding, the Ministerial Technical Committee is mandated to continuously review and update the database, they are expected to validate all claims prior to inclusion and payment. Despite inclusion in the database and the clearance framework, the Committee also has the mandate to review and revalidate issues that may arise with regards to any individual clams from the contractors or any concerned State MDAs.

The currently verified and authenticated contractual liabilities consist of 89 individual outstanding payment with some as old as 2002 ranging from as low as N48,782.60 to the highest amount of N396,936,208.55. While the Technical Committee from the Ministry of Finance, DPPMB, BEPD and Office of Auditor General would continue the painstaking process of assembling all available records to ensure accuracy and comprehensiveness in the exercise, a clearance framework has been developed to gradually liquidate N3.79 billion verified and authenticated over a period of three years the summary of which is tabulated below. Part of the work of the Technical Committee would include advising Government, through the Commissioner for Finance, on validating and recommending periodic payments of verified/authenticated contractual obligations based on the approved clearance framework (for payments above certain thresholds as may be approved by the Government). The Technical Committee would also be responsible for verifying and authenticating claims previously undocumented before inclusion in the database and review/update of the online published data.


1 Contractual Liabilities Clearance Schedule, January - December, 2020 1,001,498,179.62.


2 Contractual Liabilities Clearance Schedule, January - December, 2021 1,289,974,561.74.


3 Contractual Liabilities Clearance Schedule, January - December, 2022 1,503,792,338.14.


Total 3,795,265,079.50.


Accordingly, out of the sum of N4.15 billion appropriated in the 2020 Approved Estimates (Code 022000700110-22060) for Public Debts, the sum N1.2 billion is specifically for settlement of contractual liabilities. While the schedule provides the minimum clearable threshold, it is hoped that budget performance during the year would be good enough to achieve the budget provision of N1.2 billion.

The earmarked amount of about N1.0 billion consists of all payments below N10 million most of which belong to small contractors and proportional allocations for contractors with multiple arrears to be spread over the three-year plan. Others were sorted and scheduled to be settled in the subsequent two years maximum. Budgetary performance could facilitate a review to clear all the outstanding contractual liabilities in less than the planned period.

Details of all verified and authenticated contractual liabilities are available in the Debt Management Unit of the Ministry of Finance and Economic Planning. The aggregate of this is already provided above amount to about N3.79 Billion. Published hereunder also include some of the elements of all the major outstanding liabilities:.

The phased / gradual liquidation plan serves as the financial plan for clearance of validated stock of arrears based on the total fund available in the State’s current budget year and the budget year to come. The State Government plans to liquidate all the arrears over the period of three (3) years using funds from State’s internally Generated Revenues and Statutory Federal Transfers. On extreme cases, Government may resort to Borrowing from Commercial Banks to settle its arrears (not on the table at the moment).

4. Description of the State’s Policy on Arrears

The State adopts the following measures to clear existing arrears and prevent accumulation of new one:



NOTICE! NOTICE!! NOTICE!!!

1. Contractor creditor whose individual claim is listed in the database is permitted to request a restricted disclosure of the information not to be reported on the online database (namely, the amount of the contractor's claim and other billing data), by filling a confidential form online and attaching supportive evidence of his/her claim. If the State Ministry of Finance confirms the validity of this claim, the restricted disclosure will be provided to the creditor.

2. Any potential contractor creditor whose individual claim is not listed in the database is permitted to communicate this exclusion to the State Ministry of Finance, by filling a confidential form online and attaching supportive evidence of his/her claim. If the State Ministry of Finance confirms the validity of this claim, it shall be added to the internal domestic expenditure arrears database and included as relevant in the online publicly-accessible domestic expenditure arrears database..

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