Nigerian Ministries, Departments, and Agencies (MDAs) spent over N110 billion on personnel and overhead costs without budgetary appropriation in 2021.

The findings were detailed in an audit report published by the Office of the Auditor General of the Federation in November 2024.

In one issue, the audit flagged the spending of N841 million by 11 MDAs for overhead purposes without any budgetary provision. Such spending violates Section 80(2) of the Nigerian Constitution, which states:

“No monies shall be withdrawn from the Consolidated Revenue Fund of the Federation except to meet expenditure charged upon the fund by this Constitution or authorised by an Appropriation Act, Supplementary Appropriation Act, or an Act passed in pursuance of Section 81 of this Constitution.”

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Per Nigeria’s financial regulations, funds can only be reallocated through virement [item transfer process between financial accounts] approved by the National Assembly. Without this approval, MDAs risk fund diversion and mismanagement.

In another curious instance, the auditor flagged a N9.4 billion expenditure on salaries and wages by another eight MDAs, without budgetary appropriation. According to the audit, this expenditure contravened Paragraphs 417 and 313 of the Financial Regulations.

The regulation states that funds must be used solely for the purposes they were provided. The regulations also bar agencies from spending beyond approved estimates without National Assembly approval.

The audit report also flagged a separate N92.6 billion that was spent on employee benefits without appropriation. The expenditure also violated Section 80(2) of the Nigerian constitution and Paragraph 301 of the Financial Regulations, which states:

“No expenditure may be incurred by any officer on any service, whether or not included in the Estimates, until he has received authority to do so.”

The National Pension Commission accounted for N56 billion out of the N92 billion extra-budgetary spending on employee benefits.

Similarly, the Public Complaints Commission was flagged for spending N7.5 billion on salaries and wages without appropriation. The treasury could not provide any immediate explanation for any of these cases. According to the audit report, the treasury promised to consult the agencies involved or look into the matter as quickly as possible.

Typically, MDAs present their budgets for overhead, personnel and capital expenditures to the Federal Government through the National Assembly for scrutiny and approval.

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After appropriation bills become law, the ministries, agencies and departments are mandated to spend according to the amount they have presented.

In cases where additional funding is required — such as personnel costs from a minimum wage increase — a supplementary budget must be submitted and ratified.