Senate Queries FMBN N3bn Contract, Summons ex-MD

The Senate Public Accounts Committee has summoned a former managing director of the Federal Mortgage Bank of Nigeria, Mallam Gimba Kumo, to appear before it to explain the rationale behind the alleged irregular award of N3bn when he was at the helms of affairs of the bank.

The Senate panel, currently scrutinising the 2015-2018 report of the Auditor-General for the Federation, took the decision following a query raised against the FMBN by the AuGF in the document.

The Chairman of SPAC, Senator Matthew Urhoghide, at the last sitting of the panel, said the auditor-general’s report revealed that the contract was awarded in four phases to a single contractor.

The query raised by the AuGF in the report read, “Audit observed that a contract was awarded to a contractor in four phases at a total contract sum of N3,045,391,531.97.

“Audit however observed that the second, third and fourth phases of the contract were above the approval thresholds of the bank.

“It was also observed from the examination of payment documents that the contractor was overpaid in the sum of N118,717,892.72 that resulted from irregular addition of five per cent withholding tax in the bill of quantity on each of the four phases of the contract.

“Audit further observed, from physical inspection of the site that a provision of N 80, 000,000.00 was made and paid for the implementation of ‘Unified Access and Attendance System’ but the device was not working according to specifications.

“A sum of N644,040,000.00 was also provided in the bill of quantities for offshore training and other deliverables in the third and fourth phases of the contract, but there was no evidence of execution, in contravention of Financial Regulations 70.”

Reacting to the AuGF, the Managing Director of FMBN, Mr Ahmed Musa Dangiwa, told the panel that the contract was awarded in 2011 by the previous management.

Dangiwa said, “The contract was awarded by the previous management in 2011 to design, build and implement a Mortgage Banking Business Process Solution workflow and infrastructure with the aim of creating an enterprise software that will integrate all the bank’s processes.

“This (current) management after an assessment of the performance of the contractor’s obligations on the contract expressed dissatisfaction with the service rendered by the contractor.

“The management, thereafter, severally engaged the contractor over all the issues surrounding the project which include amongst others, the issue of overpayment of the sum of N118m due to wrong addition of WHT to the contract award sum in all the four phases as well as other payments to the contractor.

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