The Senate Committee on Public Accounts has queried the Federal Mortgage Bank of Nigeria over irregular award of N3 billion contract in four phases.
The Chairman of Senate Committee on Public Accounts, Senator Mathew Urhoghide, hinged the query on the 2018 Auditor General of the Federation’s Report.
The Committee therefore resolved to summon the former Managing Director of the FMBN, Mallam Gimba Yau Kumo, to appear before the panel to explain the rationale behind the irregular award of the contracts in question.
The query read: “Audit observed that a contract was awarded to a contractor in four phases at a total contract sum of N 3,045,391,531.97.
“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 N 118,717,892.72 that resulted from irregular addition of 5% 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 N80, 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 N 644,040,000.00 was also provided in the Bill of Quantities for offshore training and other deliverables in the 3rd and 4th phases of the contract, but there was no evidence of execution, in contravention of Financial Regulations 70.”
But the Managing Director of the FMBN, Ahmed Musa Dangiwa, explained 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 management after an assessment of the contractor’s performance of the contractor’s obligations on the contract , expressed dissatisfaction with the service rendered by the contractor.
“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 N118 million due to wrong addition of WHT to the contract award sum in all the four phases as well as other payment to the contractor.
“A settlement agreement was thereafter entered into by FMBN and Messr Starter-Point LTD on the mode of repayment of all outstanding due to the bank.
‘Payment of the contract sum for phases three and four were made to the contract by the previous management based on the milestone achievement as specified in the contract agreement. Each payment was duly certified by the in-house consultant appointed by the bank for the project Messes Comsoft Limited.
“Based on the contract specifications, the phase three modules were duly completed functional, however, off-shore training was not conducted for this phase.
“The settlement agreement between the bank and the vendor has also taken into consideration the payment made for the off-shore training that was not done by the vendor.
“No final payments were made by the bank on the phase four project.”
Not satisfied with the presentation, the Chairman of the Committee ordered the former Managing Director to appear before the Panel and give further explanation.
He further demanded the details of the contractor who carried out the contract.