Annex 6 Federal Capital Territory Administration Abuja Geographic

Transcription

Slgp
Annex 6
Federal Capital Territory Administration
Abuja Geographic Information Service
Kehinde Ipinmoye
December 2005
Table of Contents
1.0
1.1
2.0
2.1
2.2
2.3
2.4
2.5
2.6
3.0
4.0
4.1
5.0
6.0
7.0
7.1
8.0
INTRODUCTION............................................................................................ 81
Background ................................................................................................ 81
REVENEUE ADMINISTRATION SYSTEM .................................................... 81
Overview .................................................................................................... 81
Review of Statistical Data Collection and Management ............................. 82
Assessment Process.................................................................................. 83
Collection Process...................................................................................... 84
Accounting/Reconciliation/Reporting.......................................................... 84
Strategic and Operational Monitoring & Evaluation.................................... 84
ANALYSIS OF REVENUE COLLECTION ..................................................... 84
PROJECTION OF REVENUES FOR 2006/2007........................................... 86
Overview: ................................................................................................... 86
FINDINGS ...................................................................................................... 88
CONCLUSIONS ............................................................................................. 88
RECOMMENDATIONS .................................................................................. 89
Establishment of Internal Revenue Unit ..................................................... 89
NEXT STEPS ................................................................................................. 89
List of Appendices
Appendix A
Appendix B
Appendix C
Appendix D
List of People Met
Approved Land Application and Transaction Fee
Revenue Administration Strategic Plan Framework
Action Plan and Activity Costing
SLGP Consultants’ Report Number 322
80
Slgp
1.0
INTRODUCTION
This report documents the final consulting inputs for the review of revenue
administration in the Abuja Geographic Information Service (AGIS). The first phase
of this input was carried out in July 2005 and an interim report was produced.
1.1
Background
The AGIS was carved in 2004 from the Department of Land and Resettlement in the
former Ministry of Federal Capital Territory, and by all intents and purposes was
established as a project-driven entity and was initially designed to last for a period of
9 months. Essentially, the AGIS was to effect the re-certification of lands within the
Federal Capital Territory, then later cover the Area councils. An
Administrator/Director is the overall head of AGIS. The entity consists of two
departments or units:
• Land information system (LIS)-Land Administration.
• Geographic information system (GIS)-Data.
The GIS is the graphic aspect, where all cadastral information such as master Plan,
Land Use Plans, detailed Site Development Plans, engineering infrastructure and all
survey information are captured and stored in digital form. This is the backroom
office that provides technical support services to Land Administration.
The LIS constitutes the land attributes such as records of allocation, (name of
allottees, plot numbers, plot sizes, uses and locations). It also includes record of all
transactions such as Power of Attorney, Deeds of Assignments, Mortgages,
Subleases, Releases, Devolution. It serves as a front office for customer relations,
The AGIS commenced full operation in August 2004 when the first lodgement of
revenue was made to the respective banks. In the past year the most significant
contribution to revenue has been land re-certification where over 40,000 applications
have been processed. This accounted for more than 60% of revenue in 2004/2005.
Accumulated ground rent fees have also contributed significantly to the growth in
revenue collection in the past 12 months.
It is worthy of note that at start-up of the entity, there was no stated guidelines to be
followed by the administration its operations. Hence most activities were carried out
on ad-hoc basis especially in the revenue administration section. This design was
also meant to remove unnecessary bottlenecks.
2.0
REVENEUE ADMINISTRATION SYSTEM
2.1
Overview
Along with the re-certification exercise, the AGIS performs the following functions:
• Allotment of land
• Registration of power of attorney
• Deed of assignment
• Certificate of release of mortgage
• Land searches
• Processing of new applications
• Resettlement of displaced people
• Sale of cadastral maps
81
Slgp
In addition to the above mentioned revenue streams, AGIS derives revenue from
penalty charges on ground rent, and premium fees for choice land allocated within
the four phases.
The following were identified as sources of Revenue accruable to AGIS:
• Re-certification of Land Fees: The fees paid for the issuance of new
Certificate of Occupancy (C of O) by owners of the land.
• Fees for registration of Land Documents: The fees paid for registration of
land related documents e.g. Power of Attorney/Mortgage.
• Premium on Land: Fees paid to the Government upon allocation of a new
plot.
• Ground rent charges: Annual charges (approved rate) paid to the government
by the owner of the already certified owner in possessions of C of O for the
use of the land. It is subject to periodic revision within the term of the lease.
• Consent Fees: These are charges paid on a deed of agreement for any
transfer of property on land that requires government consent.
• Search Fees: The charges paid to the Land registry to enable the
documents/records concerning a plot of land to be sorted out and obtained.
• Penalty on default Fees on Ground Rent: The fees paid by defaulters on
Ground rent.
• Sale of cadastral maps: Revenue received from the sales of cadastral map.
• Sale of application forms: The charges paid on new application for land.
2.2
Review of Statistical Data Collection and Management
Basically, the Service produces monthly reports on revenue for the Minister’s office.
The total number of plots already recertified was put at 20,222. Data was collected in
AGIS based on patronage and transactions made. The following data/information
which could have been sourced from AGIS was not available:
• The Number of houses recertified per district.
• Actual number of plots recertified in 2004 and 2005 respectively.
• The Usage of the building e.g. residential, commercial, Shops/supermarket,
Quarrying, Recreational etc.
• Actual Revenue received on Ground rents for the year, and arrears on
Ground rent paid.
• Break down/segregation of the Revenue received into components
Heads/Sub heads as appropriate.
• Also, basic information on transactions like Penalty on default fees on ground
rent, Sale of cadastral map and new application fees were not provided.
The following data could not be obtained from the related Land agencies.
• Total number of plots already built up.
• Total number of empty plots, i.e. yet to be developed.
A major constraint identified in determining the above data was the issue of double
allocation.
82
Slgp
2.3
Assessment Process
The initial assessment of fees payable per Revenue source was set by the
Ministerial Task Force that worked out the modalities for the setting up of AGIS.
Subsequent rates were to be reviewed annually or biannually as approved by the
Hon. Minister. The approved Land Application and Transaction Fees taking effect
from 1st August 2004 was published in the Re-Certification and Re-Issuance of
Certificate of Occupancy bulletin from the Ministry of The Federal Capital Territory.
Apart from the recertification fees which commands a fixed rate, other charges varies
depending on the location, size of the plot and the type of structure built on the land.
Hence, the amount of money being paid differs with each applicant situation and
circumstances. For example, it might involve paying up the arrears on ground rent for
the past 10 years along with other fees and charges.
Upon confirming fees payable by the Land Administration department, customers are
directed to the banks to make cash payments. Deposit slips in triplicate are placed in
the banking halls. One copy goes to the bank while the second and third copy are
kept by the customer and sent to AGIS when weekly reports are made.
The approved payable rate was as found in Table 1. The Re-certification exercise
appears to be the highest rate while the rest were billed per meter square.
Table 1:
S/No
Payable Rates per Revenue Source(s)
Revenue Sources
(Fees)
1
Recertification
exercise
2
3
Registration of Land
documents
Premium on land
4
Ground rent
5
Consent fees
6
Search fees
7
8
Penalty on default
fees on Ground rent
Sale of Cadastral map
9
New Application fees
Rates(N)
Lowest
Highest
*10,000
Amount
payable
/ plot
**110,000
51,000
2,000
*10,000
**80,000
*5,000
**10,000
5,000
*21,000
**51,000
Comments
* Normal charges while
** extension of exercise
+ penalty.
e.g. power of attorney
fee, mortgage e.t.c.
Measured in per square
Metre.
Measured in Square
Metre. *as applicable in
Wuse and ** as to Petrol
filling stations.
Only assessed upon
inspection
of
the
building.
* is for private while ** is
for commercial buildings.
30% 0f the Ground rent
charges
Varying depending on
type and size
* is for commercial while
** is for private buildings.
Source; Corporate Affairs Manager, AGIS (Dec. 2005)
83
Slgp
2.4
Collection Process
The following banks were designated as collecting points for the AGIS revenue:
• Universal Trust Bank
• Standard Trust Bank
• Inland Bank
• Wema Bank
• United Bank for Africa
• Intercity Bank
• Habib Bank
All transaction payments were made directly to the bank designated for collection of
fees and charges after all the applicable fees and processing had been effected.
Statements of accounts were collected at the end of the month.
However, there was no Head / subhead inputted to the teller being used to pay the
money to the bank, hence all payments were lumped together into the account.
Thus, segregation of the revenue was not and could not be done.
2.5
Accounting/Reconciliation/Reporting
Reconciliation of the account was not done statutorily, but the accounts were
accessed directly on-line as the banks being used operate e-banking services. The
bank accounts were not withdrawing accounts, but operates as a deposit account
only. It has no cheque.
The FCT Cash Management Committee chaired by the Hon. Minister was held
monthly where the total amount paid to the account of AGIS was reported. It was
then subsequently transferred to the FCT central account by bank draft. No other
entity gets the AGIS Bank accounts details.
However, the only document made available for this input was not adequate in terms
of provision of background information support/data. This did not reflect the degree
of computerisation and automation of the establishment.
2.6
Strategic and Operational Monitoring & Evaluation
The project was set up to pragmatically solve the problem of certificate of Occupancy
issuance in the FCTA. Since no target was set for the project, the strategic and
operational monitoring and evaluation of the project was not done, hence, the
measurement of achievements against the set target to obtain performance ratio was
not achieved.
Apart from the adverts placed in the media on the recertification exercise, there was
no formal or direct instrument for the enforcement of revenue collection in AGIS. It
was stated that the enforcement will come into reality at the expiration of the whole
exercise.
3.0
ANALYSIS OF REVENUE COLLECTION
Revenue collection during the 2002 and 2003 fiscal years was under FCDA and
table 2 below shows the total revenue collection for the Department of Land in the
FCDA. The trend of revenue indicates that the highest revenue was obtained in 2004
which could be due to the coming on stream of AGIS.
84
Slgp
Table 2:
Revenue Collection from Department of Land (MFCT) 2002-2004
S/N Month
2002
Budgeted
1
2
3
4
5
6
7
8
9
10
11
12
2003
Actual
Budgeted
2004
Actual
Budgeted
Actual
January
56,201,386
53,018,047
February
55,157,060
46,686,791
77,253,836
March
44,536,265
34,419,287
131,038,891
April
24,769,253
96,925,303
60,929,905
May
40,182,303
83,581,138
73,495,999
June
32,184,708
41,008,806
151,067,480
July
65,967,467
50,524,376
109,077,695
August
48,142,677
58,717,875
144,205,657
41,688,614
145,575,993
20,631,483
11,872,310
October
77,670,810
25,154,643
77,996,872
November
68,502,780
15,173,511
61,023,684
December
34,714,197
21,849,548
206,342,821
TOTAL
704,180,097
Source: Department of Lands (MFCT)
633,178,590
1,049,930,784
September
The disaggregating of this revenue was not done, and the budgeted revenues were
not provided. The aggregate revenue from AGIS is as stated in Table 3. The trend
shows that the highest amount of revenue (N702m) was recorded in April 2005 while
the least amount (N70m) was realised at the commencement of the exercise in
September 2004. In all, a total of about N4 billion had been realised as revenue from
AGIS. The information provided in Table 3 would not allow for the composite values
of revenue heads to be dis-aggregated. It could however be assumed that the major
source of the revenue was from the re-certification fees.
Table 3:
Revenue from August 2004 to November 2005
Month
Year
2004
1
2
3
4
5
6
7
8
9
10
11
12
January
February
March
April
May
June
July
August
September
October
November
December
Total
70,000,000.00
200,000,000.00
160,000,000.00
173,335,607.74
603,335,607.74
2005
120,000,000.00
400,000,000.00
515,197,243.27
702,884,141.30
321,705,882.49
238,078,635.54
413,626,528.28
412,085,619.32
361,243,306.89
3,484,821,357.07
Source: AGIS, Abuja
85
Slgp
4.0
PROJECTION OF REVENUES FOR 2006/2007
4.1
Overview:
Projections of Revenue were prepared based on the limited information received
from AGIS. Appendix C shows the approved Land application and transaction fees
for AGIS. The consultant met the Director of AGIS and the Corporate Affairs
Manager respectively on the likely projections for 2006, 2007 and 2008. The
feedback was that projections of revenue collection might not be possible which was
attributed to the nature of transactions.
In arriving at the revenue projections produced in Table 4, the consultant took the
following into consideration:
• The minimum plot size in FCT was 750 m3.
• Already, 22,222 plots had been Re-certified.
• The grand total number of plots available in FCT as of Dec. 2005 is 47,250.
• Since most activities in AGIS are transactional, values were apportioned to
the Revenue sources as the case may be.
• Marginal increase of 10% on revenue sources/annum with enforcement.
Table 4:
Revenue Projection by Sources
S/No Revenue
Source
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Recertification
exercise
Registration
of Land
documents
Premium
on Land
Ground rent
Consent
fees
Search fees
Penalty on
default fees
on ground
rent
Sale of
cadastral
map
New
application
fees
Others
Average Estimated
Rate(N)
2006
110,000
10,000
1,100,000,000
51,000
10,000
510,000,000
15,000
15,000
225,000,000
7,500
4,500
10,000
5,000
750,000,000
22,500,000
5,000
5,000
25,000,000
21,000*
5,000
105,000,000
51,000**
5,000
255,000,000
TOTAL
3,335,000,000
2007
10 % of
2006
2008
10 % of
2007
3,668,500,000
4,035,350,000
* Commercial Rate
** Residential Rate
86
Slgp
Revenue projections made by the FCDA when the AGIS was administered by FCDA
is produced below in Table 5. In Table 5 under land (sub-head 402), 2005 estimated
is N4.4 billion which is like to be achieved by the end of the current fiscal year. As at
end of third quarter of 2005, AGIS has booked N3.3 billion revenue collection. And it
is expected that if the trend continues, the FCDA estimate of N4.4 billion might be
surpassed.
If all things are equal, it is expected that AGIS should be able to achieve revenue of
N4.614 billion for the fiscal year 2006. The projection is a marginal increase from
N4.4 billion for 2005 but the fact is that the recertification may have passed its peak
and therefore revenue generation would have to depend on efficiency of
administration and effective of enforcement in the coming years.
To sustain the improvement in revenue collection in future, a set of strategy would
have to be put in place in order to achieve N5 billion in 2008 fiscal year.
Table 5:
Head
Internal Revenue Forecasts 2005-2009
Description
401
Taxes
402
Land
403
Licences
404
2005
2006
2007
2008
2009
30,000,000
31,604,419
33,208,838
34,813,257
36,417,675
4,379,800,000
4,614,034,457
4,848,268,913
5,082,503,371
5,316,737,827
15,500,000
16,328,950
17,157,899
17,986,849
18,815,800
Sales
2,850,000
3,002,420
3,154,840
3,307,259
3,459,679
405
Rent
61,465,000
64,752,187
68,039,374
71,326,560
74,613,747
406
Interest
26,565,000
27,985,713
29,406,426
30,827,139
32,247,852
407
FGN
3,820,000
4,024,295
4,229,047
4,432,888
4,637,184
408
Sales
4,520,000,000
4,761,732,441
5,003,464,882
5,245,197,323
5,486,929,764
409
Actuation
TOTAL
17,009,145,848
21,655,690,475
26,306,235,102
30,948,779,729
35,595,324,356
21,529,145,848
26,317,422,916
31,305,699,984
36,193,977,052
41,082,254,120
Source: FCDA Revenue Division, Abuja
The Re-Certification exercise is expected to continue in 2006 to 2008. Already,
22,222 plots had been re-certified. It was assumed that 10,000 plots would be recertificated annually.
It was assumed that at least 15,000 of the 22,222 re-certified will pay up the annual
Ground Rent fee. The average ground rent fee for FCT was estimated to be about
N15, 000/plot.
The fee for the penalty charges on Ground Rent was put at an Average of
N4,500/plot. It was assumed that 5,000 plots would be liable to pay this charge. The
new application fee will attract on the average of 5,000 applicants per Residential
and Commercial usage respectively.
87
Slgp
5.0
FINDINGS
On the macro level, AGIS is project-like organisation with a make-shift operating
system. Consequently, the finance and accounting function does not
comprehensively capture revenue administration performance data. The revenue
collections are lumped together without stating, which are collections from current
transactions and from arrears. More importantly, there is no evidence that the
finance and accounting function does carry out an effective reconciliation of cash
receipts in the bank and cash book.
On the micro level, AGIS is business entity that is driven by service delivery cum
revenue collection, yet it has poorly structured revenue administration system and its
performance criteria are not clearly defined.
In its present organisational
arrangement, the revenue administration system is poorly delineated within the AGIS
business model. In addition, the basic functions of revenue administration is
relatively fragmented making it difficult for a AGIS to produce a standard revenue
administration outputs such as, monthly revenue performance report, comparing
actual collection against budgeted collections. Although it was claimed that a
monthly revenue statement is provided to the FCTA cash management committee,
none was made available in the course of this assignment and AGIS could not make
returns to the FCTA revenue working group in November/December 2005.
An effective revenue administration is anchored on robust database. However, in
spite of AGIS enormous potential for data generation to support its transaction
related revenue collection, inadequate database remain one of its operating
debilities. Given the level of information technology deployed in AGIS, solid revenue
database is remain weak, consequently, AGIS is not in a strong position to make a
realistic projections of its future revenue stream.
Enforcement function in the AGIS is problematic. The best revenue administration
system without an effective enforcement mechanism is not likely to achieve its
performance targets. This is true with AGIS, under clearly defined performance
criteria, AGIS efforts are limited by poor enforcement capacity condition.
In summary, given inadequate critical outputs, performance documentation and
financial reporting, in revenue administration process, the revenue administration
function in AGIS might be perceived as lacking in total transparency and
accountability.
6.0
CONCLUSIONS
On the micro level, virtually all organizations are either of marketing-, engineering-,
manufacturing-, or service-driven. But on the macro level, organizations are either
project or non-project-driven. In a project-driven organization, such as AGIS, all
activities are characterized as ad-hoc tasks. However, AGIS in its present business
model does not seem to have a defined life cycle, yet business must be generated
on self-perpetuating basis. AGIS has business culture in which the employees do
not really manifest total loyalty to it, they were employed by another entity and their
salaries are paid through third party.
88
Slgp
Until AGIS is transformed into full fledged conventional business entity with a
streamlined revenue administration system, transparency and accountability in
revenue administration might not be enhanced.
7.0
RECOMMENDATIONS
It is becoming apparent that AGIS cannot continue to operate like project-driven and
ad-hoc oriented entity much longer given increasing demand for its services.
Despite the fact that the enabling law for the establishment of AGIS is yet to be
enacted, AGIS revenue administration function would need to be transformed into
standard operating division with basic processes delineated and with effective
administration and financial controls.
7.1
Establishment of Internal Revenue Unit
Broad Objective
It is envisaged that the proposed Internal Revenue Unit would:
• provide effective leadership within the Agency for improved internal revenue
generation;
• support professional departments in their primary roles of collecting,
cataloguing and managing baseline data on the structure of the sector;
• support the professional departments in carrying out revenue assessment,
collection and accounting;
• provide overall coordination of internal revenue administration within the
Agency and report to the FCTA Revenue Administration Committee.
Institutional Structure of IRU
The IRU is expected to deploy minimum information technology to achieve high
productivity in its operations.
• To be located within the Agency a stand alone UNIT responsible to the
Executive Director;
• Staffed by officers permanently redeployed to the Agency;
Basic Functions
• It will be primarily responsible for supervision and coordination of all internal
revenue activities of the Agency from preparation of revenue budgeting,
assessment, collection, and accounting and reporting.
• The Unit will be responsible for processing and managing revenue data and
information system of the Agency in close cooperation with all departments;
• It would work with the Finance Department to produce monthly revenue
statement, undertake monthly revenue bank reconciliation.
8.0
NEXT STEPS
The most critical next step is for AGIS management to embark on the establishment
of internal revenue administration division with the following sub-units:
• Research, Statistics & Planning
• Assessment & Billing
• Collection & Reporting
• Enforcement
Finance and Accounting Unit should carry the basic book keeping of the revenue
collection and undertake bank reconciliation. However, the immediate next steps
should include the following:
89
Slgp
1. AGIS should take the step to organize its 2005 revenue administration
performance into newly adopted revenue reporting template with full
disaggregation of sources of collection;
2. Prepare 2006 revenue budget using the standard revenue classification
structure;
3. Prepare revenue projection for 2007, 2008 fiscal year;
4. Embark of accelerated staff training on basic process in revenue
administration in order to improve capacity condition
90
Slgp
Appendix A
List of People Met
S/No
Name
Department
Position
1.
Mallam Magaji Galadima
AGIS
Secretary / Corporate
Manager
2.
Mr. Salami S.
AGIS
Internal Auditor / Ag.
Accountant
3.
Mr. Hafeez Azeez
Public
Partnership
Private
4.
Mr. Musa Ibrahim
Public
Partnership
Private
5.
Mr. Bisala Caleb
Development Control
Logistic Officer
6.
Dr.Ismael Iro
AGIS
Project Manager
7.
Mrs. Altine Jibrin
AGIS
Director / Administrator
8.
Mr. Ahmed Jimba
AGIS
Senior
Officer
9.
Surveyor. J.J. Sambo
Surveying & Mapping Director
Dept. FCDA
10.
Surveyor Barde Jatau
Urban Survey, FCDA
Technical
Deputy Director
91
Slgp
Appendix B
Approved Land Application and Transaction Fees
S/No Subject
Approved Rates (N)
Residential
Commercial
1.
Land App. Processing Fee
50,000
20,000
2.
App. and Processing Fee for
consent to Assign
10,000
10,000
3.
App. and Processing Fee for
consent to Mortgage
10,000
11,000
4.
Search Fee
5,000
10,000
5.
Deed of Release (Stamping and
Registration)
20,000
20,000
6.
Power
of
Attorney
(for
administration of wills & estates)
50,000
50,000
7.
Quarry Lease
Registration)
100,000
200,000
8.
***Ground Rents (m3) / annum
Highest
35
80
Lowest
10
10
(Stamping
&
Source: AGIS Re-Certification and Re-Issuance of Certificates of Occupancy, the Ministry of
the Federal Capital Territory.
92
Slgp
Appendix C
Stage
Research,
Statistics &
Planning
Revenue
Administration
Unit
Strategy 2006
Establish a RSP Unit to collect statistical
data to compute revenue base and
estimates of potential collection of
revenue.
Set up a Revenue Administration Unit
Carry out detailed training needs analysis
of revenue administration unit staff.
Assessment &
Collections
Carry out accelerated staff training in
assessment and collection
Accounting &
Reporting
Carry out accelerated staff training in
revenue account, reconciliation and
reporting.
Produce monthly revenue returns by
sources and sub-divided into arrears and
current assessment.
Set up MIS Unit
Monitoring,
Inspection &
Supervision
Provide logistic support for field work.
SLGP Consultant’s Report Number 322
Strategy 2007
Carry out a medium term projection of
transaction from all categories of
functions and project revenue
collections.
Carry out specialised training of staff
on assessment/billing,
collection/accounting/reporting and
field reconnaissance/enforcement.
Strategy 2008
Further specialized staff training.
Produce annual and quarterly
projection of revenue collections.
Prepare monthly management
accounts showing revenue collection
and cost of operation.
Build up capacity for effective
enforcement.
Carry out field reconnaissance and
enforcement work.
Further build up capacity for effective
enforcement.
Carry out field reconnaissance and
enforcement work.
93
Slgp
Annex D
Action Plan & Activity Costing
Objectives Æ
•
•
•
Improved efficiency and effectiveness in revenue administration
Improved revenue assessment and collection of revenue
Improved service delivery
Short-term Strategies (2006)
Activities
Responsibilities
Capacity Building
Accelerated Staff Training
Specialized Staff Training
Establishment of RAU1
Provision of Logics
FCTA
FCTA
FCTA
FCTA
Costs & Sources of Financing
Local
Institution Development
TOTAL
External
Total
10,000,000
10,000,000
5,000,000
6,000,000
31,000,000
31,000,000
Medium-term Strategies
(2007/8)
Activities
Responsibilities
Collection of data and develop
a statistical base
Specialized Staff Training
FCTA
7,000,000
7,000,000
FCTA
15,000,000
22,000,000
15,000,000
22,000,000
Capacity Building
Local
TOTAL
1
10,000,000
10,000,000
5,000,000
6,000,000
External
Total
RAU: Revenue Administration Unit.
SLGP Consultant’s Report Number 322
94
Slgp
Annex 7
Review of FCT Revenue Administration
FCT Transport Secretariat
By
Leke Fakayode
December 2005
Table of Contents
1.0
1.1
2.0
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
3.0
4.0
5.0
6.0
7.0
8.0
8.1
8.2
8.3
8.4
8.5
8.6
8.7
8.8
INTRODUCTION................................................................................................. 96
Overview ......................................................................................................... 96
REVENUE ADMINISTRATION SYSTEM ........................................................... 97
Revenue Database.......................................................................................... 97
Tariff ................................................................................................................ 98
Assessment Process....................................................................................... 98
Collection Process........................................................................................... 98
Accounting and Reporting ............................................................................... 99
Enforcement .................................................................................................... 99
Strategic and Operational Monitoring ............................................................ 100
Technological support analysis ..................................................................... 100
ANALYSIS OF REVENUE COLLECTIONS 2002-2004.................................... 100
PROJECTION OF REVENUE FOR 2006/7/8 ................................................... 102
ANALYSIS OF EXPENDITURE BY CATEGORIES.......................................... 103
COMPARATIVE ANALYSIS OF REVENUE AND EXPENDITURE .................. 103
STRATEGIES AND ACTION PLAN .................................................................. 104
RECOMMENDATIONS ..................................................................................... 107
Database ....................................................................................................... 107
Tariff .............................................................................................................. 107
Assessment Process..................................................................................... 107
Collection Process......................................................................................... 108
Accounting..................................................................................................... 108
Automation .................................................................................................... 108
Enforcement .................................................................................................. 108
Evaluation and Monitoring............................................................................. 108
List of Appendices
Appendix A
Appendix B
Persons Met
Strategy Costing
95
Slgp
1.0
INTRODUCTION
This report documents the results of the second and final phase of the revenue
administration review of the Transport Secretariat. This report includes findings,
recommendations and action plan for revenue administration performance over the next
three years.
The report is structured as follows. Section 2 provides an overview of revenue
administration processes. Section 3 highlights the historical revenue performance
focusing on a time series analysis of collections. Section 4 contains review of projected
revenues by sources. Analysis of expenditure by categories and comparative analysis of
Revenue and Expenditure is in sections 5 and 6 respectively. Section 7 presents
Strategies and Action Plan.
1.1
Overview
The Transport Secretariat of the FCT Administration consists of Department of
Transportation and Department of Road Traffic Services. While the revenue potentials of
the two departments are large, only the Department of Road Traffic Services (DRTS)
presently produces noticeable income from vehicle registration and licences.
The Department of Transportation is new and has not established necessary
infrastructure to generate revenue. The medium and long term business plans of the
department include:
• Development of rail network to link all Satellite Towns within the FCT.
• Development of transit ways within the FCT.
• Provision and maintenance of traffic control facilities
• Implementation of safe, attractive and efficient integrated rapid mass transit
services in the FCT.
When necessary infrastructure is put in place the Department of Transportation will
generate enormous revenues from
• Parks
• Assignments of bus routes
• Regulation of rail operations
• Partnership with private investors to manage infrastructure
• Rescue mission
• Publication of traffic regulations
• Enforcement of traffic rules
• Penalties from damages to and misuse of infrastructure
• Training and workshops
However, the statutory dependence of the FCT Administration on the National Assembly
for legal support has slowed the efforts at achieving set objectives.
96
Slgp
2.0
REVENUE ADMINISTRATION SYSTEM
The Directorate of Road Traffic Services is the only agency currently generating revenue
for the transport secretariat. The directorate is self accounting and utilises funds
generated for its administration. The involvement of the secretariat in the directorate
revenue management is low. This may be due partly to lack of stable organisation at the
secretariat.
Although the services of the directorate are mostly demand driven, it can achieve greater
results if its services are available more effectively and efficiently. Observations were
made during the review that include.
• Inability of customer’s to obtain prompt service
• Payment of extra unofficial amounts by customers (often over 200 per cent of the
official tariff) in order to get service
• Over concentration of activities on vehicle registration at the headquarters of the
directorate. In other states of the federation vehicle registration is carried out at
the local government level, which is the equivalent of area councils in Federal
Capital Territory. The current situation implies greater costs and longer time for
car owners to get registered in Abuja.
• Low enforcement efforts. Only a tiny fraction of the capital territory is covered by
the operations of the vehicle inspection patrol teams.
• Inability of the directorate to generate adequate materials for vehicle registration
and driver licensing.
• Poor public perception of the directorate’s services
• Conflicting legal mandates between the Federal Road Safety Commission and
the FCT Directorate of Road Traffic Services that has resulted in huge revenue
loss by the FCT administration. The law requires that all penalties resulting from
road traffic offence in the FCT must accrue to the FCT administration but in
practice, collections by FRSC are kept in the commission’s account.
While the revenues of the directorate have been growing as is shown in Table 1, it is
possible to attain much higher revenue levels if the public perception of the directorate’s
service delivery is positive and accessibility to its services becomes easier.
2.1
Revenue Database
The activities of the Directorate of Road Traffic Services are demand driven and
dependent on factors beyond the control of the directorate. The core function of vehicle
registration largely depends on economic factors and specific government policies. It is
therefore difficult to construct accurate database to guide future planning on revenues.
However, historical statistics on actual number of new registration and yearly renewal of
licences can provide a pattern that would aid projections.
97
Slgp
The consultants assisted the commercial unit of the directorate to develop a basis for
accumulating data on the number of registration and renewal of licenses. At the
conclusion of the review statistics were generated on actual number of vehicles
registered and licences renewed in 2002, 2003 and 2004. However, compilation of data
on other activities of the directorate including Inspection of vehicles for road worthiness,
VIO Inspection, Drivers Testing, Change of Vehicle Ownership, and Issuance of Drivers
Licence were still ongoing as at the end of this review. The management of the
directorate has been advised to complete the data compilation and forward the result to
the transport secretariat from where copies can be obtained.
2.2
Tariff
Rates are fixed nationally by the Joint Tax Board (JTB). The procedures do not involve
input by the FCT Directorate of Road Traffic Services.
Current rates appear grossly inadequate and have not been reviewed since January
2003. The Directorate in conjunction with other state agencies have made submission to
the government for revision of rates which has not been approved.
2.3
Assessment Process
In all cases, tested revenues were correctly assessed in line with published rates.
However, interaction with a section of customers revealed that in most instances the
officials of the directorate levied extra unofficial amounts above the published rates.
There were complaints that services were withheld if customers fail to pay the unofficial
levies under the excuse of lack of materials.
Another major weakness noted during the review is that valuation of penalties is not
transparent. Whereas, there are over 150 offence categories only one account is kept for
them for revenue purpose. Unlike other revenue sources, the recommended rates for
penalties arising from traffic offence are strictly complied with. In many cases the official
tariff was used as a basis for informal negotiation with traffic offenders. There are no
separate registers to show billings and collections on penalties by source.
The review also noted that all the assessment procedures are done manually. With little
involvement of the internal audit unit in the assessment process the possibility of errors
in service valuation is high. It was noted though that the head of finance and accounts
departments personally endorses all billing documents.
2.4
Collection Process
The major flaw in the current collection process is the concentration of all registration
procedures at the headquarters. The countrywide practice allows registration of vehicles
at the local government level which is the equivalent of area councils in the Federal
Capital Territory. The current practice will certainly discourage customers not least those
residing on the outskirt of the capital territory who may find it more convenient to register
vehicles in neighbouring states of Nassarrawa and Niger. In fact the Nassarrawa State
Board of Internal Revenue has strategically located a licensing office in Karu to attract
customers from Nyanya and Asokoro districts of the capital territory.
98
Slgp
Although the area offices of the directorate are allowed to renew licences and make
collections from vehicle inspection, traffic offences and road worthiness, there is still
problem with management of receipts. The review noted that all cash collections by area
offices are brought to the headquarters for lodgement into the directorate’s account. This
has resulted in delays between collection at area offices and lodgement.
Collections at the headquarters are paid directly by customers to the directorate’s
bankers stationed inside the premises. Collections on bills are effected instantly and are
witnessed by adequate documentations.
2.5
Accounting and Reporting
The Directorate relies on the accounting procedures inherited from the FCDA which are
grossly inadequate for its current level of activities. The main accounting focus should be
to maintain distinct financial records for every revenue source.
The current accounting systems do not provide for revenue control accounts. It is
therefore not possible to have internal independent confirmation of the correctness of the
daybooks.
All accounting procedures are effected manually. This will cause delay and impair the
integrity of records.
The finance and accounts department merely prepares a summary of revenue
generation on a monthly and quarterly basis. There is no comprehensive income
statement in the conventional style.
The consultants guided the accounting officials of the directorate on the implementation
of the new revenue coding for the Federal Capital Territory.
2.6
Enforcement
The revenue size of the directorate will necessarily be affected by the level of its
enforcement activities. At present the enforcement activities are low. The enforcement
unit of the directorate is rather small relative to the requirement of the Federal Capital
Territory.
The Directorate operates 26 enforcement units called traffic patrol teams. This covers
less than 10 percent of the Federal Capital Territory. The management believes that the
Directorate requires about 200 enforcement units for maximum efficiency.
The management also complained about lack of necessary tools and equipment. The
following submissions were made:
• That the Directorate maintains only 15 functional patrol vehicles whereas
management requirement estimate is 200 vehicles.
• That the Directorate owns only two recovery/salvage call-up tools whereas
management requirement estimate is 50.
• That the Directorate has only 20 tyre clamps in stock whereas management
requirement estimate is 2,000.
99
Slgp
•
•
That the Directorate’s base station for communication has coverage capacity to
reach only 30 percent of the Federal Capital Territory.
That the Directorate has only 30 radio handsets whereas management
requirement estimate is 300.
While acquisition of the listed tools and equipment may truly lead to wider coverage of
enforcement activities, the current environment of the directorate must first be reformed
to ensure that penalties from traffic offences are fully accounted for. The directorate’s
records showed collections from just about five of the over 150 published traffic offences
in two years. It is true that drivers are becoming more educated and careful, but there
are fears that only a tiny percentage of penalties paid by offenders are reported.
2.7
Strategic and Operational Monitoring
The existing structure puts revenue activities together with payments and accounting
functions in the same department. The head of the department supervises six units and
is also directly responsible for revenue costing.
The Directorate does not have operations manual to guide staff and to facilitate training.
Staff training has not been given priority as many staff interviewed has not been given
training opportunities in last 18 months.
The involvement of the internal audit in ensuring integrity of revenue procedures is too
little. There is no internal arrangement to independently confirm submissions on revenue
by finance and account department. The statistics maintained by the Central Motor
Registry (CMR) are not valued to provide basis of comparison with the records of the
finance department.
2.8
Technological support analysis
The review noticed heavy inadequacy in application of technology. The following
observations were made:
• All operational processes are manually effected
• All revenue processes are manually effected
• All accounting processes are manually effected
3.0
ANALYSIS OF REVENUE COLLECTIONS 2002-2004
Over the three years between 2002 and 2004 the FCT Directorate of Road Traffic
Services has seen consistent rise in revenue collection. From N114million in 2002
revenues jumped by 160 percent to N292million in 2004. The directorate has also
surpassed revenue targets. In 2004 it exceeded revenue forecast by 20 percent and has
in October 2005 collected over 70 percent of the targets for year. However, it was
observed that revenue forecasts were not made on any scientific basis but as a mere 30
percent growth estimate.
100
Slgp
In 2004 the Directorate generates over 35 percent of its income from vehicle licensing.
This is followed by sale of number plates, drivers’ license, registration and vehicle
inspection which contribute 19 percent, 15 percent, 12 percent and 10 percent
respectively. Other services including road worthiness, change of ownership, drivers’
testing etc. contributes less than 10 percent of the Directorate’s revenue.
Table 1: 3-year Revenue Analysis
Vehicle Registration
Road Worthiness
VIO Inspection
Driver’s Testing
Change of Ownership
VIO Operations
Vehicle Licence
Drivers License
Number Plates
Fire Service
Contract fees
Total
2002
Actual
N’000
12,395
256
2,845
340
534
19,506
22,848
20,282
34,667
113,673
2003
Actual
N’000
22,646
8,352
1,388
1,276
1,343
28,870
91,183
74,275
50,917
280,249
2004
Budget
Actual
N’000
N’000
23,000
34,745
9,000
14,989
1,500
2,667
1,200
774
1,200
2,447
30,000
31,064
88,000 103,764
44,000
45,232
54,000
56,333
451
15
251,900 292,481
Variance
N’000
11,745
5,989
1,167
(426)
1,248
1,064
15,764
1,231
2,333
451
15
40,581
Source: Finance and Accounts Department of the FCT Directorate of Road Traffic Services
However, examination of available statistics on operations in Table 2 revealed that
number of vehicles registered in 2003 fell to 77 percent of the 2002 figure and there was
marginal 2 percent increase in 2004 over 2003 level.
101
Slgp
Table 2: Summary of vehicle registration and renewal
Private
Vehicles
Commercial
vehicles
Official
vehicles
Motor
cycles
Total
2002
Registration
Renewal
40,488
12,600
3,460
9,600
182
-
5,361
1,800
49,491
24,000
2003
Registration
Renewal
28,634
13,400
2,713
8,900
105
-
7,071
2,100
38,523
24,400
Registration
Renewal
31,428
52,000
2,474
24,000
-
5,405
6,000
39,307
82,000
2004
The review found that the increase in revenue in 2003 and 2004 was due mainly to
increase in tariff in January 2003 and not a result of operational efficiency.
4.0
PROJECTION OF REVENUE FOR 2006/7/8
Revenue projections by the Directorate have not been based on credible statistical
basis. Estimates do not include considerations for government policies on vehicle
importation, conditions of local auto-assembly plants, increase in population of FCT, and
the ongoing reorganisation of FCT structure that has been forcing many residents to
seek relocation to neighbouring Niger and Nassarrawa States.
Also, the peculiarities of the income categories are not considered in budget plans. In
fact, all estimates are prepared on a uniform assumption of 30 percent annual revenue
increase. There is no coherent explanation of the 30 percent factor.
Perhaps the greatest flaw of the revenue forecast procedures is that it does not include
quantities. As can be seen from Table 2, the number of vehicle registration dropped by
23 per cent in 2003 and rose insignificantly by 2 per cent in 2004.
Table 3: Projection of Revenue for 2006/7/8
Revenue Source
General Motor Registration
Road Worthiness Certificate
VIO Inspection
Driver’s Testing
Change of Ownership
VIO Operations
Vehicle Licence
ENDL/Learner’s Permit
NNPNIS
Total
2006
N
58,672,900
25,312,430
4,503,200
1,306,500
4,132,700
52,457,600
175,317,870
76,381,500
95,915,300
494,000,000
2007
N
76,274,770
32,906,159
5,854,160
1,698,450
5,372,510
68,194,850
227,913,231
99,295,950
124,689,890
642,199,970
2008
N
99,157,201
42,778,007
7,610,408
2,207,985
6,984,263
88,653,305
296,287,200
129,084,735
162,096,857
834,859,961
102
Slgp
The projections in Table 3 of revenue expectations between 2006 and 2007 have
followed the past practice of 30 per cent assumed annual revenue growth. Based on
past experience it can be concluded actual collections will be higher than the projections
in Table 3.
5.0
ANALYSIS OF EXPENDITURE BY CATEGORIES
The directorate’s expenditure profile contained in Table 4 showed that the bulk of the
resources go into personnel and overhead costs.
Table 4: Analysis of expenditure by categories-Directorate of Road Traffic
Services
Unit
2002
N000
38,405
81,377
47,609
167,391
Personnel
Overhead
Capital
Total
2003
N000
124,659
142,160
21,127
287,946
2004
N000
112,344
46,851
51,410
210,605
The fire service department which accounts for about 40 per cent of the directorate’s
personnel and overhead expenditure has been removed from the directorate’s
administration. The impact of this on the future expenditure structure of the directorate
will be reduced if the plan expansion of activities is implemented.
6.0
COMPARATIVE
EXPENDITURE
ANALYSIS
OF
REVENUE
AND
Comparative analysis of revenue and expenditure of the Directorate for three years to
December 2004 is highlighted in Table 5.
The revenue size of the Directorate has climbed from N114million in 2002 to about
N300million at the end of 2004 while total expenditure rose from N167million to about
N210million for the respective years. As Table 5 shows, the Directorate during the first
year of operation was able to generate 68 percent of its total expenditure including
capital costs.
Table 5: Comparative Analysis of Revenue and Expenditure
Description
Total IGR (N)
Personnel Cost (N)
Recurrent Cost (N)
Capital Cost (N)
Total Expenditure (N)
Personnel Cost as percentage of total IGR
(%)
Recurrent Cost as percentage of total IGR (%)
Capital Cost as percentage of total IGR (%)
Total IGR as percentage of total expenditure
2002
113,673,310
38,404,800
81,377,409
47,609,038
167,391,247
34
72
42
68
2003
280,249,246
124,658,814
142,159,796
21,127,144
287,945,754
44
51
7
97
2004
292,480,989
112,343,523
46,850,636
51,410,733
210,604,892
38
16
18
139
103
Slgp
By 2004 internally generated revenue exceeded total expenditure by over N80million
which translated to about 140 percent excess. However, this only indicates the high
revenue potentials of the Directorate but not a statement of complete operational
efficiency. The volume of vehicle registration has fallen from 49,491 at inception in 2002
to 39,307 in 2004. In fact, as shown in Table 3, the Directorate registered only 38,523
vehicles in 2003 which translated to 22 percent fall.
The Directorate’s activities on license renewals, on the other hand, saw tremendous
improvement in 2004 with an increase of 242 percent over the 2002 figure. The details of
quantity performance for each vehicle category are highlighted in Table 2.
7.0
STRATEGIES AND ACTION PLAN
The strategies towards enhancing revenue potentials of the FCT TS will include
establishment of central database, increase application of technology in assessment,
installation of necessary equipment to facilitate payment for existing parking facilities,
review of internal controls to promote efficiency in revenue operations, elimination of
extra unofficial payment by customers, accurate reporting and deeper involvement of the
secretariat in monitoring revenue activities of agencies.
The long-term goals should be to ensure that the transport secretariat of the Federal
Capital Territory and its agencies are able to fully exploit all available revenue
opportunities and properly account for all collections.
Working towards these goals, the immediate strategies will be to correct lapses in the
existing revenue procedures, and then move on to exploit fresh revenue opportunities.
The true revenue capacities of the Secretariat and its agencies especially the FCT
Directorate of Road Traffic Services have been blurred by operational inadequacies that
have affected levels of revenue collections over the years. Such inadequacies include:
• Limited information of potential revenue base
• Weak accounting and record keeping systems
• Non-scientific revenue forecasting
• Activities of touts that increases payment made by customers
• Lack of comprehensive operational report on arrests and penalties collected.
• Limited supervision by the secretariat over the activities of the Directorate of
Road Traffic Services.
There are other operational problems which must be addressed in the medium term
such as mandate conflicts between the Federal Road Safety Corps and the FCT
Directorate of Road Traffic Services.
The total dependence of the FCT Directorate of Road Traffic Services on the Federal
Road Safety Corps for number plates and Drivers licences has impaired the revenue
performance of former greatly. At the time of this report unprocessed applications for
number plates and licences translated to about one third of reported collections from
these two sources in 2004.
104
Slgp
Action 1:
Credible Database
Objective: Develop central database to serve operational information needs of the
transport secretariat and its agencies
Action plan
• Ascertain the correct quantities of activities of the Directorate of Road Traffic
Services to generate statistics on vehicle registration, licence renewal, road
worthiness, drivers licence and other services.
• Carry out survey to determine number of vehicles registered for commercial
purposes in the FCT.
• Maintain details of bus routes in the FCT
• Establish a desk at the Secretariat to coordinate data management.
• Designate a senior official of the Secretariat to oversee the database process
• Establish parameters for accepting data and procedures for making
amendments.
• Determine technology requirement to process and preserve data.
Costing
An estimate of N500,000 will cover three sets of computers to be installed at the
secretariat, Directorate of Road Traffic Services and Department of Transportation. The
amount will also cater for movement, survey and stationeries.
Action 2:
Transparent Assessment
Objective: Make all assessments more open especially penalties resulting from traffic
offences.
Action plan
• Redefine bill processes.
• Publish all approved rates
• Enlighten the public to only pay all rates and fines at specified offices and obtain
treasury receipts.
• Automate billing process
Costing
About N5million will be required to establish functional assessment units at the
headquarters and all area offices of the directorate. This will cater for computers and
staff training.
Action 3:
Improve Collections
Objective: Ensure that all dues are collected promptly and completely.
Action plan
• Increase public awareness.
• Ensure payment without stress
• Decentralise registration of vehicles to enable payments at Area councils
105
Slgp
•
•
•
•
•
Direct all zonal offices to lodge takings promptly into designated bank accounts
nearest to their offices
Establish driving school
Construct servicing bay
Install number plate manufacturing plant
Procure licence printing machine
Costing
About N3million (over a three year period) has been suggested by management to
elevate area offices to full vehicle registration centres.
Action 4:
Accurate Accounting
Objective: Improve record keeping and prepare periodical revenue report.
Action plan:
• Maintain distinct records for each revenue source
• Keep billing register
• Link lodgements to billings
• Reconcile billings, collections and lodgements
• Adopt the recommended FCT revenue coding system.
• Prepare monthly revenue report stating the source code and amounts of
collections.
• Automate accounting procedures
Costing:
About N5million naira may be required to automate the accounting procedures including
cost of software.
Action 5:
Effective Enforcement
Objective: Ensure maximum compliance with revenue related laws and policies.
Action plan
• Increase traffic patrol units
• Procure modern monitoring equipment
• Enlarge vehicle inspection activities to cover the entire Federal Capital Territory
• Control the inspection officers to reduce corruption
• Ensure that every arrest is entered in a register
Costing
Enlarge enforcement unit will require more staff, modern traffic monitoring equipment,
salvage vehicles and communication gargets. Cost N5million naira
106
Slgp
Action 6:
Adequate Supervision
Objective: The secretariat to ensure deeper monitoring of the revenue operations of
the agencies.
Action plan
• Establish central revenue monitoring unit at the secretariat
• Analyse monthly revenue report
• Investigate all gaps in revenue report and take corrective
Costing
About N5million will be required to procure computer and train staff at the secretariat and
the Directorate of Road Traffic Services.
8.0
RECOMMENDATIONS
8.1
Database
The transport secretariat should develop a central database to provide information
relating to the activities of its department and agencies. Such data should include
number of vehicles owned by residents of the Federal Capital Territory, statistics on
commercial operating in the city, and other data that will facilitate revenue estimation.
8.2
Tariff
The secretariat should intensify efforts to collaborate with other state licensing agencies
towards presenting common argument for review of rates.
8.3
Assessment Process
There is need for creation of separate unit to handle assessment of services. Billings for
every service category must be recorded in separate invoice register in order to
ascertain bills raised for each income source.
The directorate should also ensure greater control of the field activities of its officials in
order to reduce the incidence of unreported arrest. Campaign should be intensifying to
educate the public to not make any cash payment to VIO inspectors and that all
payments of rates and penalties must be done only at specified offices.
The procedures for assessment in the field when arrests are made must be revised.
Billing documents must be properly controlled.
All approved rates must be published and pasted at strategic position within the
premises of the directorate and customers must be guided to pay only applicable rates.
All billing processes should be automated.
107
Slgp
8.4
Collection Process
The immediate concern should be to enhance revenue collection by the directorate.
Towards this goal vehicle registration must be decentralised and full registration centre
status granted to area offices. Also the directorate must instruct area offices to lodge all
takings promptly at the closest branch of the directorate’s bankers. This will reduce the
gap between collection and lodgement, and also eliminate the risk involve in carrying
cash from area offices to the headquarters.
In the medium term the directorate should work towards installing a number plate
manufacturing plant and licence printing machine. This will correct the present total
dependence of the directorate on Federal Road Safety Corps for operational materials.
8.5
Accounting
The directorate should ensure accurate records on each revenue source. The
accounting reforms should involve distinct records and billing register. The
recommended FCT revenue coding system must be adopted for revenue accounting
and reporting. Monthly reconciliation must be carried out to explain gaps between
billings collections and lodgements.
Also the conventional accounting requirements to cross-check balances on individual
daybooks with revenue control account in the general ledger must be ensured on a
monthly basis.
8.6
Automation
The level of automation of revenue processes is too poor. Most registers and books on
revenue operations are manually kept.
8.7
Enforcement
Greater effort must be made to ensure good compliance with traffic regulations in the
Federal Capital Territory. The directorate must increase patrol unit, and procure
monitoring equipment. Patrol officers must be properly trained and controlled to reduce
corruption.
8.8
Evaluation and Monitoring
The transport secretariat will need to scale up supervision of agencies under its
mandate. A central revenue monitoring unit may be established to oversee evaluation of
revenue processes and performance of the agencies. The functions of the units will
include analysis of monthly revenue report, investigation of all gaps in revenue
performance and prescriptions of corrective measures.
108
Slgp
Appendix A
Persons Met
1
2
3
4
5
6
Name
Samson Ataiyero
M.I Khaleel
Christopher Elomba
Abdulahi Bello
Jimoh Haruna Gabi
Ogundipe Niyi
7
8
9
Falayi Ezekiel
Ajibola Emmanuel
J.H Harisu
Title
Director
Assist. Director
HOD
HOD
Senior Accountant
Senior Traffic
Officer
HOD
HOD
General Manager
10 Engr. C.N. Chigboh
Director
11 Denis Anowai
Accountant
Department
DRTS
DRTS
DRTS
DRTS
DRTS
DRTS
DRTS
DRTS
Abuja Urban Mass Transport
Company
Department of
Transportation
Education Secretariat
109
Slgp
Appendix B
Strategy Costing
Stage
Activities
Responsibilities
Develop central database for
transport secretariat
Compile information relevant to the activities of
the secretariat and its agencies
Department of transportation
Establish organised
assessment unit
Create a separate unit to handle assessment at
the directorate of road traffic services.
Directorate of Road Traffic
Services
3,000,000
Decentralise vehicle
registration operations.
Convert zonal offices to registration centres
Services
10,000,000
Increase traffic patrol units
Comply with recommended
reporting format and schedule
Establish monitoring unit at
the transport secretariat
Total
Procure patrol vehicles, call-up tools, tyre
clamps and 2-way radio handsets.
Secretariat to guide all departments and
agencies to adopt new FCT revenue coding
system and ensure monthly submission of
revenue report
Periodical evaluation of revenue operation and
performance
Costs
Naira
5,000,000
20,000,000
Director of finance and
administration
Director of finance and
administration
5,000,000
43,000,000
110
Slgp
(2007/8)
Activities
Survey to determine revenue
base information.
Data collection, sorting and storage.
Enlarge and refine data on
revenue
Automate billing process
Responsibilities
Naira
Services
10,000,000
Engage IT consultants to design and install
necessary package for automated billing.
Services
Public/Private Sector
Partnership
Establish driving school and servicing bay in
partnership with private sector.
Department of transportation
Enlarge enforcement unit
Recruit more vehicle inspection officers.
Procure modern traffic monitoring equipment
and salvage vehicles.
Automate accounting
procedures
Total
Costs
Enlarge capacity of communication base
station.
Engage IT consultants to design and install
necessary package for automated accounting
system.
15,000,000
5,000,000
10,000,000
15,000,000
55,000,000
111
Slgp
Annex 8
FCT Education Secretariat Final Report
Leke Fakayode
December 2005
Table of Contents
1.0
2.0
2.1
2.2
2.3
2.4
2.5
3.0
4.0
5.0
6.0
7.0
8.0
8.1
8.2
8.3
8.4
8.5
8.6
INTRODUCTION............................................................................................... 113
REVENUE ADMINISTRATION SYSTEM ......................................................... 113
Review of Statistical Data Collection and Management ................................ 115
Accounting/Reconciliation/Reporting............................................................. 116
Strategic and Operational Monitoring & Evaluation....................................... 116
ANALYSIS OF REVENUE COLLECTIONS 2002-2005.................................... 116
PROJECTION OF REVENUE........................................................................... 117
ANALYSIS OF EXPENDITURE BY CATEGORIES.......................................... 118
COMPARATIVE ANALYSIS OF REVENUE AND EXPENDITURE .................. 119
STRATEGIES AND ACTION PLAN .................................................................. 119
RECOMMENDATIONS ..................................................................................... 122
Database ....................................................................................................... 122
Rates ............................................................................................................. 122
Accounting..................................................................................................... 122
Monitoring and Evaluation............................................................................. 123
List of Appendices
Appendix A
Appendix B
Contacts
Activity Schedule
112
Slgp
1.0
INTRODUCTION
The recent reforms in the federal Capital Administration included the reorganisation of
education department into a mandate secretariat. The Education Secretariat naturally
does not possess large capacity for revenue generation and has to depend largely on
central funding.
Opportunities for revenue are restricted to few agencies and institutions under the
supervision of the secretariat. The challenges before the secretariat on revenue
generation have become larger following the government plans to provide meals for
students in the Federal Capital Territory (FCT).
The Major objectives of this review have been to understand the current revenue
administration system and to identify opportunities for revenue improvement. The review
has also concentrated on the expenditure patterns of the Secretariat with a view to
exploring ways of doing more for less.
In the light of the on-going efforts at establishing a central revenue unit for FCT, the
Education Secretariat can facilitate the process by doing internal coordination of the
revenue activities of agencies under its supervision. The secretariat can also be more
involved in the monitoring activities over the disbursements procedures of the agencies.
The review has highlighted gaps in the administration system and demonstrated how a
common data base can assist various agencies to obtain relevant information for
efficient and effective revenue management.
The Secretariat suffers from the general malaise facing public administration in Nigeria;
poor orientation, lack of professionalism, low staff moral, low technological input, poor
planning, non-compliance and policy conflicts.
The Education Secretariat of the Federal Capital Development Authority has
responsibilities for supervision of all educational activities in the Federal Capital
Territory. The major activities of the Secretariat include initiation and implementation of
educational programmes.
2.0
The major revenue sources available to the Education Secretariat and the agencies
managing their collections are:
• School registration fees
Department of Policy Implementation (DPI)
• School accreditation fees
• Sale of guidelines
• Examination fees
Education Resource Centre (ERC)
113
Slgp
The supervisory roles of the secretariat over schools in the Federal Capital Territory are
carried out by the Department of Policy Implementation. This department is new and its
work paradigm is at planning stage. The minister of the Federal Capital Territory only
recently approved the guidelines for operating schools including bases and rates to be
charged for registration of institutions and accreditation of school programmes.
The approved guidelines recognise three categories based on tuition fees charged by
schools. The first category are schools charging below N100,000 per annum. The
second category consists of schools charging between N100,000 and N200,000 per
annum. Schools charging above N200,000 per annum are grouped in the third category.
The guidelines stipulate payment of N40,000 by all schools seeking registration including
both the public and private schools. N15,000 of this is payable on application and
N25,000 comes during pre-accreditation process. The accreditation fees which are
charged according to categories are N50,000, N150,000 and N250,000 respectively, and
payable only once in six years.
The guidelines fail to provide for any charges on inspection of schools. This is a major
flaw because inspection activities to ensure compliance with standards will actually
consume most resources of the secretariat. In fact under the current arrangement
schools are subjected to a bi-annual inspection involving comprehensive report on status
of school facilities and programmes. There is certainly a need to amend the guidelines to
accommodate payment by schools for their inspection. Status certificate should be
issued to inspected schools only after payment of prescribed inspection fees.
Another flaw in the guidelines is the long gap between accreditation renewals. The
decision on 6-year accreditation renewal cycle does not appear to have considered the
evolving universal basic education system. A more practical approach may be a 3-year
renewal period to enable the secretariat review the courses of a school three times
within the nine years of the universal basic programme.
Perhaps the greatest deficiency in the guidelines is in the rates. The registration fee is
uniform for all schools, both private and public regardless of location or orientation of
schools. The total amount of N40,000 payable for registration by all categories is rather
low given the social and economic situation of Abuja. The FCT administration should
consider reviewing the registration and accreditation fees based on the tuition fees
charged by schools and their size. A percentage of annual tuition or the tuition paid by a
number of students could be fixed as amounts payable by schools. The implication of
the current tariff regime is that a school charging N201,000 per student per annum will
pay exactly the same registration and accreditation fees as a school charging
N2,000,000 per student per annum.
114
Slgp
Examination fees also provide a source of revenue for the secretariat through the
Education Resource Centre (ERC). The centre oversees conduct of specified
examinations within the Federal Capital Territory. These include common entrance for
primary schools, promotional examinations for secondary schools and mock
examinations for final senior secondary students. The effective take-off of the Universal
Basic Education System will eliminate both the internal and external common entrance
examinations at the primary school level and result in lower revenue collections from this
source as from 2006.
2.1
The Secretariat does not maintain central database. Information on schools, students’
enrolment and tariffs could not be obtained from the secretariat. Review of the records of
agencies revealed that statistics on education management are not congruent. For
instance, figures obtained on the same subject from different agencies differ. The
secretariat should maintain a central database which all agencies can access for
operational planning. This will also enable the secretariat to prove credibility of
submissions by its various agencies.
2.2
Assessment Process
The operational procedures for school registration, accreditation and inspection are still
being worked out. The ministerial approval for rates was only granted in November 2005
specifying bases and amounts payable to the secretariat by licensed schools in the
Federal Capital Territory.
The finance department of the secretariat has not been properly organised at the
moment. In order to cope with the activities that will result from implementation of the
new policy on school registration, accreditation and inspection, the secretariat must
establish a commercial unit to oversee collections.
The approved tariff must be published and applied correctly in bill processing. Given that
the secretariat does not have accurate data on schools operating in the Federal Capital
Territory, wide publicity must accompany the implementation of the new policy.
Compliance guideline must be produced and made readily available especially as it
affects bases, amounts and time of payments. Specific officers of the secretariat must be
trained and assigned the job of producing bills. A convenient bill distribution process
could involve invitation of schools to collect bills at the secretariat. Another option is to
deliver bills at specific school addresses.
2.3
Collection Process
Procedures must be established to allow schools pay directly into a designated bank
account. Copy bank tellers would be submitted at specified office where treasury receipt
will be issued to evidence collection. All collections must be entered in a proper treasury
register on a daily basis and closed at the end of each month to provide figures for
revenue report.
115
Slgp
2.4
All revenue collections must be recorded as they occur in a revenue register at the
collection office where copy bank tellers are submitted by payers. Copy of all treasury
receipts issued at the collection office must be forwarded to the accounts department as
source document to prepare financial records. A monthly revenue report should be
prepared to highlight details of receipts by categories and in line with the prescribed
revenue codes for the Federal Capital Territory.
All agencies must submit monthly revenue report to the secretariat where a summary
report would be prepared and forwarded to the central revenue office of the Federal
Capital Territory.
2.5
Improved database at the secretariat will provide a clear picture of revenue expectation
of each agency. Monthly revenue report submitted by agencies must be analysed
against expectation and all deviations investigated. Deviations could be caused by not
raising bills when due, non payment by customers and by errors or fraud in accounting.
3.0
ANALYSIS OF REVENUE COLLECTIONS 2002-2005
The guidelines on applicable rates for school registration and accreditation in the
Federal Capital Territory have just been approved by the minister and will become
operational from 2006. Before the guidelines the FCT administration did not control
establishment of schools in the Federal Capital Territory.
The education sector of the FCT administration collected examination fees through the
Education Resource Centre (ERC) amounting to N47million in 2005 from about
N12million in 2002. The increase may be due to the growing population of the capital
territory. However, this source will contribute less revenue to the education secretariat
from 2006 because various examinations at the primary school level have been
eliminated in the new Universal Basic Education Programme.
The FCT College of Education is also supervised by the education secretariat. The
school derives income from tuition fee and other academic activities. Between 2002 and
2005 the school generated average of N26million per annum. The institution utilises any
internally generated revenue to supplement government subvention in running the
college. However, the secretariat has not provided strict supervision over the financial
activities of the college. Student statistics and school tariff are not available at the
secretariat making it difficult to verify revenues declared by the school.
116
Slgp
As highlighted in Table 1, the other agencies under the supervision of the secretariat
(the Universal Basic Education Board and the FCT Secondary Education Board) have
minimal revenue generation capacities. The nil figures shown on the table do not exactly
describe the situation of the agencies as it was uncovered during review that they collect
money from registration of contractors. The secretariat does not have any records of the
internally generated revenue by the two agencies. Notwithstanding that the internally
generated revenues of these agencies are low; the secretariat must show deep interest
in knowing all the sources of income available to its agencies and the exact amounts
collected from various sources.
Table 1: Analysis of Revenue Collections 2002-2005
Unit
Department of policy
implementation
Education Resource Centre
Universal Basic Education
Board
Secondary School Education
Board
FCT College of Education
Total
2002
N000
-
2003
N000
-
2004
N000
-
2005
N000
-
12,128
19,357
22,197
47,116
-
-
-
-
20,404
25,473
28,808
28,062
32,532
44,830
51,005
75,178
Table 1 was compiled from available records which were hurriedly provided by the FCT
Education Secretariat and the listed agencies. The figures may not indicate the true
revenue status.
The agencies under the education secretariat did not prepare revenue projections for the
period reviewed making it impossible to reveal their revenue generations performance
against targets.
4.0
PROJECTION OF REVENUE
The major problem in making revenue forecast for the education secretariat is lack of
credible data. There is no reliable information on the number of schools, student
population and enrolment trends. Revenue activities of agencies are not centrally
coordinated to provide opportunity for global revenue flow. Where for instance agencies
depend on the same data for revenue planning, such data have been generated in
piecemeal and quite independent of each other.
117
Slgp
Revenue expectations from school registration and accreditation (to be managed by the
Department of Policy Implementation) remain the largest sources open to the education
secretariat. The great revenue opportunities in school registration and supervision have
however been diminished by the flaw in the new guidelines which fail to prescribe any
amounts for school inspection. The forecast in Table 2 shows opportunity for
N50.4million at the start of the implementation of the new guidelines on school
registration in 2006, which suddenly drops by over 99 percent to barely N2million in
2007. The reason for the sharp drop is because payment for registration is only once
when schools apply, while accreditation fees are payable once in six years. The major
activity of the secretariat on school inspection which will involve large outflow of
resources twice in a year does not attract any charges in the guidelines. The FCT
administration will certainly need to prescribe amounts to be paid by school owners for
inspection of their facilities by the officials of the secretariat. This remains the only
tangible way to generate revenue for school supervision.
Table 2: Projection of Revenue
Unit
Department of policy implementation
Education Resource Centre
Universal Basic Education Board
Secondary School Education Board
2006
N000
50,400
28,200
35,984
2007
N000
2,520
29,610
41,738
2008
N000
2,646
31,090
45,959
Total
114,584
73,868
79,695
The actual number of schools in the Federal Capital Territory could not be agreed during
the review. Figures ranging between 300 and 600 were suggested by various units of
the education secretariat. The revenue projection of N50.4million in 2006 has been
based on 360 schools which were further grouped into 3 categories at the ratio of 6:3:1
paying N50,000, N150,000 and N250,000 accreditation fees respectively. This is in
addition to a flat N40,000 registration fee payable by every school operating in the
capital territory.
The secretariat needs to ascertain the actual number of schools operating in the capital
territory and identify the categories to which they belong for accreditation purposes. The
result will provide a correct basis to make informed revenue projection.
5.0
ANALYSIS OF EXPENDITURE BY CATEGORIES
Historical data on expenditure incurred by the secretariat was not available during the
review because the FCDA had maintained all the financial records of the secretariat until
the last quarter of 2005. Extracts from the FCDA records are highlighted in Table 3
showing total expenditure of N2.9billion and N3.8billion in 2004 and 2005 respectively.
The next few years may see monumental rise in the cost of running education in the
Federal Capital Territory due to certain liberal government policies toward making
primary and junior secondary education completely free under the new Universal Basic
Education Scheme.
118
Slgp
Table 3: Analysis of expenditure by categories
Unit
Personnel
Overhead
Capital
Total
6.0
COMPARATIVE
EXPENDITURE
2003
N000
-
2004
N000
854,420
2,114,165
2005
N000
1,202,555
1,098,407
2,639,310
-
2,968,585
4,940,272
ANALYSIS
OF
REVENUE
AND
Records on expenditure profile of the Education Secretariat are not complete. The
amounts highlighted in Table 4 were extracted from the central records of the FCDA. In
2005 where figures were available the total revenue generated by the secretariat and its
agencies amounted to N75million as at the end of November. During the same 11
months total expenditure was N4.9billion. The total revenue generation of the entire
education secretariat and its agencies in 2005 was less than 7 percent of its overhead
disbursements.
Table 4: Comparative Analysis of Revenue and Expenditure
Total IGR
Personnel Cost
Recurrent Cost
Capital Cost
Total Expenditure
2003
(N)000
44,830
-
2004
(N)000
51,005
854,420
2,114,165
2005
(N)000
75,178
1,202,555
1,098,407
2,639,310
4,940,272
Although the revenue collection by the secretariat will climb to about N114million in
2006, this will still represent insignificant percentage of expenditure. In fact the likely
increase in education funding resulting from the New Universal Basic Education Scheme
will more likely reduce percentage contribution from internally generated revenue
towards education funding.
7.0
The major sources of revenue to the education secretariat remain in the registration and
accreditation of schools. The non-prescription of fees for inspection of schools is a major
omission in the guidelines for education management. Inspection of schools by the
officials of education secretariat or hired consultants will involve huge resources. The
immediate strategy for revenue boosting is to correct this deficiency in the guidelines
and ensure that schools pay for inspection.
119
Slgp
Also the registration and accreditation fees prescribed in the guidelines are low. The
fees prescribed do not seem to take size and tuition fees of schools into consideration.
The secretariat will need to carry out survey of schools operating in Abuja with a view to
obtaining information on their sizes and fees structure. It will be more equitable to base
registration and accreditation fees on parameters that will include the strength and
income of schools.
Box 1: Revenue Administration Strategic Plan Framework
Stage
Data
Collection
and Management
Assessment
Collections
Accounting &
Reporting
Supervision,
Monitoring &
Evaluation
Strategy 2006
Conduct survey to
identify all schools
operating in the
Federal Capital
Territory
Identify all schools in
Abuja
Establish uniform
revenue procedures
across all agencies
Implement revenue
coding and reporting
guidelines
recommended by
consultants
Establish a central
revenue monitoring
unit at the secretariat
to oversee revenue
processes.
Strategy 2007
Collate data on
students both in the
public and private
schools
Strategy 2008
Revise database
Categorise schools in
Abuja for registration
and accreditation
purposes
Recognise school
inspection as a revenue
source
Automate accounting
procedures
Establish
assessment
procedures based
on school categories
Enlarge monitoring
activities
Enlarge monitoring
activities
120
Slgp
Table 5: Activity Costing
Stage
Develop credible database
Expand sources of revenue
Ensure proper monitoring of
revenue operations across all
agencies
Activities
Responsibilities
Costs
N000
Identify all schools in
Abuja and categorise
them based on size and
tuition fees
Obtain ministerial
approval to back
levying of inspection
fees on schools
Establish central
monitoring unit
Department of
policy
implementation
20,000
Department of
policy
implementation
-
Implement new FCT revenue
codes
Redesign accounting
system in line with
recommended format
Improve revenue reporting
Prepare monthly
revenue collection
report
Director of finance
and admin,
education
secretariat
Director of finance
and admin,
education
secretariat
Director of finance
and admin,
education
secretariat
TOTAL
Activities
Develop credible database
Collate data on
students both in the
public and private
schools
Introduce inspection
fees and increase
accreditation fees
Enlarge monitoring
activities
Ensure proper monitoring of
revenue operations across all
agencies
Total
5,000
-
30,000
(2007/8)
Expand sources of revenue
5,000
Responsibilities
Costs
N000
20,000
5,000
5,000
30,000
121
Slgp
8.0
RECOMMENDATIONS
8.1
Database
The education secretariat should develop a central database to provide information
relating to the activities of its department and agencies. Such data should include
number of schools operating the Federal Capital Territory, statistics on students and
general information on enrolment trends.
8.2
Rates
The rates specified in the current education guidelines for school registration and
accreditations are low. The secretariat should also seek ministerial approval to charge
inspection fees.
8.3
Assessment Process
In order to cope with the activities that will result from implementation of the new policy
on school registration, accreditation and inspection, the secretariat must establish a
commercial unit to oversee collections.
The approved tariff must be published and applied correctly in bill processing. Given that
the secretariat does not have accurate data on schools operating in the Federal Capital
Territory, wide publicity must accompany the implementation of the new policy.
Compliance guideline must be produced and made readily available especially as it
affects bases, amounts and time of payments. Specific officers of the secretariat must be
trained and assigned the job of producing bills. A convenient bill distribution process
could involve invitation of schools to collect bills at the secretariat. Another option is to
deliver bills at specific school addresses.
8.4
Collection Process
Procedures must be established to allow schools pay directly into a designated bank
account. Copy bank tellers would be submitted at specified office where treasury receipt
will be issued to evidence collection. All collections must be entered in a proper treasury
register on a daily basis and closed at the end of each month to provide figures for
revenue report.
8.5
Accounting
All revenue collections must be recorded as they occur in a revenue register at the
collection office where copy bank tellers are submitted by payers. Copy of all treasury
receipts issued at the collection office must be forwarded to the accounts department as
source document to prepare financial records. A monthly revenue report should be
prepared to highlight details of receipts by categories and in line with the prescribed
revenue codes for the Federal Capital Territory.
All agencies must submit monthly revenue report to the secretariat where a summary
report would be prepared and forwarded to the central revenue office of the Federal
Capital Territory.
122
Slgp
8.6
Monitoring and Evaluation
Improved database at the secretariat will provide a clear picture of revenue expectation
of each agency. Monthly revenue report submitted by agencies must be analysed
against expectation and all deviations investigated. Deviations could be caused by not
raising bills when due, non payment by customers and by errors or fraud in accounting.
123
Slgp
Appendix A
Contacts
Name
1
C.G. Okeke
2
Sodangi Yusuf
3
Ari Isa Mohammed
4
Oko Collins
5
Mohammed Jiya
6
Daniel Nathan Tukur
7
Alao Moses
8
Umar Adamu
9
Obansa Yusuf
10 Abdul M. Mohammed
11 Ibrahim Daniel
Title
Director
HOD
Assist. Director
HOD
Admin. Officer
Accountant
Accountant
Planning Officer
Assist. Director
Revenue Officer
HOD Finance
12 Onoche Albert
Secretary
13 Ibrahim Aiki
14 Ibrahim Idris
15 Simon Awodo
Revenue Officer
Accountant
Director
Department/Agency
Finance & Admin.
Finance & Admin.
Finance & Admin.
Admin.
Finance & Admin.
Finance & Admin.
Finance & Admin.
Budget Unit FCDA
Recurrent Budget FCDA
FCT Universal Basic Education
Board UBEB
Department of policy
implementation
Education Resource Centre (ERC)
Agency for Mass Education (AME)
Agency for Mass Education (AME)
124
Slgp
Appendix B
Activity Schedule
Date
Person visited
Subject
1/12/05
5/12/05
9/12/05
C.G. Okeke
Introduction to the Directorate and request for
information agreed during meeting with revenue
committee and officers in charge of revenue.
1/12/05
Ari Isa Mohammed
Discussion on accounting system of the
Secretariat. Clarification of statuses of agencies.
Request for financial data on the activities of
agencies.
2/12/05
Oko Collins
Collection of data on staff and clarification of
general administrative system.
5/12/05
Mohammed Jiya
Collection of submissions on operational mode of
the Secretariat.
6/12/05
Daniel Nathan Tukur
Collection of statistics on agencies.
7/12/05
6/12/05
Alao Moses
Information
Secretariat.
8/12/05
Umar Adamu
Information on expenditure profile of the
Secretariat from FCDA records.
9/12/05
Obansa Yusuf
Information on expenditure profile of the
Secretariat from FCDA records.
on
expenditure
profile
of
the
125
Slgp
Annex 9
Health & Human Services Secretariat Revenue Administration
Patrick E. Okonji
December 2005
Table of Contents
1.0
INTRODUCTION......................................................................................... 128
1.1
Objectives of the Assignment.................................................................. 128
2.0
APPROACH AND METHODOLOGY .......................................................... 128
2.1
Review of documentation ........................................................................ 128
2.2
Review of Records .................................................................................. 128
2.3
Meetings.................................................................................................. 128
3.0
REVENUE ADMINISTRATION SYSTEM ................................................... 128
3.1
Overview ................................................................................................. 128
3.2
Institutional Framework ........................................................................... 129
3.3
Sources of Internal Revenue................................................................... 129
3.4
Overview of Revenue Administration Processes .................................... 129
3.4.1 Review of Statistical Data Collection and Management ...................... 129
3.4.2 Assessment Process ........................................................................... 129
3.4.3 Collection Process............................................................................... 129
3.4.4 Accounting/Reconciliation/Reporting................................................... 130
3.4.5 Strategic and Operational Monitoring & Evaluation............................. 130
3.4.6 Analysis of Revenue Collections 2002-2004 ....................................... 130
3.4.7 Review of Internal Revenue Projections.............................................. 131
4.0
STRATEGIES AND ACTION PLAN ............................................................ 131
4.1
Overview ................................................................................................. 131
4.2
Strategic Plan Framework ....................................................................... 132
4.3
Core Revenue Administration: Objectives and Outputs .......................... 132
4.3.1 Scope of Activities ............................................................................... 133
4.4
Accounting & Monitoring and Inspection: Objectives and Outputs.......... 135
4.4.1 Scope of Activity .................................................................................. 136
5.0
STRATEGY COSTING................................................................................ 137
6.0
NEXT STEPS .............................................................................................. 137
List of Appendices
Appendix A
Appendix B
Appendix C
Appendix D
Persons Met
Type of Service Provided
126
Slgp
Acronyms/Abbreviations
AEPB
AGIS
CMS
IRS
DFID
DSRF
FAAC
FCC
FCT
FCTA
FCDA
FEEDS
FY
HHSS
HMB
IGR
IRS
MDG
MTEF
N
NEEDS
PAYE
PEM
AG
AdG
SEEDS
SLGP
STB
FMF
ToR
WB
Abuja Environmental Protection Board
Abuja Geographic Information Service
Central Medical Store
Internal Revenue Service
Department for International Development
Drug and Supply Revolving Fund
Federal Accounts Allocation Committee
Federal Capital City
Federal Capital Territory
Federal Capital Territory Administration
Federal Capital Development Authority
Federal Economic Empowerment and Development Strategy
Fiscal year
Health & Human Services Secretariat
Hospital Management Board
Internally Generation Revenues
Internal Revenue Service
Millennium Development Goals
Medium Term Expenditure Framework
Naira
National Economic Empowerment and Development Strategy
Pay As You Earn
Public Expenditure Management
Accountant General
Auditor General
State Economic Empowerment and Development Strategy
State and Local Government Programme
Standard Trust Bank
Federal Ministry of Finance
Terms of Reference
World Bank
127
Slgp
1.0
INTRODUCTION
This is a final report on Health and Human Services Secretariat (HHSS) revenue
administration performance, projection of revenue collections for 2006 and 2008. In
addition, this report contains a set of strategies which has been formulated for the
achievement of improved revenue administration over next three years.
1.1
Objectives of the Assignment
This assignment is a part of larger assignment to review the internal revenue
administration of the Federal Capital Territory Administration which includes about 12
mandated departments and agencies. The specific objectives of this sub-assignment
are:
• To facilitate improvement in the overall revenue administration
• To identify weaknesses and constraints to improved revenue collections
• To project revenue collections and develop strategies for achieving future
performance targets.
2.0
APPROACH AND METHODOLOGY
The approach adopted is that recommended in the terms of reference; hold
discussions with officials of the FCTA. Specifically the following approaches were
followed:
2.1
Review of documentation
Review of documents such as Annual Approved Budget Estimates, FEEDS
documents.
2.2
Review of Records
Review of existing records in the revenue division and in other offices including
revenue summaries and returns.
2.3
Meetings
A number of meetings and interviews were held officers but some officers were
unable to neither provide any real information nor offer any support in the course this
assignment. Some officers complained that they could not lay their hands on records
of past years and instead referred the consultant to the FCDA.
3.0
3.1
Overview
The key policy issues arise from the fact that the government is only one of a number
of financiers and providers of healthcare services in FCT. The need to develop a
clearly stated policy on healthcare services to residents including the policies on cost
recovery and user charges as they affect indigent and poor patients. But the
information on present policies is not clear and statistical information on general
revenue administration performance in the Healthcare Services Sector in FCT was
scanty to say the least.
Consequently, a review of public revenue collection in the sector will provide, at best,
a partial view of revenue administration in public health institutions in FCT.
128
Slgp
3.2
Institutional Framework
Health and Human Services Secretariat has five operating departments with over
with about 13 Health facilities. Its main services are the provision of preventive and
curative healthcare services through its public facilities in the capital city of Abuja.
However, the public healthcare facilities are directly under the Hospital Management
Board (HMB). The HMB is responsible for operational supervision while the HHSS is
responsible for policy making and regulatory oversight.
3.3
Sources of Internal Revenue
Public health facilities in FCT are known to attract high in-outpatient attendance for a
variety of clinical reasons. Many of these patients are fee paying customers.
The following constitute the main sources of revenue for the Authority and are
essentially transaction related:
• Tenders Fees
• Drug Revolving Fund
• User Charges
• Registration/Renewal Fees
• Catering
• Miscellaneous
3.4
Overview of Revenue Administration Processes
The revenue administration functions in the HHSS have recently been defined with
respect to policy on cost recovery and user charges. But the standard process for
revenue administration is not described. It is important to point that in this sector,
collection and accounting functions are considered one and same process, which
may include reconciliation and reporting.
3.4.1
Data collection and management is a vital part of public health administration. The
data is used for clinical and epidemiological studies and analysis to further improve
both preventive and curative healthcare services. What is not clear is to what extent
the data collected is applied to other uses such as revenue administration and
planning.
3.4.2
Assessment Process
The bulk of the revenues is generated from the healthcare facilities and is primarily
transaction related revenues from the payment made by patients and other clients.
For drugs and other user charges the appropriate fees and charges are determined
by the HHSS. The patient is then assessed on the basis of services provided before
payment is made to the facility cashier. The main inhibiting factor in billings for
services provided by a facility is usually the absence and inadequate provision of
services to patients and customers. As would be expected, not all facilities provide
comprehensive healthcare services to patients.
3.4.3
Collection Process
The collection of revenue is made within the facilities by the cashier who issues
official receipts to the patient/customer before he or she proceeds to the point of
service. The collection of revenues is the responsible of account unit in a facility
which is localized in the cashier’s office.
129
Slgp
3.4.4
Revenue accounting function remains important in the overall revenue administration
in the HHSS. This process ensures that all collections are deposited in the proper
accounts with full documentation and adequate recording of transactions. Two basic
revenue collection records are revenue register and cash book. These two would
ordinarily be maintained at the point of revenue collection but would form the
foundation for comprehensive accounting, reconciliation and reporting and audit.
Reconciliation of cash book against the cash in bank is standard routine function of
the accounting unit carried out on monthly basis. This reconciliation exercise would
ensure that all monies collected are deposited properly and promptly in accordance
with the laid down procedures.
In the course of this assignment, no accounting books were made available to us but
the officials assured that proper books are kept in accordance with public sector rules
and regulations.
3.4.5
Effective revenue administration is anchored on the robust monitoring, inspection and
supervision of field offices that are directly responsible for various sources of revenue
including enforcement. The MIS of revenue administration would be responsible for
reviewing the assessment, collection and accounting procedures and processes and
ensure compliance. This function is usually separated from the routine revenue
operations.
3.4.6
Analysis of Revenue Collections 2002-2004
The HHSS internal revenues were derived from four main sources during the period
2002 to 2004 among the thirteen secondary healthcare facilities in the territory. In
view of limited data from the HHSS, this analysis has been based on partial
information revenue collection performance. From Table 1, for the years 2003 and
2004 more than half of the revenue was derived from drug revolving fund (DSRF)
56% and 59% respectively.
Table 1: Health Dept Internal Revenue Collections 2002-2005
Sub-Head
Description
2005 1
2004
2003
2002
Drug (DSRF)
0
138,282,837
106,605,246
46,858,187
User Charges
0
94,363,326
83,150,939
0
Sales
0
0
0
0
Others
0
0
0
0
Total
0
232,646,163
Source: Dept of Health, Revenue Division, Abuja
189,756,185
46,858187
The other main source of revenue is from the payment made by patients and other
customers for hospital services rendered in the facilities. But the revenues derived
from other sources such as catering and laundry services were not disclosed in the
course of this assignment.
1
Figures for 2005 fiscal year were not made available.
130
Slgp
However, what is interesting is the dramatic jump in revenue from N46.8 million in
2002 to N106.6 million in 2003. There are a number of things that would have led to
the improvement in performance from that source. It is either that DSRF was
introduced in 2003 or relative autonomy was granted to the health facilities in2003.
3.4.7
Review of Internal Revenue Projections
After reviewing the revenue collections from 2002 to 2005 in the preceding
paragraph, the HHSS medium term projection of annual revenue collections from
2005 to 2008 are provided under four main headings. Table 2 gives a breakdown of
the revenue sources.
Table 2: HHSD Internal Revenue Forecasts 2005-2008
SubHead
Description
2005
2006
2007
2008
DSRF
170,000,000
205,000,000
350,000,000
390,000,000
User Charges
120,000,000
150,000,000
175,000,000
200,000,000
15,000,000
20,000,000
25,000,000
30,000,000
Sales
Others
TOTAL
3,000,000
5,000,000
10,000,000
15,000,000
308,000,000
380,000,000
560,000,000
635,000,000
Source: Consultant projection8
Under DSRF, it is expected that there would be improvement in managing the
scheme in areas of inventory procurement, stock control and monitoring. The
scheme would make available quality drugs and supplies at reasonable prices for
which each facility can procure from the Central Medical Store (CMS). The DSRF
would remain the main source of revenue for the HHSS for the foreseeable future.
On the whole the revenue administration performance in the fiscal year 2006 will
primarily depend on improvement in efficiency and effectiveness of service delivery in
the facilities and institutions with revenue generating functions.
4.0
4.1
Overview
Improving revenue administration in a social service sector institution like HHSS
requires a set of policy with regards to what services are free and in which areas do
cost recovery have to be imposed. Statistical data indicate the main source of
revenue for HHSS is the DSRF and the scheme depend on capital formation for it to
be self-sustaining and consequently, a reasonable percentage of the mark up must
have to be re-invested into the fund while some percentage would be used to defray
administrative costs.
Improving the quality of service delivery is essential to improving revenue in the
healthcare service institutions. This section outlines simple and concrete activities to
carry out in order to improve internal revenue.
131
Slgp
4.2
Strategic Plan Framework
In order to prepare the Strategic Plan, the consultant discussed with key officers in
the revenue division and in planning unit of the HHSS. A five-point strategy is
proposed which is expected to take from one year to three years to implement,
starting in January 2006:
•
•
•
•
•
•
Accelerated Staff Training & Development
Comprehensive data collection and statistical analysis
Introduction of IT for Data Storage and Management
Revenue Monitoring, Inspection and Supervision Unit
Computerization of entire revenue administration system
Improvement in Logistical Support & Management System
The following sections describe these strategies, the intended timetable, coordination and management arrangements, resource requirements and some
additional benefits that the process may achieve.
The proposals put forward in this report aim at two main areas, namely operating and
strategic improvements in the revenue administration in the HHSS. The sum of the
improvements would be measured both in the level of operating efficiency and level
of periodic revenue collections. It is envisaged that the proposed reforms would be
phased and logically sequenced.
4.3
Core Revenue Administration: Objectives and Outputs
The objectives here relate to initially improving capacity conditions aimed at
enhancing productivity, efficiency and operational effectiveness within public
Healthcare Service Sector, both at HHSS and HMB level as well as at the facility
level. Four main objectives have been identified:
• Providing accelerated training for core revenue staff at head office and field
offices, including facility staff;
• Improved revenue assessment and collection capabilities of the field offices;
• Enhanced efficiency and effectiveness of field reconnaissance processes and
reporting;
• Improved oversight and revenue performance reporting.
Anticipated outputs to be derived from achieving the above objectives are broadly as
follows:
• Phased improvements in the quality of staff deployed in revenue division and
in field offices throughout HHSS and its agency and institutions through
enhancement of revenue processes, capacity-building etc;
• Improved internal monitoring, audit and capability;
• Streamlined and simplified revenue data management processes leading to
gradual process automation of revenue administration;
• Greater ability to accurately monitor and forecast revenue collection and carry
out reconciliation;
• Enhanced performance and enforcement capabilities.
132
Slgp
4.3.1
Scope of Activities
This section provides a summary of the main areas of the work plan, categorised
according to the activity types:
1.
Training, capacity building and institutional support
Phase 1
Quick impact training for core revenue staff revenue accounting and reporting.
Phase 2
Capacity building for revenue staff in departments and agencies for preparation of
revenue forecast, assessment, collection, accounting and reporting
Capacity building in revenue administration monitoring and evaluation
Institutional development for revenue administration – capacity building for
forecasting, collecting, accounting, reporting, etc
Periodic revenue administration support and guidance during 2006 and 2007
revenue budget preparation.
Phase 3
Support in movement towards multi-year revenue budgeting
Periodic capacity building for the HHSS and HMB for computer-based revenue
budget preparation, management and monitoring functions
Implementation of training and familiarisation with the revised revenue budget
classification.
Training and capacity building will form a major component of the action plan as
human capacity constraints were considered to be one of the main hindrances in the
revenue administration and monitoring and reporting process. As well as the
activities outlined above, the quarterly sensitisation workshops for General
Management (HHSS) will focus on Revenue Administration issues. In Phase 1, a
broad training needs analysis should be conducted (see Appendix II). This will
consider the precise training needs that will be addressed in the remainder of the
work plan. At the same time, quick impact training will be provided with the aim of
contributing to a noticeable improvement in the revenue administration in first half of
2006.
In Phase 2, capacity building will be provided in the preparation of revenue budget in
the new format (template) and in revenue performance monitoring. The precise
details of this will depend on the outcome of the training needs assessments required
to support the implementation of specialized training and development. Where at all
possible, training is to be of a practical nature so that it is capable of workplace
application. In addition, periodic advisory support and guidance will be provided to
departments during the fiscal year to ensure smooth introduction of new revenue
template. .
Phase 3 will focus on support to the Revenue Division in movement towards output
and performance-based revenue budgeting. This is a medium term goal that will not
be achieved in the first year. However, depending on the progress of other reforms,
it will be considered during Phase 3. Periodic capacity building will also be provided
to Health Department officials as computer systems are developed and introduced.
133
Slgp
2.
Systems & process development
Phase 1
Streamlining of revenue budget preparation processes and calendar to reduce
bottlenecks and introduce greater revenue budget defence opportunities
Implementation of revenue administration and IGR reform
Phase 2
Initial computerisation of central revenue consolidation system
Improvements to revenue report presentation format to improve understanding,
transparency and accountability.
Phase 3
Implementation of revised revenue classification structure
Redesign and implementation of computerisation of head office revenue division
Support for movement towards output and multi-year approaches to revenue
budgeting/planning (technical enhancements)
Further review and enhancement of revenue budget and reporting presentation
formats and dissemination channels.
The action plan will also concentrate on the development of systems and revenue
budget and monitoring and evaluation process improvement. The focus will be on
information systems and development of revenue administration.
The starting point in Phase 1 is an introduction of revenue accounting and reporting
template and Sensitization Workshops for revenue officers. In the workshop,
discussions of the recommendations and strategies for improved revenue
administration in the HHSS in order to increase general understanding of the
proposed process and where its real strengthens lie, particularly in practical terms for
operating department.
Phase 2 will also begin to address issues around automation of the head office
revenue division. Currently the revenue accounting and reporting is carried out
manually by the HHSS, requiring considerable time for compilation and production.
Automation of this basic process will provide significant benefits.
Further improvements to the presentational format of the revenue budget are also
considered in Phase 2, seeking to improve readability and transparency. Summary
analyses, the use of graphs and other pictorial alternatives can greatly enhance its
usability and will provide an important starting point for broader dissemination and
understanding of revenue budget, accounting and reporting of information.
Phase 3 seeks to build on these basic systemic and process improvements, and is
largely directed towards supporting the adoption of more output or performancebased approaches to revenue budget preparation and administration. An important
feature here is the introduction of the revenue budgeting (and accounting)
classification structure. The current classification structure does not permit detailed
analysis of collections by, for example, function, sources and types, and generally
tends to aggregate revenue estimates according to general category. If there is to be
progression towards relating input to outputs and reflecting the same in revenue
administration costing, it is essential that the budget classification supports this level
of analysis.
134
Slgp
A further strategy is the gradual roll-out of integrating revenue function into the
Central Revenue Unit (or IRS) at the FCTA.
3.
Documentation & Manual development
Phase 1
Support for registration of all healthcare facilities in FCT
Patent Medicine Stores
Pharmaceutical Stores
Maternity Homes
Medical and Dental Clinics
Phase 2
Institution development support for production of a manual covering:
Revenue budget/management
Revenue accounting & reporting procedures
Long term revenue planning and management
Monitoring and evaluation of Revenue Administration
Phase 3
Development of manuals to support output and multi-year revenue budgeting
approaches
As part of the reform programme, and closely coordinated with the capacity building
and training exercises, manuals will be developed for staff in a variety of procedures
that are important in the Revenue Administration process. The training and capacity
building activities are intended to support the implementation of these manuals and
will be carried out in a practical, work-based manner.
4.4
Accounting & Monitoring and Inspection: Objectives and
Outputs
The objectives here relate to initially establishing systems for providing reliable,
timely and complete revenue administration information and in strengthening audit
and oversight capabilities within the HHSS. Four main objectives have been
identified:
• Establishing sound systems for reporting reliable, complete and timely
revenue information to Head Office and to HMB;
• Improved revenue forecasting and enforcement management capabilities in
the Head Office;
• Enhanced efficiency and effectiveness of external audit processes and
reporting;
• Improved oversight and revenue performance reporting.
Anticipated outputs to be derived from achieving the above objectives are broadly as
follows:
• Phased improvements in the quality and timeliness of revenue information
throughout the HHSS through enhancement of revenue accounting
processes, capacity-building etc;
• Improved internal monitoring, audit and capability;
• Streamlined and simplified accounting and reporting processes leading to
gradual process automation of revenue administration;
135
Slgp
•
•
4.4.1
Greater ability to accurately monitor and forecast revenue collection and carry
out reconciliation;
Enhanced performance reporting and oversight capabilities.
Scope of Activity
Objective 1: Sound systems for reporting reliable, complete and timely revenue
performance information at Head Office and at field office levels
Phase 1
Improvement in revenue accounting processes and information flows
Quick win training on existing revenue accounting and processes
Sensitisation of the role of revenue monitoring, control, evaluation and reporting
Phase 2
Streamlined and simplified manual accounting and reporting processes
Introduce improvement in accounting procedures and guidelines, supported by
training
Phase 3
Introduce new template of revenue budgeting and accounting classification for
enhanced performance analysis and financial control
Implementation of training for revised classification and systems
Objective 2: Improved oversight and inspection of revenue performance
reporting
Phase 1
Sensitisation on the role and importance of M & E and oversight functions
Sensitisation on the importance of oversight and performance measurement in
revenue administration
Phase 2
Remedial measures to address current constraints to timely reporting of revenue
collections
Phase 3
Introduction of more comprehensive
performance/outcome information
approaches
to
reporting
revenue
136
Slgp
5.0
STRATEGY COSTING
The proposed strategies in Appendix B have been unbundled into activities in
Appendix C. These activities have not been sequenced; however they have been
grouped into phases for purposes of implementation.
The indicative costing of the strategies and activities is provided in Appendix III to this
report. The cost estimates have been provided for a three year period. During the
first year which approximate to first phase of strategy implementation, it is estimated
that it would cost the HHSS about N23 million to roll out the strategies and it is
expected that during the fiscal year 2006, the internal revenue performance would
improve by about N100 million. These are approximations and there are other
factors and imponderables that would shape the performance of the HHSS during the
next three years.
6.0
NEXT STEPS
In this section, a number of strategic steps have been outlined to be carried out in
first half of 2006:
• Work in concert with that Revenue Working Group in FCTA to introduce the
new revenue accounting and reporting template
• In consultation with Revenue Working Group carry out Revenue
Administration Workshops for core revenue staff.
• In consultation with Revenue Working Group in FCTA start the process of
comprehensive revenue data collection.
137
Slgp
Appendix A
Persons Met
Name
Department
Position
Mohammed M. Mohammed
H & HSS
Technical Assistant (Project)
M.G.J. Bako
H & HSS
PEO II (Accts)
Dr. Evans Onyekele
H&HSS
Phermc. Registrar
138
Slgp
Appendix B
Strategic Thrust
Strategy 2006
Accelerated Staff Training
& Development
All the revenue administration staff
should undergo basic training in modern
revenue administration and in computer
training
Carry out comprehensive enumeration to
complement the existing statistical
materials and data.
Data Collection and
Studies
Introduction of IT for
storage, process and
analysis of data
Revenue Monitoring,
Inspection & Supervision
Unit
Introduction of Desktops in the Head
Office revenue division capture monthly
revenue performance+.
A specialized MIS Unit should be set up
to carry out strategic oversight function
(field reconnaissance) in conjunction with
HMB over public health facilities.
Computerization of the
entire Revenue
Administration System
Improvement in logistic
support and management
system
Provision of Motor Vehicles and Cycles
for revenue collection & monitoring and
inspection.
Strategy 2007
Commission outside experts to carry
out detailed study and data collection
on FCT to cover socio-economic
magnitudes.
Strategy 2008
Up-dating of the revenue database
with respect to healthcare facilities.
There will be need to also up-date all
categories of statistical database for
purposes of effective revenue
administration planning.
This function might be taken over by
the proposed Abuja Internal Revenue
Service when it is fully functional in
2007.
Computerize the major public
healthcare facilities in FCT to ensure
improve collection and accounting of
revenue.
Additional provision of Motor
Vehicles and Cycles for field revenue
operations.
+ This may require additional expenditure on back-up generating set.
139
Slgp
Appendix C
Objectives Æ
•
•
•
Activities
Responsibilities
Training & Capacity Building
Accelerated Training
Research, Statistics &
Planning
st
1 Phase IT for Processing
Data
MIS System of Revenue
Administration2
Provision of logistical support
FCTA
Improved efficiency and effectiveness in revenue administration
Improved revenue assessment and collection of revenue
Improved service delivery
Local
Technical Support
3,000,000
5,000,000
4,000,000
HELATH DEPARTMENT
N6,000,000
6,000,000
HEALTH DEPARTMENT
N5,000,000
23,000,000
(2007/8)
Activities
Responsibilities
Capacity Building
Full Automation of RA
Staff Training & Development
Further provision of logistics
Health Department
FCTA
Health Department
5,000,000
23,000,000
Nil
Local
TOTAL
Total
Nil
N4,000,000
TOTAL
2
External
N3,000,000
N5,000,000
External
N15,000,000
N15,000,000
N10,000,000
40,000,000
Total
Nil
Nil
15,0000,000
15,000,000
10,000,000
40,000,000
MIS: Monitoring, Inspection & Supervision
140
Slgp
Appendix D
Type Of Services Provided At The Facilities
DRUGS
LAB Test
Dental
Dental cards
Dental Lab.
Anaesthetics
Theatre
Casualty
C/Services
Medical Records
GOPD
Med.Cert
A/Natal
Eye TMT
ENT
ECG
Maternity
PHYSIO
Scan
Wards-M
Wards-F
X- ray
Mortuary
Gas
Circumc.
WARD-Vip
MVA
Catering
Retainership
TOTAL
141
Slgp
Annex 10
Report On Revenue Administration
Agriculture And Rural Development Department
Chinedu Eze
December 2005
Table of Contents
1.0
2.0
2.1
2.2
2.3
3.0
4.0
4.1
5.0
5.1
5.2
INTRODUCTION............................................................................................... 143
REVENUE ADMINISTRATION SYSTEM ......................................................... 143
Revenue Sources.......................................................................................... 143
Revenue Administration Processes .............................................................. 143
Weaknesses of the Revenue Administration Processes ............................... 144
ANALYSIS OF REVENUE COLLECTIONS FOR 2005 ................................... 144
REVENUE PROJECTION................................................................................. 145
Analysis of Expenditure ................................................................................. 145
RECOMMENDATIONS..................................................................................... 146
Short Term Strategies ................................................................................... 146
Medium and Long Term Strategies ............................................................... 146
List of Appendices
Appendix A
Strategies and Action Plan
142
Slgp
1.0
INTRODUCTION
The Agriculture and Rural Development Secretariat is one of the five mandated
Secretariats under the Federal Capital Territory Administration (FCTA). The mandated
secretariats were set up this year as a result of the reorganization process in the FCTA.
The Secretariats may be likened to ministries in a State level structure.
The Agriculture and Rural Development Secretariat has Executive Secretary as the
Chief Executive. The Executive Secretary is assisted by the Director Finance and
Administration (position that may be likened to a Permanent Secretary in a State
structure). The Secretariat has Agric Department, Planning Research and Statistics,
Administration, and Accounts. The revenue generation professional units are under the
Agric Department.
2.0
2.1
Revenue Sources
The Secretariat generates revenue on Agricultural transactions and inspection services
within the Federal Capital Territory through its professional units at the various out
stations. The expected sources of revenue of the secretariat are from following:
• Fisheries
• Forestry
• Animal Health
• Livestock
• Produce.
However the secretariat records indicated only activities in the following
• Livestock (Abattoir),
• Forestry, and
• Tractor Loan scheme.
2.2
Revenue Administration Processes
The revenue from livestock and forestry are collected from the seven out station of the
secretariat (five for livestock and two for Forestry). In each of the outstation the same
officer performs the assessment functions as well collection of the amount. The seven
out stations are listed below:
• Garki
• Karu
• Gwagwalada
• Abaji
• Nyanya
• Kubwa
• Deidei.
143
Slgp
2.3
Weaknesses of the Revenue Administration Processes
Up-Dating of the revenue base data: The professional units operate almost in the
vacuum as regards potential revenue base of different sub-sector. Though staff stated
that they are still in the process of taking proper control of activities at the outstations.
Revenue generation limited to only two sources: Many of the revenue sources are
dormant and are really not viable hence the Secretariat had neglected them over the
years. But the Produce, Animal Health and Forestry sub-sectors have real potentials for
improved revenue collection if the system can be streamlined and strengthened.
Inadequate Monitoring of activities of the outstations: During the first phase of this
assignment the Secretariat were unable to provide comprehensive revenue data
because they were yet to obtain same from the outstations. However, the revenue
collections for 2005 ware provided during this phase of the assignment. The Secretariat
is yet to institute clear mechanism of monitoring the assessment and collection functions
at the outstations, particularly as assessment and collection is done by the same person
and purely on cash basis.
Weak Accounting and Enforcement: The accounting of revenue at the outstations is
primarily based on cash collection and they are expected to maintain adequate records
of collections and carry out reconciliation, in addition to returns to the Secretariat. The
Secretariat confirmed that the outstations have from August 2005 commenced rendering
returns to the Secretariat but records were not made available for review during the visits
to the Secretariat. It is not clear who is responsible for reconciliation of revenue collected
at the outstations. There is no process or method of enforcing payment of revenue
accruing to FCTA.
3.0
ANALYSIS OF REVENUE COLLECTIONS FOR 2005
The consultants were unable to obtain revenue figures during the first phase of the
assignment in July 2005. However the consultants were able to obtain monthly revenue
collections from January to November 2005. The monthly collections for 2005 are:
Table 1:
Monthly Collections for 2005 (November)
MONTH
JANUARY
FEBRUARY
MARCH
APRIL
MAY
JUNE
JULY
AUGUST
SEPTEMBER
OCTOBER
NOVEMBER
TOTAL
LIVESTOCK
347,190.00
298,470.00
320,000.00
394,150.00
400,000.00
418,350.00
450,000.00
312,750.00
345,200.00
413,950.00
320,900.00
4,021,110.00
FORESTRY
0
0
96,000.00
0
0
0
0
0
0
0
25,000.00
121,000.00
TRACTOR LOAN
0
0
0
4,800,000.00
0
0
0
0
0
0
100,000.00
4,900,000.00
Source: Revenue Unit Agriculture and Rural Development Secretariat
144
Slgp
The revenue data is for 2005 only and do not cover all the revenue sources of the
secretariat. The period is not enough to make a reasonable conclusion on the revenue
performance of the Secretariat.
4.0
REVENUE PROJECTION
The secretariat after the first phase of the assignment set up a revenue unit within the
Finance and Accounts Department. The Officer in charge of the unit made a tentative
target of N9.6 million for 2006 (i.e. about 10% increase over the current year collections).
The Officers projection relates to the three revenue sources without taking into
consideration other sources such as Licenses for Fishing in Dams and Reservoir, Power
Saw Mill and Hammer Licenses, Veterinary Licenses and fees, Trade Animal Fees, etc.
The consultants after extensive consideration made the following revenue projections for
2006, 2007 and 2008:
REVENUE SOURCE
Abattoir & Trade Animal
Fees
Forestry Fees
Licenses for Fishing in
Dams and Reservoir
Saw Mill & Hammer
Licenses
Others
Total
4.1
2006
12,500,000.00
2007
14,000,000.00
2008
16,000,000.00
2,500,000.00
500,000.00
3,000,000.00
500,000.00
4,000,000.00
500,000.00
500,000.00
500,000.00
500,000.00
10,000,000.00
26,000,000.00
12,000,000.00
30,000,000.00
15,000,000.00
35,000,000.00
Analysis Of Expenditure
The Agriculture and Rural Development Secretariat like other mandate secretariat of
FCTA were created this year the expenditure analysis relates to 2005. The expenditure
of the secretariat from January to September 2005 is as follows:
• Personnel
N203,360,860.00
• Overhead
N105,729,376.00
• Capital
N230,654,273.00
The Agriculture and Rural Development Secretariat’s expenditure is clearly higher than
its internally generated revenue. The total revenue of the secretariat from January to
September 2006 is N7.2million, about 2% of total expenditure for the same period.
145
Slgp
5.0
RECOMMENDATIONS
The following recommendations are proposed as a means of improving the Secretariat’s
revenue generation and achieving the target revenue for 2006, 2007 and 2008.
5.1
Short Term Strategies
•
•
•
5.2
The Secretariat’s revenue unit should is liaison with the Professional units
commence assessment and collection of revenue from other sources that are not
currently being captured by the secretariat.
The Finance Department should through the Revenue unit put in place a
comprehensive accounting system to track revenue, ensure effective monitoring
and reconciliation of revenue collection books both at the outstations and
secretariat.
The officers of the various units at the Secretariat should take proactive action in
monitoring and supervising the revenue generation efforts of the staff at the
outstations.
Medium and Long Term Strategies
•
•
•
Developing comprehensive database of the revenue sources of the secretariat.
Total review of the existing tariffs currently being used by the Professional units.
Training of staff of revenue unit, professional units at the Secretariat and
outstations on improved method of assessment, collection accounting,
reconciliation and monitoring of revenue generation processes.
146
Slgp
Appendix A
Strategies and Action Plan
Agriculture and Rural Development Secretariat
Stage
Strategy 2006
Data Collection Establish a Revenue Unit to collect
and
data to compute revenue base and
Management
estimate potential collection of
revenue
Assessment
Identify other potential revenue
sources. Training of staff on improved
assessment methods
Collections
Training of staff on collection methods
Accounting &
Reporting
Put in place a comprehensive
accounting system within Secretariat
and out posts
Improve monitoring, supervision and
reconciliation of accounts processes
Supervision,
Monitoring &
Evaluation
Strategy 2007
Project potential revenue
from all sources
Strategy 2008
Review existing tariffs
currently being used
Privatise the collection
process of some revenue
sources
Introduce automation in the
accounting process
147
Slgp
Objectives Æ
•
•
Short-term Strategies
(2006)
Capacity Building
Developing Revenue
Data base
Institutional Development
Activities
$
TOTAL
(2007/8)
Automation and
increasing collection
points
Activities
Responsibilities
Equipment, software
and training & logistics
Logistics
FCTA/A&RD
Local
External
10,000,000
0
FCTA/A&RD
1,000,000
Improved efficiency in revenue generation
Increase in revenue generation
Responsibilities
Staff Training
Provision of Logistics
FCTA/A&RD
FCTA/A&RD
Local
External
2,000,000
0
5,000,000
0
Provision of materials
FCTA/A&RD
3,000,000
3,000,000
10,000,000
10,000,000
Total
2,000,000
5,000,000
Total
10,000,000
1,000,000
11,000,000
Identification and
selection of Private
Participant
148

Annex 6 Federal Capital Territory Administration Abuja Geographic

Transcription

Similar documents

18 mancid annual conference [manco]

amuzgo people - The Seed Company

EHCT

WORLD UNITED KARATE ORGANIZATION

Biobanking at the Natural History Museum London. ESBB Marseille

Tomas Pubrdle

rfx title achievement

eureka - Innova Valencia

E-Fulfillment Towards a success story for The Netherlands?