- Operating Surpluses: We Deserve Return on Investments, Says FG
The Federal Government says it has invested enormous resources in the establishment of some agencies and therefore deserves to get return on investments in the form of operating surpluses from the concerned agencies.
The Federal Government stated this in a new document titled: ‘Operating Surplus Calculation Template’, which was prepared by the Fiscal Responsibility Commission in collaboration with the Office of the Accountant-General of the Federation and obtained by our correspondent in Abuja on Monday.
In the document, the Federal Government also claimed that the mopping of unspent funds from the Ministries, Departments and Agencies at the end of a financial year by the OAGF was not scientific and thus the need for the adoption of payment of operating surpluses by the MDAs.
The document stated, “The Federal Government has the statutory responsibility of setting up bodies to perform certain specialised functions for smooth running and growth of the economy. It has consequently invested resources and efforts to set up such entities.
“Akin to a private sector investor, the Federal Government expects to reap some level of reward out of the surplus made by these entities from their operations by way of independent revenue.
“Over time, the Office of the Accountant-General of the Federation has been mopping all balances and liquid funds at the end of each financial year. The practice is, however, not based on a scientific assessment of the surplus earned by the entities, nor does it encourage them to retain a portion of that surplus.”
The Fiscal Responsibility Commission Act, 2007 requires listed government agencies to remit 80 per cent of their annual operating surpluses to the Consolidated Revenue Fund.
The operating surplus is made up of revenues accruing to government agencies above what they are approved to spend at the beginning of the budget year.
The new template on calculating operating surpluses stipulates expenses, which agencies are not allowed to deduct before calculating what they are to pay into the Consolidated Revenue Fund as operating surpluses.
These include salaries in excess of scales approved by the National Salaries, Incomes and Wages Commission; monetisation of medical and other allowances; business class travel for officers other than chairman and chief executive officer; and personal loans to staff in excess of approved limits, including unapproved mortgages.
Others are expenditure in excess of approved mandates; donations to individuals, including to political and charitable organisations; and expenses in respect of conference meetings in excess of approved circular on frequency of meetings.
The Federal Government, through the Minister of Finance, recently expanded the list of agencies that should be pay operating surpluses from 32 to 122 and targets to get N886bn from them per annum.
The articulation of the new template for calculating operating surplus is one of the measures that has been taken by the government to push for the realisation of the financial target from the agencies.
