A NEW FINANCIAL ARCHITECTURE EMERGES IN BAYELSA STATE

IN HIS INAUGURAL ADDRESS, GOVERNOR HENRY SERIAKE DICKSON SAID: 

“We shall undertake fundamental reform of the governance culture to emphasize transparency, accountability, due process and value re-orientation by all institutions and functionaries of government, beginning with my humble self. For emphasis, there shall be zero tolerance for corruption under my administration. The days of enrichment without labour and funding the greed and avarice of a few at the expense of the development of our people is over. I will work hard to plug all leakages and sources of corruption which have been the bane of our development. I will rather use our common wealth to fund the construction of good roads, education, promote tourism, generate wealth and develop agriculture than fund corruption and greed. Be prepared therefore for a fundamental paradigm shift in the governance culture, values and lifestyle of public officials. I am aware that we will fierce resistance, we may be misunderstood but we shall always do what is right in the interest of you the people…As part of our commitment to transparency, we shall announce and publish all revenues accruing to the state beginning from now”.

In keeping with this promise, the Ministry of Finance has achieved the following
(1) COMPUTERIZATION OF BAYELSA STATE. GOVERNMENT FINANCIAL OPERATION. Bayelsa state government is currently implementing the oracle Financial (e-business suite). The purpose is to streamline financial operations and to produce timely account and other reports. Following the need to grow Bayelsa State to achieve best practice in management and strategic decision making, this is of great importance. More importantly is the need to run a government using ICT to achieve the following. (1) Streamline Financial Operations.

(2) (2) Produce timely Account and other Reports (3) Accountability and transparency (4) Effective Human Resource Management. (5) Sharing of information across all Government Departments. (6) Real time access to accurate information. The Government therefore, produced that service of a reputable IT company to design and implement Oracle Enterprise Suite, an Enterprise resource Planning System to provide the needed solution to the problems raised above. We are continuing with the implementation and the e-business suite is expected to be operational at the end of the first quarter of 2013. So far, N1.2billion has been spent on the scheme.

(2) RECOVERIES FROM FAAC AND OTHERS STATUTORY AGENCIES. During the year, the Bayelsa State Ministry of Finance, working with various consultants, recovered the sum of N18.6billion from FAAC as follows; (i) Derivation Fund on Nembe Fields Wrongly allocated to other states N17.3billion. (ii) Derivation Funds on EA Fields due to Bayelsa State but omitted during computation of oil production indices N1.3billion. TOTAL =N18.6b. During the same period Bayelsa State had to refund to other states the following. (a) Over payment of Excess Crude/Augmentation 2006 to 2010 N5.4B (b) Refund on Okori and Ndah Fields N2.0B. TOTAL=N7.4B. We are however, disputing the N2b Refund because Bayelsa State had never benefited from any revenue generated from Okori and Ndah Fields. Clearly we cannot refund what we never received. We are also processing recovery of over N100b derivation funds due to Bayelsa State but wrongly credited to other states, because oil wells in Bayelsa State were wrongly assigned to other states.

(3) (3) STRATEGIC SAVING ACCOUNT. During the year the Bayelsa state House of Assembly approved the use of N1.5b from this Account for flood related activities leaving a balance of N3.1b as at December 31,2012. The N3.1b was utilized as follows. (a) Flood relief activities 0.5b. (b) Post flood activities N1.0b. TOTAL = N1.5b
(4) PRODUCTION OF HALF YEAR AUDITED ACCOUNT: For the first time in the history of Bayelsa State, a half year Audited Financial Statement was produced. This is in addition to the monthly transparency briefing where the Governor briefs the press and people of Bayelsa State of the Income and Expenditure of the State. Another achievement of this administration is the prompt and regular payment of salaries, overhead and other statutory payments.
(5) RE-ENGINEERING OF INTERNALLY GENERATED REVENUE STRUCTURE. Working with the new Board, we are taking concrete steps to improve internally Generated Revenue. Currently the state Government generates between N400 to N600million a month on Internally Generated Revenue. After reviewing the current tax laws“modalities have been put in place to generate a minimum of N1b a month.

REDUCTION IN SALARY BILL:
The Ministry of Finance working with Treasury and Accounts has been able to reduce salaries and allowances from over N5.4b to N4.1b.
INTERNALLY GENERATED REVENUE PROFILE OF THE STATE. The current internally Generated Revenue is low, Government is taking very concrete steps to shore up the internally Generated Revenue. First, a new Board made up of seasoned professionals have been appointed. Already, Government has set up a target for Internally Generated Revenue generation per month at N1b which is expected to increase to about N2b in two 2years. Experienced consultants are being employed to work with staff of the Board of Internal Revenue. The consultants are coming with IT know-how and past tax experience. All these we hope will translate to higher internally Generated Revenue. Government will also review existing tax laws to bring them in line with current realities.
PERSONAL INCOME TAX ISSUES. Current Civil Servants and those on Government payroll are being taxed arbitrarily without following the existing tax laws Government is now determined to implement the Personal Income Tax Act as amended in 2011. In fact, what Government want to do is to follow the stipulations under the current tax law to the letter. **INVESTMENT PROFILE OF THE STATE. • Ministry of Finance Incorporated (MoFI), which is the investment arm of the Ministry of Finance currently, holds shares with a nominal value of N12.34billion. •Ministry of Finance Incorporated (MoFI) share holding at market value stands at N9,442,233,434.49. Dividends collection for the year ended 31 December 2012 was N126,401,564.73. The Government acquired additional 35.18% of the Ordinary Shares of Linkage Assurance Plc at a cost of No. 50 per share giving an aggregate purchase consideration of N1,686,900,414.82 (one billion, six hundred and eighty-six million, Nine hundred thousand, four hundred and fourteen naira and eighty-two kobo) only. This acquisition thus gives Bayelsa State Government Ministry of Finance Incorporated (MoFI) a controlling interest of 53%. NOTE; Year end 2012 Reconciliation with Stock Brokers is yet to be concluded. Actual cost of acquiring these investment would have been higher,but for the crash in the Capital Market in 2008/2009.

Again, with the acquisition of BankPHB and Skye Bank by the CBN, our shares with these institutions are currently zerorized.
MDAS AND INTERNALLY GENERATED REVENUE: We are aware that some parastatals that generate revenue, do collect and spend without remitting the revenue to the designated IGR accounts. We are putting measures in place to check this unwholesome practice. In future, there will only be one central billing and collection point. We are evaluating various software packages to enable this process.
PAY-ROLL FRAUD. The present Administration on assuming office in February 14th met a monthly payroll bill of N5.4b. Government took definite steps to reduce this amount including promulgation of a law. We are succeeding as the figure has since dropped to N4.1b. This figure we believe will reduce further when we complete the biometric exercise and implement fully the Oracle Financial Reporting software.

Many thanks to Kokobaiye Abeki did the transcription and wrote this report when the Social Media Team interviewed the Honourable Commissioner for Finance, Hon. Duate Iyabi