The House of Representatives has set up a five-member subcommittee to investigate the process of approving severance packages for political appointees in ministries, departments, and agencies (MDAs).
The Chairman of the House Committee on Public Accounts, Hon. Bamidele Salam, announced the formation of the subcommittee during an investigative hearing into the 2020 audit queries issued against the Securities and Exchange Commission (SEC).
During the hearing, lawmakers questioned the Commission over an audit query concerning irregular payments of severance packages and allowances to non-staff, totaling N255,426,494.80.
The report indicated that N128,869,606.22 was paid to an individual on January 5, 2017, as a severance allowance, while another individual received N128,556,888.58 on the same date, also as a severance allowance.
Similarly, the Office of the Auditor-General for the Federation queried the Commission over an illegal payment on the gross income earned from pension fund investments, totaling N93,380,888.38.
In response to the audit queries, SEC Director-General Dr. Emomotimi Agama explained that the severance packages and allowances were paid to former executive commissioners who served at the Commission from 2013 to 2017.
“At the end of their four-year tenure, they were paid severance packages as approved by the Board for their positions,” he clarified.
Dr. Agama further explained that the Commission operates both the Defined Benefit and Contributory Pension Schemes, which are managed by three Pension Fund Administrators (PFAs): Sigma, Premium Pension, and Stanbic IBTC.
He noted that the Commission opted to pay management fees to the PFAs to mitigate the risk of a future deficit that would need to be offset within 90 days.
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Expressing dissatisfaction with the situation, Hon. Salam urged the subcommittee to make recommendations to be presented to the full House for amendments to the Establishment Acts of certain government agencies.
Visibly angered by the breach of financial regulations, the lawmaker alleged that the boards of some government agencies wield excessive power and approve arbitrary severance packages for political appointees.
He said, “If we are paying such an amount to executive commissioners who served for just four years, how do we justify compensation for individuals who have served this country for 35 years, including those who have worked in war zones and on the front lines?”
Stressing the urgent need for the government to efficiently manage its finances, especially given the current fiscal challenges, Hon. Salam called for immediate reforms.
