FAAC disburses local govts’ January allocation to states

This month, the Federation Account Allocation Committee (FAAC) will not directly disburse statutory monthly allocations to the 774 local governments due to their failure to meet the deadline for submitting account details, sources revealed yesterday. Instead, the local governments’ January allocations will be distributed through the states.
However, the Universal Basic Education Commission (UBEC) and Primary Health Centre (PHC) will receive their funding directly from the Federation Account.
FAAC has allocated N860.252 billion to state governments for January, with N498.498 billion for the states and N361.754 billion for the local governments. A FAAC official, who requested anonymity, explained that the commission transferred the January allocations to the states because the local councils did not fulfill the necessary administrative requirements for direct disbursement.
He said: “The January allocation did not go to the local governments but to their state accounts.
“If they have started submitting their accounts, their February allocations will go to them.
“The January allocation has been paid to the state accounts already. That means they didn’t submit their details on time.
“If the councils can move fast and tidy up the loose ends early, they will get their funds directly from next month.
“That will signal the commencement of their autonomy as desired by the Bola Tinubu administration.’’
Another FAAC official said the Office of the Accountant-General of the Federation (OAGF) and other stakeholders were working hard to address the delays in fully complying with the apex court judgment.
He said: ‘’I learnt the process of creating accounts is what is holding the process, but the Federal Government is determined to make sure that local government autonomy becomes a reality. I can assure you that things are moving in the right direction.’’
To prevent governors from mismanaging council funds, an Inter-Ministerial Committee headed by the Secretary to the Government of the Federation (SGF), Senator George Akume, is developing a framework to enforce the Supreme Court judgment.
According to the official, the template will authorise the Accountant-General of the Federation (AGF) to deduct funds meant for primary education, healthcare, and other constitutional responsibilities of local government directly from FAAC allocations and release them to the relevant agencies.
He said: “They (LGAs) have certain obligations like counterpart funding of Universal Basic Education Commission (UBEC) primary schools, health initiatives, and some other responsibilities where they are supposed to contribute a certain portion.
“Eventually, what will happen is that some of these funds will likely be deducted at source and transferred to those respective agencies.”
The Office of the Accountant-General of the Federation (OAGF) has been working with state governments to help local governments develop a template designed to promote transparency and accountability in the disbursement and use of council funds.
Despite this progress, the efforts of the inter-ministerial committee led by Akume have been hindered by the ongoing budget defense and other pressing responsibilities involving key government officials. However, a source noted that technical members of the committee are still meeting to work on the template.
In May of last year, Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), filed a case with the Supreme Court seeking full autonomy for local governments. Fagbemi called for an end to the unlawful dissolution of democratically elected council officials by governors and asked the court to direct that local government funds from the Federation Account be paid directly to the councils, bypassing the state governments.
Governors, through their Attorneys-General, opposed the suit, but on July 11, 2024, the Supreme Court ruled in favor of granting financial autonomy to the councils. This landmark decision was aimed at reducing the undue control governors have over local government funds and ensuring greater transparency and accountability in financial disbursements.
To implement the ruling, the Federal Government instructed all local governments to open dedicated bank accounts with the Central Bank of Nigeria (CBN) to receive their monthly allocations directly, bypassing state governments entirely and placing control of the funds under the local governments.
Last week, Bello Lawal Yandaki, the national president of the Association of Local Governments of Nigeria (ALGON), reassured stakeholders that there was no cause for concern regarding the delay in the councils opening their accounts. He attributed the holdup to procedural issues within the local governments.
“The CBN is presently awaiting directives from the Federal Government to open local government accounts for the respective states, which can be done within 24 to 48 hours for each,” Yandaki added.