Politics
By Anthony Isibor
THE Budget Office of the Federation has defended its role in the controversial appropriation for the Presidential Economic Advisory Council/Presidential Foreign Intervention Promotion Council, PEAC/PFIPC, insisting that although the National Assembly approved funding for the body in the 2026 budget, no money was released and no public funds were spent.
In a statement issued on Friday, the Director-General of the Budget Office, Tanimu Yakubu, said that the controversy stemmed from a misunderstanding of the difference between appropriation and expenditure, stressing that an appropriation only authorises a potential expenditure and does not amount to a cash payment.
“The public argument has often begun at the wrong point,” Yakubu said.
“The National Assembly appropriated funds for PEAC/PFIPC. That fact is not in dispute. The question is what happened next. Nothing did.”
The Budget Office explained that Nigeria’s public finance system requires multiple statutory approvals before appropriated funds can be spent, with responsibilities shared among several institutions to prevent abuse.
According to the statement, the Office of the Head of the Civil Service of the Federation is responsible for establishment and recruitment approvals, while the National Salaries, Incomes and Wages Commission regulates remuneration.
The Budget Office assesses fiscal implications and issues Financial Clearance, while the Federal Ministry of Finance and the Office of the Accountant-General of the Federation control warrants, releases, cash backing and payments. Capital projects must also comply with the Public Procurement Act.
“The strength of the system lies in this division of labour,” Yakubu said, noting that no single institution has the authority to move an appropriation from the budget into a bank account.
The statement disclosed that the council initially requested for ₦3.85 billion for personnel costs, but the Budget Office rejected the figure and conducted its own independent assessment using the authorised establishment, approved recruitment waiver and applicable public service salary structure.
That assessment reduced the personnel provision to ₦802.98 million, which was included in the Executive Budget proposal and subsequently appropriated by the National Assembly.
Yakubu said that the figure was neither a negotiated compromise nor a reduced version of the council’s proposal, but an independent fiscal determination based on established government methodology.
The Budget Office said that the personnel allocation never progressed beyond the budget because Financial Clearance, a mandatory approval required before recruitment and salary payments can begin, was never issued.
According to the statement, although the Appropriation Bill received presidential assent on March 31, 2026, another key requirement remained outstanding because the National Salaries, Incomes and Wages Commission had yet to certify that the proposed staffing and remuneration complied with the approved public service compensation framework.
Without that certification, the Budget Office said it could not lawfully issue Financial Clearance.
“There was no Financial Clearance. There was no lawful recruitment. There was no payroll enrolment. There was no salary payment,” Yakubu stated.
The Budget Office further explained that personnel appropriations are never released as lump sums to agencies, but are paid monthly through the Integrated Payroll and Personnel Information System to verified employees.
Since no recruitment took place, no employee was enrolled on the payroll and no salaries became due.
“Not one kobo of the personnel provision could lawfully have been drawn. Not one kobo was drawn,” the statement said.
The Budget Office also addressed the ₦200 million overhead allocation contained in the appropriation.
It explained that overhead funds are released only after warrants are issued and Treasury cash backing is provided.
Yakubu revealed that after questions emerged in June over the legal status of PEAC/PFIPC, the Budget Office formally notified the Federal Ministry of Finance and the Office of the Accountant-General of the Federation to withhold every payment instrument relating to the council.
That decision, the statement said, ensured the overhead allocation remained only a legal provision in the Appropriation Act and never became cash available to the council.
Capital allocation never reached procurement
The statement also dismissed suggestions that the ₦300 million capital allocation resulted in any expenditure.
According to Yakubu, the provision was a standard start-up allocation normally included for newly established or reactivated government agencies.
He said no procurement plan was approved, no Ministerial Tenders Board considered any project, no Certificate of No Objection was issued by the Bureau of Public Procurement, and no Treasury warrant or cash backing followed.
As a result, the capital provision never matured into actual expenditure.
Yakubu maintained that the PEAC/PFIPC case demonstrated the effectiveness of Nigeria’s public financial management controls rather than institutional failure.
He said that each category of expenditure encountered separate legal safeguards that prevented public funds from being released.
“The personnel provision stopped at Financial Clearance. The overhead provision stopped before warranting and cash backing. The capital provision stopped before procurement approval and release,” he said.
According to him, what some commentators had described as a weakness in government oversight was, in reality, evidence that Nigeria’s expenditure controls functioned as intended.
“The controls did not discover a loss after the event. They prevented the event,” Yakubu said.
He added that there was therefore no personnel expenditure to recover because no salaries had been paid, no overhead had been released and no capital projects had commenced.
The Budget Office said that it would continue to cooperate with all lawful investigations and provide records, calculations, official correspondence and system evidence required to establish the facts.
“Our public finance system is designed so that appropriation alone does not create expenditure,” Yakubu said.
“Public confidence is best served by a clear account of what the law required, what the institutions did and why no unlawful expenditure arose.”
A.I
July 24, 2026
Tags: Budget Office PEAC/PFIPC Tanimu Yakubu