FAAC orders recovery, redistribution of N101b from Customs Acct, GTB, Globus, Nova, Taj Banks affected

The audit report was prepared by OOM Professional Services, a Lagos-based audit firm contracted by the Forum of Commissioners of Finance to conduct a forensic review of NCS remittances into the Federation Account for the 2022–2023 fiscal year.

The findings, presented during FAAC’s plenary on May 16, 2025, and reinforced at a stakeholders’ meeting in Abuja on July 10, revealed two major irregularities: ₦82.04bn in Import VAT was wrongly classified and posted as Import Duty and ₦19.13bn in Federation Account revenue was erroneously paid into the Federal Government’s Consolidated Revenue Fund (CRF).

Four commercial banks; Guaranty Trust Bank, Globus Bank, Nova Merchant Bank, and Taj Bank were identified as having wrongly posted VAT receipts into the Federation Account.

“The sum of ₦82,037,823,474.76 being Import VAT was erroneously treated as Import Duty,” the FAAC document noted, adding that this misclassification disproportionately favored the Federal Government, depriving states and local governments of their rightful share under the VAT distribution formula.

In contrast, Import Duties are shared vertically, with the Federal Government receiving the lion’s share, while VAT revenues are shared under a formula that prioritizes sub-national governments.

Further review revealed that of ₦22.05bn classified as CRF revenue, only ₦2.92bn was actually due to that account. The remaining ₦19.13bn, comprising Import Duty, Excise, and other charges, should have gone into the Federation Account for equitable distribution.

“This has significantly reduced what sub-nationals should have received, based on the applicable sharing formula,” the report stated.

In light of the audit, FAAC has ordered: Immediate recovery of the ₦82.04bn and redistribution using the VAT formula and recovery of the ₦19.13bn from the CRF and redistribution using the vertical sharing model.

Recalculation of cost of collection allowances due to the NCS, FIRS, and North-East Development Commission, which were previously inflated based on the misallocated revenue.

The Office of the Accountant-General of the Federation (OAGF) was tasked with recalculating and disbursing the corrected amounts.

Beyond misclassification, the report highlighted persistent delays by commercial banks in remitting funds collected on behalf of Customs.

“In several instances, remittances took weeks or months, in clear violation of financial regulations,” the committee stated.

Such delays created cash flow uncertainty for sub-national governments and distorted monthly revenue projections.

Although Customs has not officially commented on the audit, sources say stakeholders at the July meeting including Customs, FIRS, CBN, and FAAC representatives unanimously accepted the auditor’s findings.

The committee concluded with an appeal for the prompt payment of consultant fees, citing the importance of transparency and accountability in public finance management.

When contacted by this newspaper, NCS spokesperson Abdullahi Maiwada said he was unaware of the development and declined to comment.

According to FAAC figures, NCS remitted ₦359.42bn to the Federation Account in May 2025, accounting for 16.56% of the month’s total revenue.

Other revenue contributors included: Federal Inland Revenue Service (FIRS): ₦1.14tn (52.73%) and NUPRC/Ministry of Petroleum Resources: ₦615.13bn (28.33%)

With the audit findings now public, pressure is mounting on the Federal Government and Customs to act swiftly to restore confidence in the federation’s revenue-sharing system and protect the rights of states and local governments.