The Federal Government has unveil the 23 conditions state must meet in order to access the new bailout fund. The Statement disclosed that 23-point reform agenda called the Fiscal Sustainability Plan (FSP) was unanimously agreed by state governors during the National Economic Council meeting held on May 19 and it encompasses a framework of reform measures which includes.
1. Publish audited annual financial statements within nine months of financial year end.
2. Comply with the International Public Sector Accounting Standards (IPSAS)
3. Publish state budget online annually
4. Publish budget implementation performance report online quarterly
5. Develop standard IPSAS compliant software to be offered to states for use by state and local governments
6. Set realistic and achievable targets to improve independently generated revenue (from all revenue generating activities of the state in addition to tax collections) and ratio of capital to recurrent expenditure
7. Implement targets
8. Implement a centralised Treasury Single Account (TSA) in each state
9. Have quarterly financial reconciliation meetings with federal government to cover VAT, PAYE remittances, refunds on government projects, Paris Club and other accounts
10. Share the database of companies within each state with the Federal Inland Revenue service (FIRS). The objective is to improve VAT and PAYE collection
11. Introduce a system to allow for the immediate issue of VAT/WHT certificates on payment of invoices. Review all revenue related laws and update obsolete rates/tariffs
12. Set limits on personnel expenditure as a share of total budgeted expenditure
13. Biometric capture of all states’ civil servants will be carried out to eliminate payroll fraud
14. Establish efficiency unit
15. Federal government online price guide to be made available for use by states
16. Introduce a system of continuous audit (internal audit)
17. Create a fixed asset and liability register
18. Consider privatization or concession of suitable State-owned enterprises to improve efficiency and management
19. Establish a capital development fund to ring- fence capital receipts and adopt accounting policies to ensure that capital receipts are strictly applied to capital projects
20. Domesticate Fiscal Responsibility Act (FRA) 21. Attainment and maintenance of a credit rating by each state of the federation
22. Federal government to encourage states to access funds from the capital markets for bankable projects through issuance of fast- track Municipal bond guidelines to support smaller issuance and shorter tenures
23. Comply with the FRA and reporting obligations, including: No commercial bank loans to be undertaken by States; Routine submission of updated debt profile report to the DMO.
Speaking on the loan, Minister of finance, Mrs Kemi Adeosun said: “The amount of the loan is N50billion for three months to be shared across the 36 states, including FCT and then N40billion for nine months.
“The idea is to tie states over for a year so that they rebalance, which is an average of about N1.3billion per state for the first three months and N1.1billion for the next nine months. “It is a loan and it is fully repayable although it has a secured tie against future dividends, revenues and any amount that government might owe the states”