PFIPC: No Funds Were Ever Spent By ‘Counterfeit’ Agency, Says Budget Office

The Budget Office of the Federation has defended its handling of the 2026 budgetary allocation to the Presidential Economic Advisory Council/Presidential Foreign Intervention Promotion Council (PEAC/PFIPC), insisting that although funds were approved by the National Assembly, not a single kobo was released or spent because the legal conditions required for government expenditure were never met.

In a detailed statement issued on Friday, the Budget Office said public debate on the matter had confused budget appropriation with actual expenditure.

It explained that the inclusion of an item in the Appropriation Act does not automatically permit government expenditure, as several statutory approvals and financial controls must first be completed.

The statement, signed by the Assistant Director and Head of Information and Public Relations, Afolabi Falilu Olajuwon, argued that the country’s expenditure control system worked exactly as intended, preventing the appropriation from becoming public spending.

“The issue was never merely whether Parliament had appropriated funds. It was whether the law permitted those funds to become expenditure,” the statement said.

According to the Budget Office, government funds can only be released after a number of legal requirements have been fulfilled, including Financial Clearance, lawful recruitment, payroll enrolment, Treasury warranting, cash backing, and, where capital projects are involved, the necessary procurement approvals.

It said none of these conditions was satisfied in the case of PEAC/PFIPC, making it impossible for any payment to be made.

The Office also explained that no single government institution has the authority to move public money from budget approval to expenditure.

It said the Budget Office is only one part of a broader system involving the Office of the Head of the Civil Service of the Federation, the National Salaries, Incomes and Wages Commission, the Federal Ministry of Finance, the Office of the Accountant-General of the Federation, and procurement authorities, each of which performs a separate statutory role before public funds can be released.

According to the statement, these layers of approval exist to protect public funds and ensure that government expenditure follows due process.

The Budget Office also explained how PEAC/PFIPC found its way into the 2026 budget.

It said the Council was not created by the Budget Office and did not receive a budgetary allocation simply because it requested one.

Rather, it traced the Council’s origin to the Presidential Economic Advisory Council established during the administration of former President Muhammadu Buhari and said several official administrative instruments had already been issued by relevant government institutions before preparation of the 2026 budget began.

These included the assignment of an administrative code by the Office of the Accountant-General of the Federation, approval of an authorised establishment and recruitment waiver by the Office of the Head of the Civil Service of the Federation, as well as the existence of an applicable public service salary structure.

The Budget Office maintained that it merely received those official documents and performed its statutory responsibility of calculating their fiscal implications.

The statement disclosed that while the Council submitted a personnel estimate of about ₦3.85 billion, the Budget Office rejected that figure after carrying out its own assessment.

Instead, it independently calculated the personnel requirement at about ₦802.98 million using the approved establishment, recruitment waiver, public service salary structure and the government’s costing methodology.

It said that the lower figure, rather than the Council’s proposal, was included in the Executive Budget and later approved by the National Assembly.

A major reason no money could be spent, according to the statement, was that the Budget Office never granted Financial Clearance.

It described Financial Clearance as the legal stage that allows personnel expenditure to begin, saying that without it there could be no lawful recruitment, payroll enrolment or payment of salaries.

The Office explained that the 2026 Appropriation Bill only became law after receiving Presidential Assent on March 31, 2026.

Before that date, it said, it could only prepare cost estimates and could not lawfully issue Financial Clearance.

Even after the Appropriation Act came into force, another important requirement remained outstanding because the National Salaries, Incomes and Wages Commission had not confirmed that the proposed staffing structure and remuneration complied with approved public service guidelines.

As a result, Financial Clearance was never issued. “There was therefore no Financial Clearance. There was no lawful recruitment. There was no payroll enrolment. There was no salary payment,” the statement said.

The Budget Office also dismissed suggestions that the personnel allocation of ₦802.98 million, representing over 61 per cent of the total appropriation of about ₦1.303 billion, could have been withdrawn by the Council.

It explained that personnel allocations are not paid to government agencies as lump sums. Instead, salaries are paid monthly into the bank accounts of verified employees who have been enrolled on the Federal Government payroll.

Since no workers were recruited and no payroll was created, it said no salary payments became due.

“Not one kobo of the personnel provision could lawfully have been drawn, and not one kobo was drawn,” the statement said.

The Budget Office also explained why the overhead allocation of ₦200 million never became actual expenditure.

According to the statement, overhead allocations are released monthly after Treasury warrants and cash backing have been approved, and the amount released depends on the government’s financial position.

It said that although the monthly provision would have been about ₦16.67 million, actual Treasury releases generally range between 25 and 50 per cent of monthly allocations.

However, the Office said the process came to a halt after legal concerns emerged over the status of the Council in June 2026.

It disclosed that the Budget Office subsequently informed the Federal Ministry of Finance and the Office of the Accountant-General of the Federation to withhold every payment instrument connected with the Council. As a result, the overhead allocation never became available for spending.

The statement also addressed the ₦300 million capital allocation. It explained that the money was intended as a normal start-up provision for a new or reactivated government body and was never a cash award.

The Budget Office said no procurement process ever reached the stage where expenditure could legally occur because no procurement approvals were obtained, no Ministerial Tenders Board approved any transaction, no Certificate of No Objection was issued where required, and no Treasury warrant or cash backing followed. Consequently, no capital expenditure took place.

The Office said the three components of the appropriation were independently stopped by different safeguards within the public finance management system.

It explained that personnel expenditure ended at the Financial Clearance stage, overhead spending ended before Treasury warranting and cash backing, while the capital allocation never progressed beyond procurement requirements.

According to the Budget Office, the entire process demonstrates that Nigeria’s expenditure control framework prevented public funds from leaving the Treasury rather than attempting to recover them after they had been spent.

“The law did not recover money after it had gone. It prevented the money from going,” the statement said.

It added that the episode shows why Nigerians should distinguish between budget appropriation and actual expenditure, noting that government spending is deliberately structured as a sequence of legal approvals involving several independent institutions.

The Budget Office maintained that the controls built into the country’s public finance system successfully prevented any unlawful payment from taking place.

“There is therefore no personnel expenditure to recover. The money never moved because the controls held,” the statement said.

It added that it would continue to cooperate with any lawful investigation into the matter and would make available all relevant records, calculations, official correspondence and other documentary evidence required to establish the facts.