…As Gov Otti opens full box of alleged sleaze against Ikpeazu

• Former governor, PDP kick


From Okey Sampson, Umuahia

The Abia State government early last week released the much-talked about forensic audit probe report of the immediate past administration in the state led by Dr Okezie Ikpeazu.

As a precursor to the release of the forensic report conducted by renowned audit firm, KPMG, Governor Alex Otti, had recently in far away United States, gave a snippet of the report of the probe, alleging that the former Governor Ikpeazu administration paid out N10 billion to a firm for an imaginary and non-existent airport.

The Abia State Commissioner for Information and Culture, Okey Kanu, while releasing the full 359-page report to journalists in Umuahia, disclosed that KPMG was engaged for the job on July 13, 2023.

Part of the audit report had it that N12,800,851,500.00 was paid out to four contractors, “for contracts that do not appear to exist, per available records and discussions with relevant officials.”

The report went further to allege that phony contracts were awarded by the past administration as follows: N10 billion was paid, “to Ferotex on 25th September, 2020, for the construction of Abia State airport.

“Another N2 billion (was paid) on June 6, 2022 and September 1, 2022, to Logistics De-Luke, for the delivery of 22 different brand-new vehicles while N9,279,800,000.00 was paid to seven contractors with no records that the contracts were executed, per schedules of contracts provided and discussions with relevant officials”.

The report (process review covering May 29, 2015 to May 28, 2023.) which was dated March 2, 2024, and signed by KPMG’s partner, Enterprise Risk Services, Saheed Olawuyi, and addressed to Abia State Accountant General, Dr Njum Onyemenam, equally showed that the immediate past government paid the sum of N131,877,519,592.0622 to 231 contractors, through three means, Contractor Finance Facilities, government bank accounts and procuring MDAs, that’s Ministry of Works and ASOPADEC .

While identifying instances where contracts were awarded in total disregard to Section 24 of Abia State Procurement Law and Section 3303 of the Abia State Financial Regulations, KPMG said that it discovered through sample payments of N107,234,358,515.21 of the N131,877,519,592.06, that N15,936,522,309.43 was paid to 6, 324 contractors, “with no supporting documents maintained by the Cash Office, Office of the AG (Accountant General).”

To make good its claim, the auditing firm drew reference to the payment of  N4,000,000,000.00 upfront payments (i.e. 92 per cent of contract value) to Track Care Global Construction for six projects.

The report noted that former Governor Ikpeazu approved 3,535 contracts amounting to N83,382,082,143.10, with no records of evidence in line with the state government’s practice.

It went further to say that the “Ministry of Works awarded N2,831,458,377.40 worth of contracts to Arab Contractors for the ‘Reconstruction of Aba Road, Umuahia from Enugu – Port Harcourt Expressway junction to Railway Crossing at Old Umuahia, without records of competitive bids, contrary to Section 26 (1) of the State’s Procurement Law.”

The report also alleged that the “Ministry of Works awarded N1,418,714,000.00 contract for the Construction of Itukpa to Ossa Ukwu; Mgboko-Obete to Iheorji Road in Obingwa LGA to Gemp Engineering, despite Gemp Engineering submitting bid after the due date of the ITT (Invitation To Tender)”

The report scored the Ikpeazu government 64 per cent on the rate of non-compliance to due process relating to the selection of contractors and award of contracts,

In arriving at this score, the auditors reviewed a sample of 95 contracts (85 contracts valued at N157,344,353,425.87 through tendering and 10 contracts valued N5,000,683,974.00 through direct labour.

In  citing instances of non-compliance to due process, the report took out six MDAs that “did not provide Certificate of No Objection from the Bureau of Public Procurement for 8,232 contracts worth N156,759,362,425.87, contrary to Section 21 (h) and Section 18 (4) of State Public Procurement Law.”

The report equally marked down another six MDAs for not providing record of bid evaluation for 7, 234 of the 85 sampled contracts with a cumulative value of N98,570,680,828.07, contrary to Section 24 of the Abia State Procurement Law and Section 3303 of the Abia Sate Financial Regulations.

On the past administration utilized funds from Federation Accounts Allocation Committee (FAAC), the report has it that Abia earned N468,356,645,293.64, excluding reversals of N28,963,869,442.72, during the eight years of the Ikpeazu administration.

The report noted that out of this total net inflows from FAAC accounts, the immediate past administration allegedly spent N465,991,676,382.39, with a consolidated closing balance of N2,169,406,016.88, as at May 28, 2023.

The auditing firm report had it that an expenditure of  N462,219,772,748.67 comprising loan repayments, inter-account and inter-bank transfers, as well as payments to FIRS, “appear to be legitimate”, but stated that N3,294,788,036.80 (68 payments) paid to MDAs, Government House (and some officials) and contractors, “were without supporting documents and contrary to the expected outflows from the FAAC accounts (inter-account/inter-bank transfers, loan repayments, and contractor finance facilities, CFFs, or bank charges).”

The KPMG report identified, “possible conflicts of interest involving 10 government officials, who are directors in seven companies, saying the said companies benefitted from contracts awards to the tune of N203, 625,000.”

Related News

Abia State Board of Internal Revenue (ASBIR) was not given any clean bill by the audit report.

For instance, the report revealed that ASBIR reported IGR collections of N81,103,735,120.95 instead of N82,610,062,727.79 for the period from June 1, 2015 to May 31, 2023, though the N1,506,327,606.84 not reported was, however, noted in the bank statements.

About three other companies that had dealings with ASBIR were either reported to have short-changed the Board or received payments above the agreed terms.

Citing an instance, the auditing firm listed the sum of N649,787,065.21, it said represented over-payment to a firm, Atolok, which according to the report, was contrary to the appointment letter dated August 17, 2020.

After presenting the report, the Information Commisioner, Kanu said that Governor Otti meant everything he had said about the payment of N10 billion for the non-existent Abia airport and other phony contracts awarded by the past administration.

He was of the view that the release of the forensic report for public view would allow the people of Abia, Nigerians and indeed the world to know the level of the financial malfeasance of the past administration.

Ikpeazu reacts

The man in the eye of the storm, Governor Ikpeazu has reacted to the KPMG’s forensic audit report.

Speaking on the allegation of diverting N10 billion meant for the construction of an airport in Aba, Ikpeazu maintained that someone with executive power at that time, no one could question his decision not to go ahead with the project.

Admitting that the sum of N10 billion was earmarked for the construction of an airport to boost commercial life in Abia, he stated that he changed his mind when he realized it would be more beneficial to use the money to reconstruct roads, which he claimed he did.

“So, we decided to suspend the airport project. Today, when people talk about the money for the airport and all that, it’s as if they are questioning my decision to change my mind and I had the right at that time to say I don’t want this airport now.

“So, I have to agree with the state executives at that time for us to finish some of these roads at the time and am happy that today I finished Eziukwu road, Faulks road, Ngwa road and Osusu road from that fund. You can connect Ariaria through Osusu road to Eziukwu market then to Ngwa road market.

“I succeeded in connecting all the markets courtesy of that fund which were supposed to be deployed for the airport. Thank God that we took that decision because if we had gone ahead with the airport project, N10 billion wouldn’t have done an airport anyway.

“I know about some airports right now that were commissioned that are yet to receive an aero plane, so how will I tie down N10 billion for nothing? I assure you no time was the money diverted,” the former governor stated in a virile video.

Dismissing the allegations that the fund was diverted to about 32 accounts, Ikpeazu insisted that those who received money from the funds were contractors who carried out various projects and that the number were less than 32, that it was in the region of 20.

PDP kicks

Abia State chapter of the People’s Democratic Party (PDP) has kicked against the report of the audit probe.

The Abia PDP Vice Chairman/acting State Publicity Secretary, Abraham Amah, in a statement expressed deep concern and disappointment over what it called the use of language by Governor Otti to drag the former PDP administration of Dr Ikpeazu to the mud.

The PDP said that going by the introductory note of the audit firm, “it is evident to discerning minds that KPMG stated very clearly that it did not conduct an audit, much less, forensic.

“It is essential for the Abia State government to ensure that all audit processes are conducted with utmost transparency and that findings are subject to independent verification to maintain public trust.”

EFCC already asking questions

There is palpable fear in Abia as news filtered out that EFCC operatives are already in town over the allegations.

The Special Adviser to Governor Otti on Media and Publicity, Ferdinand Ekeoma, who confirmed this,  said that despite the denials in some quarters, the anti-graft agency, EFCC, is already asking questions and seeking explanations from government officials and firms that were involved in the alleged plundering of Abia resources.

Ekeoma said that it would not yet be Uhuru for some people until after the anti-graft agency’s investigation on the matter.

VERIFIED: Nigerians (home & diaspora) can now be paid in US Dollars. Earn up to $17,000 (₦27 million) with premium domains. Click here to start