TSA: Senate directs CBN to terminate contract with SystemSpec

The Senate has directed the Central Bank of Nigeria (CBN) to immediately terminate the 2013 renewal contract with SystemSpecs on the Treasury Single Account (TSA).

The upper chamber of the National Assembly also ordered the CBN to henceforth terminate the renewed contract it entered with Systemspecs in 2013, saying the award was at variance with major terms of agreement contained in the earlier 2011 contract.

It said the termination was necessary in view of the denial by the Office of the Accountant General of the Federation that it knew nothing about the contract.

These resolutions were the aftermath of the adoption of the report of the Joint Committee on Finance, Public Accounts and Banking, Insurance and Other Financial Institutions which investigated the allegation of “payment of N25 billion to Remita” last year.

At its November 11, 2015, plenary, Senator Dino Melaye (Kogi West) had alleged that Systemspecs which he described as Remita, had been paid N25 billion as one per cent charge for the total transfers into the TSA.

However, the just concluded investigation revealed that allegation of N25 billion payment to Systemspecs was untrue. Rather, it found that the total amount of N7.6 billion charge which was refunded on the orders of CBN was meant for the three different groups involved in the transfers with Systemspecs having the lion share following the widest use of its software, Remita.

While presenting the report for Senate’s consideration yesterday, chairman of the joint committee, Senator John Enoh, said the committee acknowledged Systemspecs’ provision of quick solution through the availability of its Remita software for the transfers.

However, he said the organisation should only be paid based on CBN’s approved rate band of between N500 and N700 per transaction for electronic transfer or payments as specified in the revised guideline.

The committee further said the reduction of N7.6 billion to N656.6 million was dictated by what it called the use of “upper end of the approved band of N700.00 per transaction for N937,869 transactions between March 1 and November 30, 2015.”

The committee submitted that it was the 2013 contract renewal which it said contained obnoxious provisions that emboldened Systemspecs to make upfront deduction of one per cent transfer charge before CBN later ordered it to refund it.

It added that the trend was out of tune with acceptable global TSA practice, adding that the charge was above industry rate and in contradiction to the federal government’s war against corruption.

The committee boasted that but for Senate’s prompt intervention, the federal government would have coughed out N25 billion being one per cent charge for N2.5 trillion paid into TSA so far, adding that the space for competition on provision of the transfers’ platform should be opened up by CBN to accommodate more providers for efficiency and effectiveness.

The committee further recommended that all agreed e-collection charges should no longer be borne by ministries, departments and agencies (MDAs) but should rather be provided into a central pool and forwarded to the National Assembly for appropriation in the 2016 budget before eventual disbursement.

It also noted that withholding or diverting funds from consolidated revenue fund (CRF) without the approval of the National Assembly was a gross violation of the 1999 Constitution of the Federal Republic of Nigeria as amended.

The Senate also approved the recommendation that all its standing committees should improve on their oversight function with a view to ensuring smooth implementation of TSA and consequently enhancing the war against corruption.

The parliament also directed its Public Account Committee to as a matter of urgency investigate sources and utilisation of various funds set aside for the implementation of GIFMIS and TSA from the outset with the intention to determine whether funds had been provided for various services being paid for in CBN service agreement.

The Senate also asked the CBN to carry out an in-house inquiry into the TSA contract with a view to sanitising and consequently ensuring that culprits in the transfers were brought to book, adding that the apex bank and commercial banks should refund the deductions that they retained and provide evidence of their compliance to the appropriate Senate committee.

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