House Probes Non-release of Retention Funds by MDAs

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By Udora Orizu

The House of Representatives at plenary Tuesday, set up an ad hoc committee to investigate why Ministries, Departments and Agencies (MDAs) have held on to retention funds running into billions of naira meant for contractors despite issuing certificates of completion and the expiration of the mandatory defect liability period as prescribed by law.

The resolution was sequel to the adoption of a motion sponsored by Hon. Abubbakar Makki Yalleman.

Moving the motion, Yalleman noted that the practice is inimical to the growth of Small and Medium Scale Enterprises (SMEs) as it denies contractors the needed capital to stay afloat, while part of those funds formed part of the N1.2
trillion the Fiscal Responsibility Commission accused about 122 MDAs of failure to remit in 2020.

He said the House is aware that the global best practice in Retention Fund is to release half of the fund after the issuance of the certificate of completion, while the balance is released upon the attainment of the defect liability
period which is usually 12 months after completion and handover of the projects.

The lawmaker observed that the withheld funds are never captured by MDAs as generated revenues, accounted for, or appropriated in a subsequent budget, while beneficiaries are made to go cap in hand begging and lobbying
for the release of the funds which rightfully belong to them.

He said that the actions of MDAs amount to gross infraction of Section 37(1–4) of the Public Procurement Act, 2007 and its overall objective of harmonizing existing government policies and practices to engender probity, accountability and transparency in the procurement process.

Adopting the motion, the House gave the committee six weeks to investigate and report back for further legislative action.

Meanwhile, the House also resolved to rescind its decisions of July 21 and 23, 2020 committing a Bill to Provide for the Establishment and Management of a National Innovation Agency and a Bill to Repeal the Nuclear Safety and Radiation
Protection Act and Establish the Nigerian Nuclear Regulatory Authority to the Committee on Science and Technology.

The resolution was sequel to the adoption of a motion, sponsored by Hon. Abubakar Hassan Fulata.