The Agency Without a Budget
A state government has created the Baro Agro-Processing Agency by law to run a N4.2 billion cassava processing plant. The seven-member board is chaired by a former commissioner; the CEO was appointed by the governor; the permanent secretary of the ministry of agriculture insists that all contracts above N50 million must be cleared by the ministry. The board approved a N480 million consultancy for a feasibility study without a Bureau of Public Procurement certificate or competitive tender. The agency also receives a World Bank grant whose agreement requires international competitive bidding and no-objection from the bank. The auditor-general has queried the consultancy, staff salaries are three months overdue, and board minutes for the last four meetings cannot be found. The World Bank has suspended disbursement. The governor's adviser on governance asks for a review before the election in eight months.
1. Map accountability among the board, CEO, ministry and governor, and identify the governance defects.
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Accountability map: The establishing law is the starting point. The board is accountable for strategy, oversight and assurance; the CEO is the accounting officer for day-to-day management and contract execution; the ministry sets policy and represents the government's shareholder interest, but should not micro-manage approved budgets. The governor appoints the board and CEO but should not bypass the law. The donor's grant agreement creates separate accountability to the World Bank.
Defects: (1) No clear delegation threshold between board, CEO and ministry, which allowed the N480 million consultancy to proceed without a documented route. (2) Procurement and donor rules were ignored. (3) Missing minutes destroy the accountability trail. (4) Salary arrears and the auditor-general's query suggest weak financial management. (5) Political transition risk is high because the agency's records are incomplete.
Advice: Produce a governance charter and delegation matrix, reconstruct the board record, and separate policy oversight from operational approvals. The ministry's permanent secretary should sit on a supervisory committee, not approve individual contracts outside the law. The board should report quarterly to the governor and legislature on performance and compliance.
2. Advise on the N480 million consultancy and the World Bank suspension.
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The consultancy: The board should suspend further payments, obtain the procurement file, check whether a Bureau of Public Procurement review or certificate of no objection was required, and assess whether the consultant delivered value. If the contract was awarded without due process, the board should consider termination or renegotiation, recovery of funds and referral for investigation. A board resolution cannot convert an unlawful award into a compliant one.
The World Bank: The agency should notify the bank promptly, share the audit trail and propose a corrective action plan. The bank's no-objection requirement is a condition of disbursement, not a formality. Concealment would risk debarment and reputational damage beyond this project.
Reasoning: The agency faces three audiences with different rules: the state procurement law, the donor agreement and the auditor-general. The response must satisfy all three. The board should appoint an independent reviewer, protect staff who report pressure, and report findings to the governor and the bank. If the consultancy was politically directed, the board should document that fact rather than absorb blame collectively.
3. Recommend reforms to strengthen governance before the election.
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Board and committees: Adopt a skills matrix and appoint at least two members with finance, procurement or donor-fund management experience; clarify that board members are not party representatives. Establish an audit and risk committee with an independent chair, and an internal audit function reporting to it.
Controls: Create a procurement unit with segregation of duties, a contract register, a threshold matrix and donor no-objection checkpoints. Reconcile payroll and clear salary arrears with a transparent plan. Require minutes to be signed within 14 days and kept at a single registry.
Reporting and transition: Require quarterly performance and compliance reports to the ministry, the governor and the legislature. Prepare a transition briefing for incoming officials after the election, including contracts, liabilities and donor commitments. Adopt a whistleblowing policy and a code of conduct for board and staff. The test is whether the reforms survive a change of government; that requires statutory backing and published records, not just a new board resolution.