By Bassey Udo
The Budget Office of the Federation has explained why the controversial N1.3billion appropriation in the 2026 Appropriation Act approved by President Bola Tinubu for the fake Presidential Economic Advisory Council/Presidential Foreign Intervention Promotion Council (PEAC/PFIPC) failed.
The Office, which clarified its role in the entire saga, said said in a statement on Friday that although the National Assembly appropriated the funds in the budget for the fake agency, the allocation was yet to become an expenditure item, as it did not complete the full cycle of the legal process to secure final clearance.
Arguing that the appropriation was never an expenditure, the statement said the appropriation of the funds was only the beginning of a legal process to becoming an approved expenditure item in the budget.
“Public money does not move because a figure appears in an Appropriation Act. It moves only when the conditions prescribed by law have been met. Those conditions include Financial Clearance, lawful recruitment, payroll enrolment, Treasury warranting, cash backing and, where capital expenditure is involved, the required procurement approvals,” the statement said.
The statement noted that none of those conditions arose in the case of PEAC/PFIPC, adding that between appropriation and expenditure lies a chain of controls, with each link assigned to a different institution, with the Budget Office being one part of that chain.
The other institutions in the approval chain, the statement said, include the Office of the Head of the Civil Service of the Federation, which is authorized to give approval for the establishment of the agency and the recruitment of staff; the National Salaries, Incomes and Wages Commission for the regulation of the workers’ remuneration; the Federal Ministry of Finance and the Office of the Accountant-General of the Federation for control warrants, releases, cash backing and payment, with the procurement authorities governing capital spendings.
Clarifying that no one institution can handle the disbursement of public funds from appropriation to expenditure, the Budget Office pointed out that each institution allowed by law to handle control must hold before the next stage can open.
“That institutional division of responsibility is the safeguard upon which the integrity of the expenditure-control system depends”, the Budget Office stated, adding that this was the safeguard that stalled the PEAC/PFIPC case.
How the Fake Council’s Appropriation Got into the 2026 Budget
Tracing how the fake Council’s Appropriation got into the 2026 Budget, the Budget said the Council, which was inaugurated as the Presidential Economic Advisory Council during the late President Muhammadu Buhari administration has been in existence since then.
By the time preparation for the 2026 Budget began, the Budget Office said official instruments had already been issued by the institutions charged with those functions.
While the Office of the Accountant-General of the Federation assigned an administrative code to the fake agency, the Budget Office said the Office of the Head of the Civil Service of the Federation had approved an authorised establishment and a recruitment waiver, and the applicable public-service salary, based on existing structure, was approved by the Salaries and Wages Commission.
“These instruments did not come from the Budget Office. They came to it. The Budget Office did not create the Council. It did not assign its code. It did not approve its establishment. It did not grant its recruitment waiver. It received official instruments and did what the law required of it: it measured their fiscal effect,” the statement said.
Following the issuance of the relevant budgeting instruments, the statement said the Director General of the Council later submitted a personnel estimate of ₦3.85billion, which did not form the basis of the Budget Office’s recommendation.
Consequently, the statement said the Budget Office disregarded the estimate submitted by the DG of the Council, opting for an independent calculation using the authorised establishment, the approved recruitment waiver, the applicable public-service salary structure and the extant costing methodology, which reduced the requested estimate to about ₦802.978million, based on its fiscal judgment.
Although the new estimate was captured as personnel provision for the Council in the Executive Budget proposal and later appropriated, the Budget Office said the final clearance for it to be confirmed as an expenditure that met the fiscal and regulatory conditions for recruitment was not given for the staff to be created, payroll opened and salary produced.
“The Budget Office did not issue Financial Clearance for PEAC/PFIPC because the conditions were incomplete,” the statement said.
Since the 2026 Appropriation Bill was yet to become law pending the Presidential Assent on March 31, 2026, the Budget Office said it was impossible to either cost the proposal or grant final Financial Clearance against a bill that had not yet become law.
Following the presidential assent of the Act, the Budget Office said the National Salaries, Incomes and Wages Commission had not confirmed the proposed staffing and remuneration arrangements in line with its prescribed template and the approved public-service compensation framework, thereby not allowing the calculation of the cost and issuance of the final clearance.
“There was therefore no Financial Clearance. There was no lawful recruitment. There was no payroll enrolment. There was no salary payment,” the statement said.
Despite the provision of ₦802.978million for personnel, representing 61.63 percent of the total appropriation of ₦1.303billion, the Budget Office said the Council could not have received the whole amount and spent it at will.
“Personnel appropriations are not paid to agencies as lump sums. After every legal condition has been met, salaries are paid month by month. The money moves electronically into the designated bank accounts of verified employees enrolled on the Federal Government payroll.
“The institution does not receive the annual personnel provision as cash under its control. Even in a lawful process, the Council would not have received ₦802,978,783.00 in one payment. The money would have gone over twelve months to individual employees.
That process never began. No Financial Clearance was issued. No recruitment took place. No payroll record was created. No salary became due.
“Not one kobo of the personnel provision could lawfully have been drawn. Not one kobo was drawn. There is no personnel expenditure to recover, because there was no personnel expenditure,” the statement said.
On overheads, the statement said the provision of ₦200million, or 15.35 percent of the total appropriation, was not payable as one annual sum, as it is usually released month by month after assent, and only when the Treasury issues the required warrant after the provision of cash backing.
The statement said the annual figure provisioned for overhead translated to ₦16.67million a month, adding that during the period under review, the Treasury generally released between 25 and 50 percent of the monthly provision, which translated to an average of N4.17million and ₦8.33million, depending on the government cash position.
However, the statement said in June 2026, following the expression of doubts by some agencies about the legal status of the Council, the Budget Office formally notified the Federal Ministry of Finance and the Office of the Accountant-General of the Federation to withhold every instrument that would support the disbursement of the appropriated funds.
The instruction, the statement said, closed the route for the ₦200million to become money in the hands of the Council.
Besides, the Budget Office said he capital provision of ₦300million, representing 23.02 per cent of the total appropriation, as a standard start-up provision for new, reinstated or reactivated public bodies for basic operational assets, was not a cash backed.
Approval for capital expenditure, the statement said, usually follows a procurement plan, in line with the appropriate Ministerial Tenders Board must act and the Public Procurement Act threshold required before the issuance of a Certificate of No Objection by the Bureau of Public Procurement based on approved expenditure warranted, released and cash-backed.
“None of these stages was completed. No procurement reached the point at which expenditure could arise. No Ministerial Tenders Board approved a transaction. No Certificate of No Objection was issued. No warrant followed. No Treasury cash backing followed,” the statement said.
