By Tanimu Yakubu
APPROPRIATION WAS ONLY THE FIRST STEP
The public argument has often begun at the wrong point. The National Assembly appropriated funds for the Presidential Economic Advisory Council/Presidential Foreign Intervention Promotion Council, known as PEAC/PFIPC. That fact is not in dispute. The question is what happened next.
Nothing did.
An appropriation is authority in law to make provision for an expenditure. It is not a cheque. It is not a warrant. It is not cash released from the Treasury. Before money can move, other conditions must be met. Different institutions must act. Each must complete its own part. If one condition fails, the chain stops.
That is what happened here. The public finance system does not allow one office to create an agency, approve its staff, place them on payroll, release money, procure assets and spend the appropriation. Those powers are divided. The Office of the Head of the Civil Service of the Federation deals with establishment and recruitment approvals. The National Salaries, Incomes and Wages Commission regulates remuneration. The Budget Office assesses fiscal implications and issues Financial Clearance when the conditions are met. The Federal Ministry of Finance and the Office of the Accountant-General of the Federation control warrants, releases, cash backing and payment. The procurement authorities govern capital expenditure.
The strength of the system lies in this division of labour. No single approval is enough. No single office can carry an appropriation from the statute book into a bank account.
In the case of PEAC/PFIPC, the chain never opened.
THE COUNCIL ENTERED THE BUDGET THROUGH OFFICIAL INSTRUMENTS
Its institutional origins lay in the Presidential Economic Advisory Council inaugurated by President Muhammadu Buhari, GCFR, on 9 October 2019.
The Office of the Accountant-General of the Federation had assigned the administrative budget code that gave the Council its identity within the Federal Government’s budget architecture. Without that code, a spending body cannot be recognised for budgeting, appropriated as a spending unit, or subsequently participate in the expenditure process. An authorised establishment and a recruitment waiver had also been issued by the Office of the Head of the Civil Service of the Federation. The relevant public-service salary structure existed. These instruments predated and stood apart from the Council’s later request for budgetary provision.
The Budget Office did not create the Council. It did not assign the code. It did not approve the establishment. It did not grant the recruitment waiver. It acted on documents issued through recognised Government channels and performed the task for which it is responsible: it measured the fiscal consequence of those approvals.
The Council asked for ₦3,850,935,000.00 as personnel cost. That figure did not form the basis of the Budget Office’s recommendation. The Budget Office disregarded the unsupported estimate and made its own calculation. It used only the authorised establishment, the approved recruitment waiver, the applicable public-service salary structure and the established personnel-cost methodology.
The calculation produced ₦802,978,783.00. That was the amount placed in the Executive Budget proposal and later appropriated. It was not a compromise with the Council. It was not a reduced version of the Council’s request. It was an independent fiscal determination.
FINANCIAL CLEARANCE NEVER ISSUED
Financial Clearance is the gate through which a personnel provision must pass before recruitment and salary expenditure can begin. It is not a courtesy letter. It is the formal confirmation that the fiscal and regulatory conditions for recruitment have been met.
Until Financial Clearance is issued, a personnel provision remains a figure in the budget. It cannot create employees. It cannot place anyone on payroll. It cannot produce a salary payment.
The Budget Office did not issue Financial Clearance for PEAC/PFIPC because the required conditions were incomplete.
The 2026 Appropriation Bill did not become law until Presidential Assent on 31 March 2026. Before assent, the Budget Office could cost the proposal and prepare the Executive Budget. It could not issue final Financial Clearance against a bill that had not become law.
After assent, another requirement remained outstanding. The National Salaries, Incomes and Wages Commission had not confirmed that the proposed staffing and remuneration arrangements complied with its prescribed template and the approved public-service compensation framework. The Budget Office could still estimate personnel cost from the instruments available to it. It could not lawfully open the gate to recruitment while that regulatory confirmation remained outstanding.
The result followed at once. There was no Financial Clearance. There was no lawful recruitment. There was no payroll enrolment. There was no salary payment.
THE PERSONNEL MONEY WAS NEVER AVAILABLE TO THE COUNCIL
The personnel provision was ₦802,978,783.00. It represented 61.63 per cent of the total appropriation of ₦1,302,978,783.00. It has sometimes been spoken of as though the Council could have received the whole amount and spent it at will. That was never possible. Personnel appropriations are not paid to agencies as lump sums. Once all conditions are met, Government pays salaries month by month. The payments go electronically into the designated bank accounts of verified employees enrolled on the Federal Government payroll. The agency does not receive the annual personnel provision as cash under its control.
Even in a lawful and fully completed process, PEAC/PFIPC would not have received ₦802,978,783.00 in one payment. The money would have moved over twelve months to individual employees whose appointments, identities and payroll records had been verified. None of that happened. 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 OVERHEAD PROVISION NEVER BECAME A CASH ENTITLEMENT
The overhead provision was ₦200,000,000.00, or 15.35 per cent of the “fake agency’s” appropriation. It was not payable as one annual release. Overhead is released monthly after assent to the Appropriation Act and only when the Treasury issues the required warrant and provides cash backing.
In June 2026, questions arose about the legal status of the Council. The Budget Office then formally notified the Federal Ministry of Finance and the Office of the Accountant-General of the Federation to withhold every instrument that could support payment. That instruction closed the remaining route to an overhead release.
The figure in the Appropriation Act therefore remained a provision in law. It did not become money placed at the disposal of the Council.
THE CAPITAL PROVISION NEVER REACHED PROCUREMENT
The capital provision of ₦300,000,000 formed part of the standard start-up provision made for new, reinstated or reactivated public bodies. It was meant for basic operational assets. It was not an automatic cash award.
Capital expenditure has its own gates. A lawful procurement plan must be prepared. The appropriate Ministerial Tenders Board must consider the proposal. The Public Procurement Act must be followed. Where the applicable threshold requires it, the Bureau of Public Procurement must issue a Certificate of No Objection. After that, the expenditure must still be warranted, released and cash-backed by the Treasury. None of those steps 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 capital provision remained what Parliament had enacted: an appropriation subject to law. It never became capital expenditure.
THE CONTROLS HELD
When the three provisions are placed side by side, the record is plain. The personnel provision stopped at Financial Clearance. The overhead provision stopped before warranting and cash backing. The capital provision stopped before procurement approval and release.
Each part met a different safeguard. Each safeguard held.
The Budget Office made its own personnel calculation instead of adopting the Council’s unsupported request. It withheld Financial Clearance when the conditions were incomplete. When doubts later arose about the legal status of the Council, it asked the Federal Ministry of Finance and the Office of the Accountant-General of the Federation to stop all payment instruments.
The wider system then did what it was built to do. Payroll was never activated. Overhead was not converted into an annual cash release. Procurement did not commence. Treasury instruments did not mature into payment.
The consequence was not theoretical. It can be measured. The ₦802,978,783.00 personnel provision never became payroll expenditure. The ₦200,000,000.00 overhead provision never became a cash entitlement. The ₦300,000,000.00 capital provision never became procurement or capital expenditure. The legal path from appropriation to expenditure was broken at every material point.
THE BROADER LESSON
This matter shows why appropriation and expenditure must not be confused. Parliament may authorise a provision. That authority still remains subject to the law. Public money moves only after every institution in the chain has done its work and every condition has been met.
The system is designed this way because public finance cannot rest on trust alone. It rests on proof, sequence and divided authority. One office may issue an establishment instrument. Another may approve recruitment. Another may regulate pay. Another may grant Financial Clearance. Another may issue a warrant. Another may release and cash-back the payment. Procurement must pass through its own legal process.
In the PEAC/PFIPC case, that sequence did not fail. It stopped the expenditure before it began.
What has been described in some quarters as institutional weakness is better understood as institutional resilience. The controls did not discover a loss after the event. They prevented the event. They did not chase money after it had gone. They kept it from moving.
The conclusion is firm. Not one kobo of the personnel provision could lawfully have been drawn, and not one kobo was drawn. The overhead provision never matured into a lawful cash release. The capital provision never matured into procurement or expenditure. The conditions required for spending were not met and were not close to being met.
There is therefore no personnel expenditure to recover. The money never moved because the controls held.
The Budget Office of the Federation will continue to cooperate with every lawful inquiry and will provide the records, computations, correspondence and system evidence required to establish the facts. Public confidence is best served by a clear account of what the law required, what the institutions did and why no unlawful expenditure arose.
*Tanimu Yakubu is the Director-General, Budget Office of the Federation
