THE Budget Office of the Federation has defended its handling of the appropriation made for the Presidential Economic Advisory Council/Presidential Foreign Intervention Promotion Council (PEAC/PFIPC), insisting that although funds were appropriated by the National Assembly, not a single kobo was released or spent because the statutory conditions required for expenditure were never fulfilled.
News Point Nigeria reports that the clarification was contained in a media statement sent to News Point Nigeria on Friday by the Director-General of the Budget Office of the Federation, Tanimu Yakubu, titled “Appropriation Was Only the First Step.”
Yakubu said the public debate surrounding the council had begun from the wrong premise, stressing that while the National Assembly appropriated funds for PEAC/PFIPC, appropriation alone does not amount to the release or expenditure of public funds.
According to him, an appropriation merely provides legal authority for expenditure but does not constitute a cheque, warrant, Treasury release or cash payment.
He explained that before any public funds can be spent, several statutory institutions must perform their respective responsibilities, adding that if any of the required conditions is not met, the expenditure process automatically comes to a halt.
The Budget Office said the public finance system deliberately separates responsibilities among various government institutions, preventing any single office from creating an agency, approving its establishment, recruiting staff, placing employees on payroll, releasing funds, procuring assets and spending appropriated funds.
According to the statement, the Office of the Head of the Civil Service of the Federation is responsible for establishment and recruitment approvals, while the National Salaries, Incomes and Wages Commission regulates remuneration.
It added that the Budget Office assesses fiscal implications and issues Financial Clearance after statutory conditions are met, while the Federal Ministry of Finance and the Office of the Accountant-General of the Federation handle warrants, cash backing, releases and payments. Capital expenditure, it noted, remains subject to procurement laws.
Yakubu maintained that this division of responsibilities is designed to strengthen accountability, stressing that no single approval is sufficient to move an appropriation from the statute books into an agency’s bank account.
According to him, “In the case of PEAC/PFIPC, the chain never opened.”
The Budget Office further explained that the council’s institutional origins predated the 2026 budget, tracing them to the Presidential Economic Advisory Council inaugurated by former President Muhammadu Buhari on October 9, 2019.
It stated that before the council sought budgetary allocation, the Office of the Accountant-General had already assigned it an administrative budget code, while the Office of the Head of the Civil Service had approved its establishment and granted a recruitment waiver. It also noted that the applicable public service salary structure already existed.
Yakubu stressed that the Budget Office neither created the council nor approved its establishment, assigned its budget code or granted recruitment waivers.
Rather, he said, the office merely relied on official government documents issued by the relevant authorities and performed its statutory responsibility of determining the fiscal implications of the approved establishment.
He disclosed that although the council requested ₦3,850,935,000 as personnel cost, the Budget Office rejected the estimate because it was unsupported.
Instead, the office independently calculated personnel costs using only the approved establishment, recruitment waiver, public service salary structure and established personnel costing methodology.
That exercise, he said, produced a personnel estimate of ₦802,978,783, which became the figure included in the Executive Budget proposal and was subsequently appropriated by the National Assembly.
Yakubu stressed that the amount was not a negotiated compromise with the council nor a reduced version of its request but an independent fiscal determination by the Budget Office.
He said, however, that Financial Clearance—the statutory requirement that must precede recruitment and salary payments—was never issued.
According to him, Financial Clearance serves as the legal gateway through which personnel provisions must pass before recruitment and salary expenditure can commence.
He emphasised that until such clearance is granted, personnel provisions remain mere figures in the budget incapable of creating employment, enrolling workers on payroll or generating salary payments.
Yakubu explained that the Budget Office could not issue Financial Clearance because the necessary statutory conditions remained incomplete.
He noted that although the 2026 Appropriation Bill eventually received Presidential Assent on March 31, 2026, another mandatory requirement was still outstanding.
According to him, the National Salaries, Incomes and Wages Commission had not confirmed that the proposed staffing structure and remuneration complied with approved public service templates and compensation frameworks.
Consequently, he said there was no Financial Clearance, no lawful recruitment, no payroll enrolment and no salary payments.
The Budget Office further clarified that the ₦802,978,783 personnel provision, representing 61.63 per cent of the council’s total appropriation of ₦1,302,978,783, could never have been released directly to the council as cash.
Yakubu explained that under the government’s payroll system, personnel appropriations are paid monthly into the verified bank accounts of duly recruited employees and are never transferred as lump sums to agencies.
He maintained that because no recruitment occurred, no payroll records were created and no salaries became due, “not one kobo” of the personnel allocation could lawfully have been drawn or spent.
“There is no personnel expenditure to recover because there was no personnel expenditure,” he stated.
On the overhead allocation, Yakubu explained that the ₦200 million provision represented 15.35 per cent of the council’s appropriation and was never an automatic annual cash release.
He said overhead funds are released monthly only after Presidential Assent, issuance of Treasury warrants and cash backing by the Federal Ministry of Finance and the Office of the Accountant-General.
The Budget Office revealed that after questions emerged in June 2026 regarding the legal status of the council, it formally notified both the Federal Ministry of Finance and the Office of the Accountant-General to withhold all payment instruments relating to the council.
According to Yakubu, that directive effectively blocked any possibility of overhead releases.
Regarding the ₦300 million capital provision, the Budget Office explained that the allocation was part of standard start-up funding usually made for newly established, reinstated or reactivated public bodies and was intended for basic operational assets.
However, Yakubu noted that capital expenditure is subject to separate statutory requirements, including preparation of procurement plans, approvals by Ministerial Tenders Boards, compliance with the Public Procurement Act, issuance of Certificates of No Objection by the Bureau of Public Procurement where applicable, Treasury warrants, releases and cash backing.
He stated that none of these processes was completed.
According to him, no procurement reached approval stage, no Ministerial Tenders Board approved any transaction, no Certificate of No Objection was issued and no Treasury warrant or cash backing followed.
As a result, he said the capital allocation remained only an appropriation contained in law and never matured into procurement or capital expenditure.
Summarising the entire process, Yakubu stated that each component of the appropriation encountered different statutory safeguards.
He said personnel expenditure stopped at Financial Clearance, overhead expenditure stopped before warrants and cash backing, while capital expenditure stopped before procurement approvals.
He added that the Budget Office independently recalculated personnel costs instead of adopting the council’s unsupported estimates, withheld Financial Clearance because statutory conditions were incomplete and subsequently instructed the Ministry of Finance and the Office of the Accountant-General to suspend every payment instrument after concerns arose regarding the council’s legal status.
According to him, the wider public finance system functioned exactly as designed, preventing payroll activation, overhead releases, procurement activities and Treasury payments.
He maintained that the personnel provision never became payroll expenditure, the overhead allocation never became a lawful cash entitlement and the capital allocation never became procurement or capital expenditure.
“The legal path from appropriation to expenditure was broken at every material point,” the statement said.
Yakubu argued that the episode demonstrates why appropriation should never be confused with expenditure.
He explained that although Parliament may authorise spending through appropriation, actual expenditure remains subject to numerous legal requirements involving multiple government institutions.
According to him, public finance is intentionally built on proof, sequence and divided authority rather than trust alone.
“In the PEAC/PFIPC case, that sequence did not fail. It stopped the expenditure before it began,” he stated.
He described the outcome as evidence of institutional resilience rather than institutional weakness, arguing that the controls prevented public funds from moving instead of attempting to recover them after any loss had occurred.
“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,” Yakubu stated.
Reaffirming the Budget Office’s position, he concluded that not one kobo of the personnel allocation could lawfully have been drawn or was drawn, the overhead provision never matured into a lawful cash release, and the capital provision never became procurement or expenditure because all statutory conditions for spending remained unmet.
He also pledged that the Budget Office would continue to cooperate with every lawful inquiry by providing all records, calculations, correspondence and system evidence necessary to establish the facts.
According to him, public confidence is best served through a clear explanation of what the law required, the actions taken by relevant institutions and why no unlawful expenditure occurred.