Date: 2016-06-21

All things being equal, the Kwara State Government is likely to access its share of Federal Government's 90b naira loan to states to offset outstanding salary arrears of workers.

An informed source confided in The Herald yesterday that the State Government may access the loan at the end of this month. The source said when accessed, the loan will be used purely to offset the outstanding salaries of state government workers.

The Herald further learnt that the expected loan from the Federal Government does not cover local government workers in the state. The source hinted that efforts were still on to get the N5b bailout fund for the salaries of local government workers.

Efforts to reach the state Commissioner for Finance, Alhaji Demola Banu to comment on the issue failed, but the source said the state government was fine tuning the spelt out conditions laid down by the Federal Government to enable it access the loan by the end of the month.

It would be recalled that the Federal Government recently announced N90b for states in the federation to enable state governments offset the backlog of salary arrears owed workers.

Meanwhile, the federal government says it will grant a 90 billion Naira loan to the 36 states of the federation. The loan, according to it, will cover a period of one year. However, the loan will be extended to the state governments after they meet 22 stringent conditions put together by the Federal Government under the Fiscal Sustainability Plan.

Addressing journalists at a meeting held with states' commissioners of finance, the Minister of Finance, Mrs Kemi Adeosun, said that the loan is in two tranches of 50 billion Naira for three months and 40 billion naira for nine months. The conditions to be met by benefiting states included the following:

1. Publish audited annual financial statements within 9 months of financial year end.

2. Introduction and compliance with the International Public Sector Accounting Standards (IPSAS).

Publish State budget online annually.

3. Publish budget implementation performance report online quarterly.

4. Develop standard IPSAS compliant software to be offered to States for use by State and Local Governments.

5. Set realistic and achievable targets to improve independently generated revenue (from all revenue generating activities of the State in addition to tax collections) and ratio of capital to recurrent expenditure.

6. Implementation of targets Implement a centralized Treasury Single Account (TSA) in each State.

7. Quarterly financial reconciliation meetings between Federal and State Governments to cover VAT, PAYE remittances, refunds on Government projects, Paris Club and other accounts.

8. Share the database of companies within each State with the Federal Inland Revenue Service (FIRS). The objective is to improve VAT and PAYE collection.

9. Introduce a system to allow for the immediate issue of VAT / WHT certificates on payment of invoices.

10. Review all revenue related laws and update of obsolete rates / tariffs. Set limits on personnel expenditure as a share of total budgeted expenditure.

11. Biometric capture of all States' Civil Servants will be carried out to eliminate payroll fraud.

12. Establishment of Efficiency Unit.

Federal Government online price guide to be made available for use by States.

13. Introduce a system of Continuous Audit (internal audit).

14. Create a fixed asset and liability register.

15. Consider privatization or concession of suitable State owned enterprises to improve efficiency and management.

16. Establish a Capital Development Fund to ring-fence capital receipts and adopt accounting policies to ensure that capital receipts are strictly applied to capital projects.

17. Domestication of the Fiscal Responsibility Act (FRA).

18. Attainment and maintenance of a credit rating by each State of the Federation.

19. Federal Government to encourage States to access funds from the capital markets for bankable projects through issuance of fast- track Municipal bond guidelines to support smaller issuances and shorter tenures.

20. Full compliance with the FRA and reporting obligations, including;

21. No commercial bank loans to be undertaken by States;

22. Routine submission of updated debt profile report to the DMO.