By Clement T. Ofuani
TUE, OCTOBER 10 2017-theG&BJournal-For some time now, there has been a buzzword “virement” in our national discuss. Few people outside the public service have an understanding of what the word means and why it should become another source of continuing friction between the National Assembly and the Presidency. To be fair, the same friction on the same subject matter exists to varying degrees at the state level.
In writing this piece, I notice that there is a red squiggle beneath the word “virement” indicating that Microsoft Word does not recognize it as a valid English word. To make matters worse, few Standard Dictionaries of the English Language recognize it. So, what really is “virement”?
A quick internet search throws up a definition of virement as “an administrative transfer of funds from one part of a budget to another. Collins English Dictionary.Copyright © HarperCollins Publishers. Word origin of ‘virement’ from French, from Middle French: act of turning, from virer to turn.” This has only provided a little guide on the matter therefore; I will attempt an explanation that may provide a clearer picture.
In the civil service, there is a provision in the Financial Regulations that allows for Virement Warrants to be issued by the Minister of Finance or Commissioner for Finance at the State level to transfer appropriations from one subhead to another under the same headof expenditure. This is in line with the Collins English Dictionary definition of Virement as “an administrative transfer of funds from one part of a budget to another.” However, there are clear criteria to be met before the virement warrant can be issued and these include the fact that the project or programme budgeted for must have been executed and a surplus declared or that the project or programme budgeted for is no longer necessary. The second condition is subjective and therefore requires very stringent guidelines, one of which is that it cannot be budgeted for again in subsequent budgets. If the project or programme is no longer necessary, it will only mean that the problem that it sought to solve has been solved.
Virement as an administrative action had been part of our public service regulations up until some years into the current democratic dispensation, when lawmakers began to query it having discovered that the executive arm of government was not using the procedure in strict compliance with the criteria. They therefore saw the abuses of virement as a mechanism used by the executive to undermine and in some cases, alter the appropriation as passed by the legislature.
To be clear, the appropriation Act or Law at the State level typically authorizes the President or the Governor to spend not more than a stated amount under various heads of expenditures and since the virement warrant is used to transfer funds from one subhead to another under the same head, it is not strictly speaking, a breach of the appropriation law which would have become a ground for impeachment. Nonetheless, the legislative arm was dissatisfied with the use of virement and sought to curtail it.
Given that the Constitution gives oversight powers to the legislature on any matter on which they have power to legislate, what they needed to do was establish the abuses by virements that did not meet the strict criteria prescribed by the Financial Regulations and deal with the abuses to impose strict financial discipline on the executive arm. But as has become typical with the management of Nigeria’s affairs, the legislature sought a simplistic answer which was to pass a law requiring the executive to seek legislative approval for all virements. Here is the problem. As an administrative action, the executive does not need to seek approval from the legislature. In what form is the legislative approval to be obtained given that the President or Governor is required to send only bills to the legislature for passage as law once assented to by the chief executive?
The request for virement approval sent by the presidency to the National Assembly which is the current subject of wrangling between the two arms of government is not a bill and the National Assembly cannot turn it into an Act to be executed by the executive. If the National Assembly gives the requested approval without passing it as a bill to be assented to by the President, the approval becomes at best a legislative resolution which is not constitutionally binding on the executive. Therefore the Act requiring the executive to seek legislative approval for virements has simply introduced a conundrum into public financial management and as usual, it is the masses that become the proverbial grass that suffers, when two elephants fight.
The Presidency insists that the National Assembly should give approval for the virement request but it is clear that the criteria set for virements as an administrative action have not been met by the executive and therefore the request is in itself an abuse of appropriation with the intention of undermining the Act passed by the National Assembly. On the other hand, the National Assembly insists that the Presidency should send the request as a supplementary bill which is legally sound but given that there is no extra fiscal revenue to support a supplementary budget request, the National Assembly is being clever by half having convinced the President to assent to the bill it passed with a gentleman’s agreement that necessary adjustments would be accommodated subsequently with virement as usual.
The above is a snapshot of the ignorance surrounding the management of Nigeria’s economy by those elected to do so. It is a crying shame.
Clement T. Ofuani is the DIRECTOR GENERAL, DELTA STATE CAPITAL DEVELOPMENT AGENCY, ASABA