Judul : Auditor-General Condemns CBN Over Recycled N29.7bn Dirty Notes
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Auditor-General Condemns CBN Over Recycled N29.7bn Dirty Notes
The Federation's Auditor-General's Office has alleged that the Central Bank of Nigeria, during the tenure of former Governor Godwin Emefiele, re-circulated contaminated and unsuitable banknotes worth N29.77 billion, breaching the central bank's own Clean Note Policy.
The claim is outlined in the recently published Auditor-General’s Annual Report on Non-Compliance and Internal Control Weaknesses in MDAs for the fiscal year ending December 31, 2022. The report explained that multiple CBN branches distributed banknotes that had been marked as "Counted Audited Dirty," a classification indicating that these notes had been officially processed and declared unsuitable for circulation.
As per the audit report, the CBN distributed the invalidated notes through its branches in Abuja, Lagos, Bauchi, and Jos between April and December 2022. The Abuja branch issued the majority of the re-circulated notes, with N28.615bn released between October and December 2022.
The Lagos office distributed N970m in December 2022, whereas Bauchi released N30m in April of that year. The Jos branch issued N50m and N100m on May 16 and May 27, 2022, respectively.
The report mentioned, “Auditors found that N29,765,000,000.00 worth of dirty banknotes that had been counted and audited were reintroduced into the system by the Central Bank of Nigeria,” highlighting that this action violated the Clean Note Policy Version 0.1 (2018), which specifies that only verified fit notes can be released for circulation, while unfit notes should not be distributed by the CBN or commercial banks.
The audit team linked the breach to flaws in the CBN's internal control mechanisms. It cautioned that the improper distribution of soiled notes might lead to reputational harm for the nation and decrease the lifespan of the currency.
In reply, the CBN provided different justifications for the violation at the affected branches. The Abuja branch attributed the issue to the COVID-19 pandemic, stating that the lack of cash during that period compelled the bank to distribute soiled notes to "address cash shortages."
The Bauchi branch refuted the claim of distributing faulty notes, whereas the Jos branch stated that the release was due to military cash requirements during times of increased instability. The Lagos branch explained its actions as a response to higher cash demand during the Christmas period.
Nevertheless, the Auditor-General dismissed all justifications, labeling them "unsatisfactory." The report stated that the findings would stay in effect until the CBN took necessary actions.
It subsequently suggested that the Governor of the CBN should be called before the Public Accounts Committees of the National Assembly to explain the violations. If such an explanation is inadequate, it recommends the imposition of penalties as outlined in the Financial Regulations, which outline consequences for serious misconduct by public servants.
The PUNCH noted that the reissue of soiled banknotes occurred alongside the CBN's contentious naira redesign initiative, which was declared on October 26, 2022. The quick implementation led to a countrywide shortage of cash, legal conflicts, and ultimately, a Supreme Court decision that prolonged the acceptability of old notes after the deadline had expired.
The audit report also pointed out another issue regarding the delayed disposal of unfit banknotes. It was found that 997 boxes containing N10 notes worth N99.7 million, which had been declared unsuitable since November 2021, were still stored in the vault as of October 2023.
Additionally, 695 boxes containing N500 notes worth N3.475bn, which were handled between October and November 2022, remained undestroyed. Altogether, N3.57bn in rejected banknotes had gathered as a result of delays in the briquetting and disposal procedures.
The audit highlighted that the delay posed risks of theft, loss of public money, and inefficiency within the bank's currency management system. The CBN stated that briquetting operations had begun and the destruction of the notes was in progress, but the auditors again dismissed this explanation and upheld their conclusions.
The disclosures increase the attention on Emefiele's management of the CBN. The former head, who is currently dealing with multiple allegations of corruption and misuse of authority, has been consistently charged by government officials with violating financial rules while in office.
Even though the audit report does not specifically accuse him, it holds the CBN leadership accountable for breaching cash management procedures and neglecting adequate internal controls during that time.
Nevertheless, the Federal Government, via the Economic and Financial Crimes Commission and the Office of the Attorney-General of the Federation, is pursuing Emefiele in various courts, including a significant 19-count fraud case in Lagos and an updated 20-count procurement case in Abuja.
Emefiele is also facing multiple corruption and foreign exchange allocation charges that are under consideration by both the Federal High Court and the FCT High Court. The audit body suggested that the National Assembly should call CBN officials to account for the violations.
The PUNCH, in an article earlier in April 2023, noted that bank employees and clients expressed dissatisfaction with the quality of the old naira notes that were reintroduced into use by the CBN, as the new notes continued to fade from circulation.
As per the PUNCH report, bank clerks who hand out cash to clients, and employees in bulk areas who gather significant cash deposits from customers, were worried that soiled, damaged bills might transmit illnesses.
Provided by SyndiGate Media Inc. (Syndigate.info).Demikianlah Artikel Auditor-General Condemns CBN Over Recycled N29.7bn Dirty Notes
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