The Federal Government has slammed the brakes on the award of unfunded contracts by Ministries, Departments and Agencies (MDAs), directing that no contract should be awarded or financial obligation incurred without prior budgetary approval and cash backing.
The directive, contained in a Federal Treasury Circular dated July 31, 2026, and signed by the Accountant-General of the Federation, Dr Shamseldeen Ogunjimi, is aimed at ending the culture of abandoned projects, strengthening fiscal discipline and enforcing strict compliance with the Public Procurement Act 2007 and other financial regulations.
Addressed to ministers, permanent secretaries, heads of extra-ministerial departments and agencies, accounting officers and federal pay officers, the circular followed what the government described as persistent violations of procurement and public finance rules.
Under the new guidelines, no MDA is permitted to issue letters of award, sign contracts or enter into any financial commitment without first obtaining a Warrant or Authority to Incur Expenditure (AIE) covering the full or committed portion of the contract value.
The government also directed MDAs to attach copies of Warrants or AIEs generated through the Government Integrated Financial Management Information System (GIFMIS) as proof that funds are available before contracts are awarded or payments processed.
To prevent budget overruns, the Accountant-General warned that financial commitments, including purchase invoices and employee payables, must never exceed available warrant balances.
The Bureau of Public Procurement (BPP) was equally instructed to process only applications for “No Objection” certificates backed by valid Warrants or AIEs, effectively shutting the door against procurement requests without funding.
Dr Ogunjimi reminded accounting officers that awarding contracts without budgetary provision, approval and cash backing is an offence under the ICPC Act 2000, warning that violators would be held accountable.
As part of measures to improve budget implementation, all MDAs have also been directed to submit annual and quarterly cash plans for their capital projects to the Office of the Accountant-General, with subsequent quarterly submissions due on or before the 15th day of the first month of every new quarter.
The circular further instructed government institutions to prioritise projects that align with the Federal Government’s policy objectives, while the Cash Management Technical Committee will continue reviewing implementation plans and advising on priority spending.
The latest directive reinforces the Tinubu administration’s revised cash management policy introduced in 2024, as the Federal Government intensifies efforts to eliminate abandoned projects, block wasteful spending, promote transparency and ensure value for money in the execution of public projects.
