The Federal Executive during the Place of business of the Accountant Common of the Federation has mandated all FG-owned Ministries, Areas, and Businesses to remit 5 p.c retention charges deducted from contractors’ bills on the Central Locker of Nigeria.
A memo signed by means of the Accountant Common of the Federation, OluwaToyin Madein, tagged OAGF/CAD/026/Vol.V/896 mentioned the proceed was vital following court cases over non-payment of retention charges by means of MDAs upon of entirety of initiatives by means of contractors.
The memo dated June 27, 2024, was once addressed to the Prominent of Personnel to the President, Femi Gbajabiamila; all ministers, Particular Advisers, Carrier Chiefs, International Missions amongst others, and bought by means of our correspondent on Wednesday.
The PUNCH studies {that a} retention capitaltreasury is a mode of safety supplied for any building promise as restricted safety for the due efficiency of the contractor’s tasks underneath the promise.
On the of entirety of the mission, the contractor will get a proportion of the overall capitaltreasury, and when a last certificates indicating that the contractor has fulfilled all tasks the excess steadiness is paid to him.
The retention capitaltreasury constitutes a 5 according to cent deduction from the overall promise sum saved in a independent account by means of the ministry and paid to the contractor then six months of the of entirety, verification and certification of the mission(s).
Upon of entirety, the contractor applies during the procurement segment of the ministry which later writes to the everlasting secretary for attention and approbation to the Ministry of Finance for fee
In 2022, contractors that experience completed promises with the Federal Ministry of Agriculture and Rural Construction appealed to the ministry and the Federal Ministry of Finance to renew the fee in their retention finances
The ministry later cited a shortage of finances.
Talking within the memo, the OAGF mentioned, “Following the incessant court cases from contractors over non-payment in their retention charges by means of Ministries, Areas and Businesses and extra to the Treasury Circulars, Ref. Nos. OAGF/CAD/026/V.III/116 -TRY/A9&B9/2017, it has transform vital to factor those pointers.
“The 5 p.c (5%) retention charges deducted from contractors’ bills shall henceforth be remitted to the retention charges account domiciled on the Central Locker of Nigeria.
“The aim is to ensure the finances, pending the expiration of the six (6) months condition legal responsibility length, then which the MDA may just follow for the fee of the cash to the contractors).
“MDA shall of their request for fee, get ready and tied a agenda of completed promises as of thirty first December on which retention price has been deducted in form with the related promise pledges, the use of the hooked up structure.
“The finished agenda should be qualified by means of the Accounting Officer and the Director/ Head of Finance and Accounts and forwarded to the Sub-Treasury of the Federation.
“Henceforth, MDAs needs for unutilized finances for fee of retention charges to contractors will not be entertained.
“Furthermore, compliance to the provisions of this circular will henceforth be verified during inspections carried out by the Treasury Inspectorate Department.”