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ABIA GOVERNMENT PROBE: See Full Document of KPMG Report

May 14, 2024

After weeks of speculations and war of words between the Media Aides of the incumbent Gov. Alex Otti, and his predecessor, Dr Okezie Ikpeazu, Abia State Government, has finally released the much-expected forensic audit report of Ikpeazu’s administration.

See full Report Below

Provision of Process Review Services

Abia State Government (“ABSG”)

Project Azumini – Final Report of Factual Findings Period covered – 29 May 2015 to 28 May 2023

KPMG Advisory Services

March 2024

This report contains 359 pages

Abia State Government

Provision of Process Review Services Project Azumini – Final Report of Factual Findings March 2024

The Executive Governor,

Government House, Umuahia

Abia State

Nigeria

2 March 2024

Attention: Dr. (Mrs.) Njum Onyemenam (FCA), Accountant General, Abia State Dear Madam,

Final Report: Provision of Process Review Services to Abia State Government

Please find attached an electronic copy of our final report of factual findings on the Provision of Process Review Services to Abia State Government (“ABSG” or “the State”) covering the period from 29 May 2015 to 28 May 2023. This report has been prepared in accordance with the engagement letter dated 13 July 2023.

If you require any clarification on the report, please do not hesitate to contact the undersigned on 0803 403 5542 or saheed.olawuyi@ng.kpmg.com or Bright Anyanwu on 0802 816 271 6244 or bright.anyanwu@ng.kpmg.com or Omolola Abioye on 0806 439 5462 or omolola.abioye@ng.kpmg.com.

We thank you for the opportunity to be of service to you on this important assignment and we look forward to working with you again in the future.

Yours faithfully,

Saheed Olawuyi

Partner, Enterprise Risk Services

© 2024 KPMG Advisory Services, a partnership registered in Nigeria and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

Document: KPMG Confidential

Abia State Government

Provision of Process Review Services

Project Azumini – Final Report of Factual Findings

March 2024

Restriction on Distribution of the Report This final report is intended for the use of the Abia State Government (“ABSG”) and should not be used for any other purposes. This report may contain legally privileged and confidential information. No part of the content may be quoted, referred to or disclosed, in whole or in part, without KPMG’s prior written consent. Nothing in any part of this report shall preclude or subject to any limitation whatsoever the release of the report / communication by ABSG to any law enforcement or court of law to whose control ABSG is subject, or becomes subject, provided that KPMG shall accept no responsibility or liability to such agency of government in connection with their use of the report. ABSG acknowledges that KPMG to the fullest extent possible shall not assume any liability whatsoever to any third-party recipient of this report or any other person or authority whomsoever under any circumstances whatsoever, irrespective of whether KPMG has consented to the disclosure of this report to such a third party. ABSG shall indemnify and hold KPMG harmless against any claim, litigation fee, cost, expenses, or liability relating to the submission of this report to third parties by ABSG. KPMG may provide ABSG with oral, inception reports, status updates, draft reports, or draft presentations. Nonetheless, our final report shall take precedence in all circumstances, and therefore, no reliance should be placed by ABSG on any oral, inception report , status updates, draft reports, or draft presentations.

Distribution (electronic copy via email)

Dr. (Mrs.) Njum Onyemenam, Accountant General, Abia State Government Hon. Michael Akpara, Commissioner for Finance, Abia State Government Contacts at KPMG Advisory Services in connection with this report are:

Saheed Olawuyi

Partner, Enterprise Risk Services

Tel: + 234 803 403 5542

saheed.olawuyi@ng.kpmg.com

Bright Anyanwu

Manager, Enterprise Risk Services

Tel: +234 816 271 6244

bright.anyanwu@ng.kpmg.com

Omolola Abioye

Assistant Manager, Enterprise Risk Services

Tel: +234 806 439 5462

omolola.abioye@ng.kpmg.com

Document: KPMG Confidential

Abia State Government

Provision of Process Review Services Project Azumini – Final Report of Factual Findings March 2024

Contents

Glossary of Terms …………………………………………………………………………………………………9 1 Introduction ………………………………………………………………………………………………..14 1.1 Background………………………………………………………………………………………………. 14 1.2 Objectives ………………………………………………………………………………………………… 14 1.3 Nature of our assignment …………………………………………………………………………… 15 1.4 Period under review…………………………………………………………………………………… 16 1.5 Limitations and subsequent events………………………………………………………………. 16 1.6 Legal advice……………………………………………………………………………………………… 16 1.7 Procedures Performed……………………………………………………………………………….. 16 1.7.1 Contract Awards ……………………………………………………………………………………….. 16 1.7.2 Bank Accounts………………………………………………………………………………………….. 18 1.7.3 Sale and Disposal of Public Assets ……………………………………………………………… 20 1.7.4 Utilisation of Funds from Federation Accounts Allocation Committee (FAAC) ……. 21

1.7.5 Utilisation of credit facilities obtained by ABSG from UBA, Zenith Bank and Union Bank………………………………………………………………………………………………………… 23

1.7.6 Collection and Utilisation of IGR by ASBIR……………………………………………………. 23 1.8 Sources and Description of Documents Obtained………………………………………….. 25 1.9 Appendices ………………………………………………………………………………………………. 25 2 Executive Summary…………………………………………………………………………………….26 2.1 Contract Awards ……………………………………………………………………………………….. 26 2.1.1 Payments to Contractors ……………………………………………………………………………. 26 2.1.2 Selection of Contractors and Award of Contracts …………………………………………… 27 2.2 Bank Accounts………………………………………………………………………………………….. 28 2.2.1 Signatories to bank accounts maintained by ABSG ……………………………………….. 28 2.2.2 Bank Balances as at 28 May 2023 ………………………………………………………………. 29 2.2.3 Review of payments by ABSG from UBA and Zenith Bank ……………………………… 29 2.2.4 Possible Conflict of Interest ………………………………………………………………………… 29

2.2.5 Bank Charges and interest on Credit Facilities obtained from UBA, Zenith Bank and Union Bank ………………………………………………………………………………………………. 29

2.3 Sale and Disposal of Public Assets ……………………………………………………………… 30 2.4 Utilisation of Funds from Federation Accounts Allocation Committee (FAAC) ……. 30 2.4.1 Collection and Utilisation of Funds from FAAC………………………………………………. 30

2.5 Utilisation of credit facilities obtained by ABSG from UBA, Zenith Bank and Union Bank………………………………………………………………………………………………………… 31

2.6 Collection and Utilisation of IGR by ASBIR……………………………………………………. 31 3 Contract Awards …………………………………………………………………………………………34 3.1 Contracting Process…………………………………………………………………………………… 34 3.2 Contract Award – MDA’s View…………………………………………………………………….. 35 3.3 Selection of Contractors and Award of Contracts – MDA’s View………………………. 36

Document: KPMG Confidential

Abia State Government

Provision of Process Review Services Project Azumini – Final Report of Factual Findings March 2024

3.3.1 85 contracts amounting to ₦157,344,353,425.87 executed through Tendering process – MDA’s View……………………………………………………………………………….. 40

3.3.2 Ten (10) contracts executed through Direct Labour ……………………………………….. 47 3.4 Contract Award – Contractors’ View…………………………………………………………….. 51 3.4.1 Track Care Global Construction Company (Track Care)…………………………………. 53 3.4.2 Tunnel End Investment Company Limited (Tunnel End) …………………………………. 58 3.4.3 Ferotex Construction Company (Ferotex)……………………………………………………… 62 3.4.4 China Zhonghao Nigeria Limited (China Zhonghao) ………………………………………. 66 3.4.5 Hartland Nigeria Limited (Hartland) ……………………………………………………………… 69 3.4.6 Ekcleen Integrated Services Nigeria Limited (Ekcleen)…………………………………… 72 3.4.7 Setraco Nigeria Limited (Setraco)………………………………………………………………… 76 3.4.8 Rock-Waters Integrated Services Nigeria Limited (Rock-Waters)…………………….. 79 3.4.9 Delhope Resources Limited (Delhope)…………………………………………………………. 82 3.4.10 Arab Contractors Limited (Arab Contractors)…………………………………………………. 86 3.4.11 Yodel Global Services Limited (Yodel) …………………………………………………………. 89 3.4.12 Sannan Jadoon International Limited (Sannan Jadoon)………………………………….. 92 3.4.13 Bulletine Construction Company Limited (Bulletine)……………………………………….. 95 3.4.14 PRO-M Limited (PRO-M)……………………………………………………………………………. 98 3.4.15 Vision Cars Limited (Vision Cars) ………………………………………………………………. 101 3.4.16 Logistics De-Luke Limited (Logistics De-Luke)…………………………………………….. 104 3.5 Payments to Contractors ………………………………………………………………………….. 107

3.5.1 Track Care Global Construction Company Limited (Track Care) – ₦21,869,691,875.03 ………………………………………………………………………………… 111

3.5.2 Ferotex Construction Company Limited (Ferotex) – ₦12,601,634,391.81 ……….. 116 3.5.3 Tunnel End Investment Company Limited (Tunnel End) – ₦13,405,715,359.82.. 118 3.5.4 Ekcleen Integrated Services Nigeria Limited (Ekcleen) – ₦6,150,867,896.90 ….. 123

3.5.5 Rock-Waters Integrated Services Nigeria Limited (Rock-Waters) – ₦4,038,000,000.00 ………………………………………………………………………………….. 126

3.5.6 Hartland Nigeria Limited (Hartland) ……………………………………………………………. 128 3.5.7 Delhope Resources Limited (Delhope) – ₦4,789,384,959.42 ………………………… 129 3.5.8 Setraco Nigeria Limited (Setraco) – ₦3,310,000,000.00 ……………………………….. 131 3.5.9 PRO-M Limited (PRO-M) – ₦2,833,845,704.15 …………………………………………… 132 3.5.10 Macamuzy Nigeria Ltd (Macamuzy) – ₦2,990,000,000.00…………………………….. 133 3.5.11 Sponmor Services Ltd (Sponmor) – ₦3,246,700,000.00……………………………….. 134 3.5.12 Vision Cars Ltd (Vision Cars) – ₦2,130,700,000.00 ……………………………………… 135 3.5.13 Effdee Nigeria Ltd (Effdee) – ₦2,040,000,000.00…………………………………………. 137 3.5.14 Logistics De-Luke Limited (Logistics De-Luke) – ₦2,358,348,720.00 ……………… 138 3.5.15 China Zhonghao Nigeria Limited (China Zhonghao) – ₦2,020,161,386.88………. 139

3.5.16 Dawn ‘N’ Daisy Integrated Service Limited (Dawn ‘N’ Daisy) – ₦3,585,400,000.00 141

Document: KPMG Confidential

Abia State Government

Provision of Process Review Services Project Azumini – Final Report of Factual Findings March 2024

3.5.17 Blessed Henken Company Limited (Blessed Henken) – ₦1,500,000,000.00……. 142 3.5.18 Pumeco Industries Nigeria Limited (Pumeco) – ₦1,559,983,017.97……………….. 143 3.5.19 Sannan Jadoon International Limited (Sannan Jadoon) – ₦998,750,000.00 ……. 144 3.5.20 Chintech Electro Nigeria Limited (Chintech) – ₦1,339,075,568.00 …………………. 146 3.5.21 Blessed Ugo Frank Global Ventures (Blessed Ugo) – ₦652,000,000.00 …………. 147 3.5.22 Universal Energy Oil & Gas Limited (Universal Energy) – ₦524,439,000.00 ……. 148 3.5.23 Bulletine Construction Company Limited (Bulletine) – ₦557,600,000.00 …………. 149 3.5.24 JMK Construction Company Limited – ₦550,000,000.00………………………………. 149 3.5.25 Arab Contractors Limited (Arab Contractors) – ₦608,981,491.00 …………………… 150 3.5.26 Zinnuche Ventures (Zinnuche) – ₦365,000,000.00………………………………………. 151 3.5.27 Innoson Vehicle Manufacturing Company Limited (Innoson) – ₦270,683,410.00 152 3.5.28 Masta Service Company Limited (Masta Service) – ₦580,000,000.00 ……………. 152 3.5.29 Yodel Global Resources Limited (Yodel) – ₦554,878,048.79 ………………………… 153 3.5.30 Findings from review of payments relating to other contractors ……………………… 154 4 Bank Accounts………………………………………………………………………………………….157 4.1 Overview of ABSG Bank Accounts…………………………………………………………….. 157

4.2 Bank Balances as at 28 May 2023 and Signatories to Accounts maintained by ABSG with all banks in Nigeria ………………………………………………………………….. 157

4.2.1 Signatories to bank accounts maintained by ABSG ……………………………………… 157 4.2.2 Bank Balances as at 28 May 2023 …………………………………………………………….. 163 4.3 Proprietary of payments/outflows from ABSG UBA and Zenith Bank accounts … 164 4.3.1 Proprietary of payments/outflows from ABSG UBA accounts…………………………. 164 4.3.2 Proprietary of payments/outflows from ABSG Zenith Bank accounts………………. 178 4.3.3 Possible Conflict of Interest ………………………………………………………………………. 186

4.4 Bank Charges and interests on credit facilities obtained by ABSG from UBA, Zenith Bank and Union Bank ………………………………………………………………………………. 191

4.4.1 Bank Charges and Interests on Credit Facilities obtained from UBA ………………. 191

4.4.2 Bank Charges, and Interests on Credit Facilities obtained by ABSG from Zenith Bank………………………………………………………………………………………………………. 209

4.4.3 Bank Charges, and Interests on Credit Facilities obtained by ABSG from Union Bank………………………………………………………………………………………………………. 217

5 Sale and Disposal of Public Assets ……………………………………………………………..220 5.1 Ministry of Lands, Survey and Urban Planning…………………………………………….. 221 5.1.1 Application for Land Allocation…………………………………………………………………… 222 5.1.2 Acceptance of Allocation Offer…………………………………………………………………… 226 5.1.3 Ongoing and Completed Allocation Process ……………………………………………….. 232 6 Utilisation of Funds from Federation Accounts Allocation Committee (FAAC) ……233 6.1 Overview………………………………………………………………………………………………… 233 6.2 Total allocations received from FAAC accounts …………………………………………… 234 6.3 Utilisation of Funds from FAAC………………………………………………………………….. 237

Document: KPMG Confidential

Abia State Government

Provision of Process Review Services Project Azumini – Final Report of Factual Findings March 2024

6.4 Total Inflows and Outflows in the FAAC accounts………………………………………… 237 6.5 Utilisation of Outflows from the FAAC accounts …………………………………………… 238 6.5.1 Inter-account transfers – ₦399,709,644,824.66 …………………………………………… 238 6.5.2 Loan repayments & CFFs – ₦44,003,054,478.44 ………………………………………… 239 6.5.3 Inter-bank transfers – ₦16,602,573,445.57 …………………………………………………. 239 6.5.4 FIRS (WHT and VAT) – ₦1,904,500,000.00………………………………………………… 240 6.5.5 MDAs – ₦1,490,657,214.00………………………………………………………………………. 240 6.5.6 Government House & Officials – ₦1,169,527,000.00……………………………………. 241 6.5.7 Contractors – ₦634,603,822.80…………………………………………………………………. 243 6.5.8 Other ABSG bank transfers – ₦341,900,000.00…………………………………………… 243 6.5.9 Bank Charges – ₦135,215,596.92 …………………………………………………………….. 244 6.6 Possible Collusion or Conflict of Interest …………………………………………………….. 244

7 Utilisation of credit facilities obtained by ABSG from UBA, Zenith Bank and Union Bank………………………………………………………………………………………………………..245

7.1 Utilisation of Credit Facilities obtained from UBA …………………………………………. 245 7.1.1 ₦2,836,031,308.74 ASUBEB Counterpart Fund…………………………………………… 245 7.1.2 ₦600,000,000.00 Counterpart Fund …………………………………………………………… 245 7.1.3 ₦6,000,000,000.00 Counterpart Fund ………………………………………………………… 246 7.1.4 ₦1,519,884,078.68 ASUBEB Counterpart Fund…………………………………………… 250 7.1.5 ₦1,000,000,000.00 Term loan …………………………………………………………………… 250 7.1.6 ₦500,000,000.00 Term loan ……………………………………………………………………… 250 7.1.7 ₦4,000,000,000.00 Term loan …………………………………………………………………… 251 7.1.8 ₦500,000,000.00 Term loan ……………………………………………………………………… 252 7.1.9 ₦500,000,000.00 Term loan ……………………………………………………………………… 252 7.1.10 ₦1,025,000,000.00 COVID-19 Health-Care intervention……………………………….. 253 7.2 Utilisation of Credit Facilities obtained from Zenith Bank……………………………….. 253 7.2.1 ₦1,000,000,000.00 Term Loan………………………………………………………………….. 254 7.2.2 ₦1,000,000,000.00 Counterpart Fund ………………………………………………………… 255 7.2.3 ₦1,000,000,000.00 Term Loan………………………………………………………………….. 255 7.2.4 ₦500,000,000.00 Term Loan…………………………………………………………………….. 257 7.2.5 ₦849,652,990.72 Term Loan…………………………………………………………………….. 257 7.2.6 ₦376,440,000.00 Term Loan…………………………………………………………………….. 257 7.2.7 ₦600,000,000.00 Term Loan…………………………………………………………………….. 258 7.2.8 ₦170,000,000.00 Term Loan…………………………………………………………………….. 258 7.3 Utilisation of Credit Facilities obtained from Union Bank ……………………………….. 258 7.3.1 ₦1,250,000,000.00 COVID-19 Health-Care intervention……………………………….. 258 8 Collection and Utilisation of IGR by ASBIR……………………………………………………261 8.1 Overview………………………………………………………………………………………………… 261 8.2 Quantum of IGRs Collected………………………………………………………………………. 262 8.2.1 Collections through Paydirect – ₦44,091,898,621.13……………………………………. 263

Document: KPMG Confidential

Abia State Government

Provision of Process Review Services Project Azumini – Final Report of Factual Findings March 2024

8.2.2 Direct Collections – ₦18,119,611,724.76 ……………………………………………………. 266 8.2.3 PAYE Collections – ₦16,145,863,431.19 ……………………………………………………. 267 8.2.4 Specific Collections – ₦2,175,308,111.58 …………………………………………………… 268 8.2.5 Other Collections – ₦571,053,232.29…………………………………………………………. 269 8.3 Utilisation of IGR Collections by ASBIR………………………………………………………. 270 8.3.1 Utilisation of Paydirect Collections – ₦44,091,898,621.13 …………………………….. 270 8.3.2 Utilisation of Collections through bank accounts – ₦20,294,919,836.34………….. 282 8.4 Possible Collusion or Conflict of Interest …………………………………………………….. 288 8.5 Movement of Collections by ASBIR……………………………………………………………. 289 9 Improvement Opportunities and Recommendations……………………………………….290 10 Appendices ………………………………………………………………………………………………302 10.1 Sources and description of records obtained……………………………………………….. 302 10.2 Details of the CBN Extant Guidelines …………………………………………………………. 304 10.3 Net Movement Analysis ……………………………………………………………………………. 306 10.4 List of 73 Sampled Contractors………………………………………………………………….. 313 10.5 Screenshot of Inactive Status with CAC ……………………………………………………… 317 10.5.1 Amatec Integrated Service Ltd…………………………………………………………………… 317 10.5.2 Seafair Projects Ltd …………………………………………………………………………………. 317 10.5.3 Conduit Resources Ltd …………………………………………………………………………….. 317 10.5.4 Fincep Construction Company Ltd……………………………………………………………… 318 10.5.5 Pal Bese Global Enterprises Ltd………………………………………………………………… 318 10.5.6 Worldcorp Nigeria Limited Ltd……………………………………………………………………. 318 10.5.7 Track Care Global Construction…………………………………………………………………. 319 10.5.8 Tunnel End Investment Company Limited…………………………………………………… 319 10.5.9 Ferotex Construction Company …………………………………………………………………. 319 10.5.10 Ekcleen Integrated Services Nigeria Limited………………………………………………. 320 10.5.11 Rock-Waters Integrated Service Nigeria Limited ………………………………………… 320 10.5.12 Delhope Resources Limited …………………………………………………………………….. 320 10.5.13 Arab Contractors Limited…………………………………………………………………………. 321 10.5.14 Yodel Global Resources Limited ………………………………………………………………. 321 10.5.15 Pro-M Limited ………………………………………………………………………………………… 321 10.5.16 Logistics De-Luke Limited ……………………………………………………………………….. 322 10.6 Screenshot of the CBN Extant Guidelines…………………………………………………… 323 10.7 Details of Sample Payments Reviewed………………………………………………………. 325 10.8 List of TODs in FAAC and VAT accounts ……………………………………………………. 325 10.8.1 TODs in FAAC account…………………………………………………………………………….. 325 10.8.2 TODs in VAT account ………………………………………………………………………………. 332 10.9 Breakdown of 16 CFFs UBA provided offer letters ……………………………………….. 336 10.10 Schedule of Review of 91 Land Allocation Files…………………………………………… 337

Document: KPMG Confidential

Abia State Government

Provision of Process Review Services Project Azumini – Final Report of Factual Findings March 2024

10.11 List of identified FAAC accounts………………………………………………………………… 341 10.12 Schedule of Accounts Utilised by ASBIR…………………………………………………….. 342 10.13 Damaged Payment Vouchers……………………………………………………………………. 344 10.14 Non Compliance in contract process ………………………………………………………….. 345 10.15 Possible Conflict of Interest ………………………………………………………………………. 358

Document: KPMG Confidential

Glossary of Terms

Abia State Government

Provision of Process Review Services Project Azumini – Final Report of Factual Findings March 2024

We have listed the descriptions and explanations of terms and abbreviations used in this report in the table below. However, these descriptions and explanations serve to clarify our report and are not intended to be authoritative. Positions / designations are as at the date of the report, unless otherwise indicated.

Abbreviation	Meaning
ABSG or the State	Abia State Government
Access Bank	Access Bank Plc and Defunct Diamond Bank Plc
AG	Accountant-General, Abia State
Ag. Chairman, ASBIR	Mr. Peacebe Ukaegbu, Acting Chairman, ASBIR up till 24 September 2023
Annual Reports	Annual Reports of the Accountant General
ASBIR	Abia State Board of Internal Revenue
ASOPADEC	Abia State Oil Producing Areas Development Commission
ASPIMSS	Abia State Passengers Integrated Manifest and Safety Scheme
ASUBEB	Abia State Universal Basic Education Board
BIR	Board of Internal Revenue
BPP	Bureau of Public Procurement
C of O	Certificate of Occupancy
CBN	Central Bank of Nigeria
CFF	Contractor Finance Facility
Chairman, ASBIR	Prof. Udochukwu Ogbonna, Executive Chairman, ASBIR
Chief Accountant, Cash Office	Mrs. Sandra Nnamdi Offor, Chief Accountant, Cash Office, Office of the Accountant General, Abia State
Citibank	Citibank Nigeria Limited
Commissioner, Ministry of Lands and Housing	Honourable Commissioner Chaka Chukwumereije, Ministry of Lands and Housing
DAP	Mrs. Chinakwalam Obi Elechi, Director of Account Productions, Office of the Accountant General, Abia State
DF, ASBIR	Mrs. Chioma Orikara, Director of Finance, ASBIR
DF, ASPHCDA	Mrs. Nancy, Director of Finance, Abia State Primary Health Care Development Agency
DF, Ministry of Health	Mr. Ikechukwu Nwabuko, Director of Finance, Ministry of Health

Document: KPMG Confidential

Abia State Government

Provision of Process Review Services

Project Azumini – Final Report of Factual Findings

March 2024

Abbreviation	Meaning
DF, Ministry of Housing	Mr. Alfred Diegwu, Ministry of Housing (now Ministry of Lands and Housing)
DF, Ministry of Lands	Mr. Godwin Nwangaga, Director of Finance, Ministry of Lands
DF, Ministry of Transport	Mrs. Chinyere Kalu, Director of Finance, Ministry of Transport
DF, Ministry of Works	Mr. Vincent Uwajimgba, Director of Finance, Ministry of Works
Director of Administration, Office of the AG	Mr. Akobundu N. Raphael, Director of Aministration, Office of the AG
Director of Collections, ASBIR	Mrs. Anthonia Ukaegbu, Director of Collections, ASBIR
Director of Lands, Ministry of Lands and Housing	Mr. Austine O. Ucheibe, Director of Lands, Ministry of Lands and Housing
Director of Transport, Ministry of Transport	Comrade O. Uleka, Director of Transport, Ministry of Transport
DMB	Deposit Money Bank
DPRS, Ministry of Education	Mrs. Ngozi , Director of Planning, Research and Statistics, Ministry of Education
DPRS, Ministry of Works	Mr. Denwoha Udobi, Director of Planning, Research and Statistics, Ministry of Works
DPRS, Office of the Governor	Mr. Godknows Ikpeama, Director of Planning, Research and Statistics, Office of the Governor
DQS, Ministry of Lands and Housing	Engineer Ralph Uche Owoh, Director of Quantity Survey, Ministry of Lands and Housing
Ecobank	Ecobank Nigeria Limited
EFCC	Economic and Financial Crimes Commission
Exco	State Executive Council
F&GPC	Finance & General Purpose Committee
FAAC	Federation Account Allocation Committee
FBNQuest	FBNQuest Limited
FCMB	First City Monument Bank Limited
FGN	Federal Government of Nigeria
Fidelity Bank	Fidelity Bank Plc
FIRS	Federal Inland Revenue Service
FirstBank	First Bank of Nigeria Limited
FMF	Federal Ministry of Finance

Document: KPMG Confidential

Abia State Government

Provision of Process Review Services

Project Azumini – Final Report of Factual Findings

March 2024

Abbreviation	Meaning
FSDH Merchant Bank	FSDH Merchant bank Limited
GIS	Geographic Information Science
Globus Bank	Globus Bank Limited
Greenwich Merchant Bank	Greenwich Merchant Bank Limited
Group Head, Government and Social Services, Interswitch	Mr. Osasere Atohengbe, Group Head, Government and Social Services, Interswitch
GTBank	Guaranty Trust Bank Limited
Head of ICT, ASBIR	Mr. Emmanuel Alozie, Head of ICT, ASBIR
Heritage Bank	Heritage Bank Plc
IGR	Internally Generated Revenue
Immediate Past AG	Mr. Kelechi C. Imeoria – Accountant-General, Abia State from July 2018 to May 2023
Immediate Past Cashier	Mr. Kelechi C. Imeoria – Cashier, Abia State from May 2015 to July 2018
Interswitch	Interswitch Group
ISO	Independent Service Organisation
ISPO	Irrevocable Standing Payment Order
ITT	Invitation to tender
Keystone Bank	Keystone Bank Limited
KPMG	KPMG Advisory Services
Ltd	Limited
MDAs	Ministries Departments and Agencies
MDG	Millenium Development Goals
Ministry of Lands and Housing	Formerly Ministry of Lands, Survey and Urban Planning, and Ministry of Housing up till 28 May 2023
MoJ	Ministry of Justice
MoU	Ministry of Understand
MTB	Ministerial Tenders Board
NBS	National Bureau of Statistics
NEFT	NIBSS Electronic Funds Transfer
NGN or ₦	Nigerian Naira
Nova Merchant Bank	Nova Merchant Bank Limited
OAGF	Office of the Accountant-General of the Federation

Document: KPMG Confidential

Abia State Government

Provision of Process Review Services

Project Azumini – Final Report of Factual Findings

March 2024

Abbreviation	Meaning
Parallex Bank	Parallex Bank Limited
Pay Officer, TPO	Mrs. Angela Edward, Pay Officer, TPO
PAYE	Pay As You Earn
PEP	Politically Exposed Persons
Perm. Sec., Ministry of Rural Development	Mr. Onyema Abarikwu, Permanent Secretary, Ministry of Rural Development, Cooperatives and Poverty Reduction
Plc	Public Limited Company
Polaris Bank	Polaris Bank Limited
PPIDF	Physical Planning and Infrastructure Development Fund
Premium Trust Bank	Premium Trust Bank Limited
Providus Bank	Providus Bank Limited
PVS	Payment Voucher Substitute
Rand Merchant Bank	Rand Merchant Bank Nigeria Limited
Sales Executive, South and Southeast, Interswitch	Mr. Samuel Ngah, Sales Executive, South and South East, Interswitch
Secretary, ASBIR	Mr. Ibeawuchi Adindu, Secretary, ASBIR
Secretary, F&GPC	Mr. Onyebuchi Ajomiwe, Secretary, Finance & General Purpose Committee
SSG	Secretary to the State Government
Stanbic IBTC Bank	Stanbic IBTC Bank Plc
Standard Chartered Bank	Standard Chartered Bank Nigeria Limited
State Cashier	Mr. Okechukwu Gberemakor, Current State Cashier, Office of the Accountant General, Abia State
Sterling Bank	Sterling Bank Plc
Sub-treasurer, TPO	Mrs. Chika Onukwube, Sub-treasurer, TPO
Surveyor General, Ministry of Lands and Housing	Engineer Anthony Ivonye, Ministry of Lands and Housing
TAMA	Tax Audit Monitoring Agent
TCC	Tax Clearance Certificate
Titan Trust Bank	Titan Trust Bank Limited
TOD	Temporary Overdraft Facility
TPO	Treasury Pay Office, Abia State
Transport Officer, GHUM	Emenike Njoku, Transport Officer, Government House, Umuahia

Document: KPMG Confidential

Abia State Government

Provision of Process Review Services

Project Azumini – Final Report of Factual Findings

March 2024

Abbreviation	Meaning
UBA	United Bank for Africa Plc
UBA Branch Manager	Jude Ugwu, UBA Branch Manager, Umuahia
Union Bank	Union Bank of Nigeria Plc
Unity Bank	Unity Bank Plc
USSD	Unstructured Supplementary Service Data
VAS	Value Added Service
Wema Bank	Wema Bank Plc
Zenith Bank	Zenith Bank Plc

Document: KPMG Confidential

1 Introduction 1.1 Background

Abia State Government

Provision of Process Review Services Project Azumini – Final Report of Factual Findings March 2024

a. The administration of Abia State, which was inaugurated on 29 May 2023, has requested KPMG, via the engagement letter dated 13 July 2023 executed between KPMG and ABSG, to provide process review services to ABSG, focusing on the under listed scope areas and objectives, to cover the period from 29 May 2015 to 28 May 2023, unless otherwise indicated.

1.2 Objectives

S/N	Scope Area	Objective
1	Contracts Award	a. Ascertain whether due process was followed or not, in the selection of contractors, award of contracts and payments to the contractors by ABSG. In addition, identify any possible collusion with beneficiaries.
2	Bank Accounts Period of review: a. UBA: 29 May 2015 – 28 May 2023. b. Zenith Bank and Union Bank: 1 January 2020 – 28 May 2023. These two (2) banks were audit clients of KPMG up to 31 December 2019.	a. Identify the signatories and ascertain the bank balances of ABSG with all banks in Nigeria as at 28 May 2023, via circularisation only. b. Ascertain if there is any misappropriation in the payments made from UBA and Zenith Bank accounts to the beneficiaries. Also identify any possible collusion with the beneficiaries. c. Determine if there is any overcharge of interest and/or charges by UBA, Zenith Bank and Union Bank on current, deposit, escrow or investment accounts, as well as credit facilities granted to the State.
3	Sale and Disposal of Public Assets	a. Determine adequacy or otherwise of the governance and operational process followed in the disposal, retirement and/or write-offs of fixed assets, in accordance with relevant ABSG’s policies and procedures.

KPMG Advisory Services, a partnership registered in Nigeria and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

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S/N	Scope Area	Objective
4	Utilisation of Funds from Federal Account Allocation Committee	a. Determine the total allocation received from FAAC and ascertain utilisation therefrom, with a view to identifying any misappropriation and/or leakages in the flow of receipt and utilisation. In addition, identify any possible collusion with the beneficiaries.
5	Utilisation of Credit Facilities obtained by ABSG from UBA, Zenith Bank and Union Bank	a. Ascertain the total credit facilities obtained by the State Government from UBA, Zenith Bank and Union Bank and determine if they were utilized for the intended purposes. In addition, identify any possible collusion with the beneficiaries.
6	Collection and Utilisation of IGR by ASBIR	a. Establish the quantum of the IGR collected by ASBIR and identify any misappropriation and/or leakages in the process of collection, transfer and/or utilisation. In addition, identify any possible collusion with the beneficiaries.

1.3 Nature of our assignment

a. This assignment was not performed by us in the capacity of a statutory auditor. Hence, this is not any form of financial statements audit of ABSG or any entity listed in the report. We are therefore not required to render an opinion on the financial statements of ABSG or any entity listed in the report.

b. Rather, we have performed the procedures we considered appropriate in the circumstances and in line with relevant KPMG methodology.

c. We were also not required to review the adequacy or otherwise of the output of the prior or current external auditors and/or consultants of ABSG, and did not perform any of the following:

i. Conduct a trial and / or inquiry in the course of the assignment.

ii. Act as a tribunal, commission of inquiry or in judicial or quasi-judicial role. iii. Perform, any adjudicatory function whatsoever in the course of the assignment.

iv. Conduct any exercise with a view to determining whether any person was guilty or innocent of any offence.

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1.4 Period under review

a. The procedures performed by us are relevant to events / documentation covering the period from 29 May 2015 to 28 May 2023, unless otherwise stated in this report. Specifically, the period under review for Zenith Bank and Union Bank is from 1 January 2020 to 28 May 2023 as the two (2) banks were KPMG audit clients up to 31 December 2019.

1.5 Limitations and subsequent events

a. We have included and records information relevant to the scope of work and objectives in line with the executed engagement letter of 13 July 2023, and as provided by the relevant MDAs of ABSG and the banks. Notwithstanding the foregoing, it is possible that documents and / or information exist, which were not made available to us.

b. The provision of additional documents and / or information after submission of this final report will however attract a separate fee and timeline discussion between KPMG and ABSG.

c. For ease of understanding of this report, specific limitations (if any) are stated in the relevant sections of this report.

1.6 Legal advice

a. Although our report may contain references to relevant laws and regulations, we do not provide legal opinion on compliance with such laws and regulations.

b. Our discussion of the relevant laws and regulations is intended solely to facilitate the determination of applicable facts, which may be relevant to the interpretation and/or application of such laws and regulations.

c. Should such interpretation require legal advice, we recommend that ABSG obtain an independent legal advice.

1.7 Procedures Performed

To achieve the objectives of the process review, we performed the following activities:

1.7.1 Contract Awards

a. Held discussions with the under-listed officials of ABSG to obtain an understanding of the contract award process:

i. DPRS, Ministry of Works

ii. DF, Ministry of Works

iii. Secretary, F&GPC

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Provision of Process Review Services Project Azumini – Final Report of Factual Findings March 2024

iv. Director of Quantity Survey, Ministry of Housing¹

v. DF, Ministry of Health

b. Reviewed the following records to understand the contracting and payment process. i. Abia State Public Procurement Law 2012

ii. Abia State financial regulations (as amended in 2001)

c. Analysed schedules of contracts awarded during the period under review to determine in-scope contracts from the following sources:

i. F&GPC

ii. Ministry of Works

iii. Ministry of Lands & Housing

iv. Office of the Governor

v. Education

_vi._{Abia State e-procurement website}_1F1F²(now defunct)

d. Reviewed the under-listed supporting documents provided for sample contracts, focusing on business justification, approval process, and completion of project, in line with the relevant policies, procedural manuals and practices.

i. Tender Documents

ii. Bid Submissions

iii. Jobbing Order

iv. Contract Agreements

v. Minutes of MTB

vi. Award Letters

vii. Interim Certificates

viii. Final Completion Certicate

ix. Payment Vouchers

e. Reviewed and analysed the bank account statements received from 35 circularised banks to determine payments to contractors for the period under review.

f. Reviewed the following records from ABSG Cash Office, Admin Office, Office of the AG, UBA and Access Bank to ascertain total payments to contractors through CFF:

¹Ministry of Lands and Ministry of Housing has been merged into Ministry of Lands and Housing in the new administration.

²Retrieved on 5 August 2023 from Contract Award Publication | Abia State Government.

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Provision of Process Review Services Project Azumini – Final Report of Factual Findings March 2024

i. Schedules (containing facility amount, interest rate, tenor, repayment etc.) of credit facilities obtained by ABSG.

ii. Offer letters, ISPOs and repayment schedules to determine the purpose of the CFF and total payments to contractors through CFFs.

g. Performed desktop search and reviewed the nominal roll to identify possible relationships and/or collusion between officials of the State and the beneficiaries of the payments on the selected contracts.

h. Held discussions with the under-listed officials of UBA to provide outstanding records relating to CFF and payments made directly from ABSG bank accounts.

i. Alex Alozie – Executive Director / Group Chief Operating Officer, UBA Group. ii. Nnaemeka Longman – Regional Head, East Bank, UBA Group.

iii. Chukwuka Agbo – Zonal Head, East Bank, UBA Group.

iv. Jude Ugwu – Business Unit Manager, UBA Factory Road Branch, Abia State.

1.7.2 Bank Accounts

a. We performed the following activities to identify the signatories and ascertain the State’s account balances with the banks in Nigeria as at 28 May 2023.

i. Compiled a list of 35 licensed banks in Nigeria, per CBN Financial Institutions (DMB) reports as at 28 May 2023.

ii. Circularised the 35 banks, requesting bank mandates, bank balances and account statements for accounts maintained by ABSG with banks covering the period of review.

iii. Reviewed the bank mandates received from the banks and identified the signatories for accounts maintained by ABSG with the banks.

iv. Analysed the bank account statements received from the banks to determine the net movements for the period under review, and bank balances as at 28 May 2023.

v. Reviewed samples of payments from the banks to reconcile the authorised signatories per list of signatories provided by banks, with the signatories on the sample payment records.

b. We performed the following activities to ascertain if there is any indication of misappropriation in the payments made from UBA and Zenith Bank accounts to the beneficiaries. Also identify any possible collusion with the beneficiaries.

i. Held discussions with the under-listed officials to better understand the payment approval and authorization process.

▪ Director of Account Productions

▪ State Cashier

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▪ Chief Accountant Cash Office

▪ Sub-treasurer, TPO

▪ Pay Officer, TPO

ii. Reviewed the following records to ascertain if there is any indication of misappropriation in the payments from UBA and Zenith Bank:

▪ Requested bank account statements³for all accounts maintained by ABSG with UBA and Zenith Bank.

▪ ABSG annual budget covering the period from 2015 to 2023.

▪ ABSG payment vouchers and cheque registers covering the period from 2015 to 2023.

▪ ABSG nominal roll covering the period from 2018⁴to 2023.

▪ Supporting documents such as payment advice, e-payment bank mandate, award letters, tenders, quotations, job completion certificates, invoices, receipts, etc. for payments made by ABSG to various beneficiaries.

iii. Performed desktop search and reviewed the nominal roll to identify possible relationships and/or collusion between officials of the State and the beneficiaries of the payments from UBA and Zenith Bank.

c. We performed the following to determine if there is any overcharge of interest and/or charges by UBA, Zenith Bank and Union Bank on current, deposit, escrow, or investment accounts⁵, as well as credit facilities granted to ABSG.

i. Obtained the following records from ABSG Cash Office to ascertain total credit facilities obtained by ABSG during the period under review:

▪ Schedules (containing facility amount, interest rate, tenor, etc.) of credit facilities, obtained by ABSG from UBA, Zenith Bank and Union Bank.

▪ Offer letters, addendums, correspondences, amortization / repayment schedules, loan history records, rate history for the facilities in the schedule provided by ABSG Cash Office.

ii. Reviewed the following records obtained from UBA, Zenith Bank and Union Bank:

▪ Schedule (including facility amount, interest paid, outstanding fees and charges, and the outstanding balance) of all credit facilities, obtained by ABSG from the aforementioned banks during the period under review.

³See Appendix 10.3 for details of all accounts maintained by ABSG.

⁴ABSG did not provide the nominal roll from 2015 to 2017.

⁵ABSG did not maintain deposit, escrow, or investment accounts with the three (3) banks.

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▪ Offer letters, addendums, correspondences, amortization / repayment schedules, loan history records, rate history for the facilities in the schedule provided by UBA, Zenith Bank and Union Bank.

iii. Compared the list of credit facilities noted per ABSG’s Cash office records with the schedule of credit facilities provided by the three (3) banks, to ascertain completeness.

iv. Analysed loan disbursements into the bank accounts maintained by ABSG with the three (3) banks, to ascertain if there were credit facilities not captured in the records provided by ABSG and the three (3) banks.

v. Reviewed offer letters, correspondences, amortization/repayment schedules, rate history for the facilities sighted in the bank account statements that were not captured in the schedule provided by the three (3) banks and ABSG’s Cash office.

vi. Consulted the extant CBN guidelines and circulars on bank charges and benchmark against the amount charged by the three (3) banks, and independently reviewed and analysed the fees, and payments on the credit facilities, in line with the executed offer letters and extant CBN guidelines.

iv. Held discussions with the under-listed officials of UBA and Zenith Bank to reconcile the draft findings on analysis of bank statements and credit facilities obtained by ABSG from the two (2) banks:

UBA

▪ Alex Alozie – Executive Director / Group Chief Operating Officer, UBA Group. ▪ Nnaemeka Longman – Regional Head, East Bank, UBA Group.

▪ Chukwuka Agbo – Zonal Head, East Bank, UBA Group.

▪ Jude Ugwu – Business Unit Manager, UBA Factory Road Branch, Abia State. Zenith Bank

▪ John Onyike – Zenith Bank Zonal Head, Abia 2 Zone.

▪ Ngozi Onyekwue – Zenith Bank Relationship Service Manager, Umuahia 2 Branch.

▪ Kenneth Ibe – Zenith Bank Relationship Service Manager, Umuahia 2 Branch.

vii. Identified improvements opportunities in ABSG payment procedure and utilisation of credit facilities.

1.7.3 Sale and Disposal of Public Assets

a. Held discussions with the under-listed officials to understand the asset disposal process and obtain schedule of public assets disposed if any.

i. Commissioner of Lands and Housing

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ii. Surveyor General, Ministry of Lands and Housing⁶

iii. DF, Ministry of Lands⁷

iv. DF, Ministry of Housing⁸

v. Director of Lands 1, Ministry of Lands and Housing

vi. Director of Quantity Survey, Ministry of Lands and Housing

vii. DF, Ministry of Transport

viii. DPRS, Ministry of Education

b. Reviewed the provisions of the following laws guiding the disposal, write-offs and retirement of assets.

i. Abia State Public Procurement Law 2012

ii. The Land Use Act 1978

c. Reviewed schedules of assets covering public schools and vehicles from the following MDAs for the period under review to ascertain if the assets were disposed, retired and or written-off.

i. Ministry of Education

ii. Government House

d. Reviewed records of allocated lands for the period under review to determine the process for the allocation of lands and ascertain if due process was followed.

e. Reviewed the Annual Reports of the Accountant General for the years 2015-2022 to identify assets that were disposed during the period under review.

f. Perform desktop searches and vis-à-vis the nominal roll of ABSG officials during the period under review to identify any possible conflict of interest and / or collusion with beneficiaries.

g. Identified improvements opportunities in ABSG’s sale and asset disposal process and controls and the utilisation of IGR.

1.7.4 Utilisation of Funds from Federation Accounts Allocation Committee (FAAC)

a. We performed the following procedures to determine the total FAAC revenue allocation received by ABSG during the period under review.

⁶Ministry of Lands and Ministry of Housing has been merged into Ministry of Lands and Housing in the new administration.

⁷Now merged with Ministry of Housing.

⁸Now merged with Ministry of Lands.

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i. Reviewed the provisions of applicable laws⁹to better understand the provisions guiding the revenue allocation by FAAC.

ii. Analysed the following records:

▪ FAAC accounts maintained by ABSG during the period under review¹⁰.

▪ Monthly FAAC disbursement reports published on the Technical Subcommittee of FAAC.

▪ Annual Reports of the Accountant-General from 2015 to 2022.

▪ ABSG FAAC revenue schedule maintained from 2015 to 2023.

▪ Monthly FAAC meeting reports¹¹1 sent to the State Governor from the Office of the Accountant-General.

▪ Monthly FAAC expenditure proposals¹²

iii. Determined and reconciled the total net FAAC receipts into ABSG’s FAAC revenue accounts during the period under review vis-à-vis the monthly FAAC disbursement reports published by the Technical Subcommittee of FAAC.

iv. Reviewed and reconciled the total net FAAC receipts with the statutory allocation disclosures captured in the Annual Reports of the Accountant-General from 2015 to 2022.

b. We performed the following activities to ascertain the utilisation of FAAC revenue allocations received by ABSG during the period under review, with a view to identifying any indication of misappropriation and/or leakages in the flow of receipt and utilisation.

i. Reviewed ABSG bank accounts that received inflows from the FAAC accounts.

ii. Confirmed the receipt of the inter-account / inter-bank transfers from the FAAC accounts in the receiving ABSG accounts. See details in section 6.5.1 of this report.

c. Held discussions with the under-listed officials to better understand the collection and utilisation of FAAC.

i. State Cashier

ii. Chief Accountant, Cash Office

iii. Director of Accounts Production

⁹Revenue (Federation Account) No. 1 1982, The Constitution of the Federal Republic of Nigeria (1999 as amended).

¹⁰See Appendix 10.11 for details of all FAAC accounts maintained by ABSG.

¹¹ABSG provided records for 2017 (July-November), 2020 (January-April), 2021, 2022 and 2023 (January February).

¹²ABSG provided records for 2016 (March-December) and 2017.

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d. Performed desktop searches and reviewed the nominal roll of ABSG officials during the period under review to identify any possible conflict of interest and / or collusion with the beneficiaries of the payments from the bank accounts above.

e. Identified improvements opportunities in the collection and utiisation of FAAC allocation to ABSG.

1.7.5 Utilisation of credit facilities obtained by ABSG from UBA, Zenith Bank and Union Bank

a. Reviewed the following:

i. Schedule containing list of credit facilities obtained by ABSG from UBA, Zenith Bank, and Union Bank.

ii. Offer letters for credit facilities obtained from UBA, Zenith Bank and Union Bank to determine the purpose of the credit facilities.

iii. Supporting documents such as payment vouchers, payment advice, e-payment bank mandates, cheques, award letters, tenders, quotations, job completion certificates, invoices, receipts, etc. and justification (budget) for the utilisation of the credit facilities.

b. Reviewed the utilisation of funds received from credit facilities and reconciled the utilisation with the purpose of the facilities stated in the offer letters, to ascertain if the credit facilities were used for their intended purposes.

c. Performed desktop search and reviewed the nominal roll to identify possible relationships and/or collusion between officials of the State and the beneficiaries of the funds received via the credit facilities.

1.7.6 Collection and Utilisation of IGR by ASBIR

a. Held discussions with the under-listed officials to better understand the process and practice of collection and utilisation of IGR.

i. Ag. Chairman, ASBIR

ii. DF, ASBIR

iii. Secretary, ASBIR

iv. Head of ICT, ASBIR

v. Director of Collections, ASBIR

vi. Group Head, Government and Social Services, Interswitch

vii. Sales Executive, South and Southeast, Interswitch

b. Reviewed the following records:

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i. Bank account¹³statements for accounts maintained by ASBIR with 35 banks in Nigeria.

ii. ASBIR nominal roll covering the period from 2015 to 2023.

iii. ASBIR IGR monthly reports covering the period from 1 June 2015 to 31 May 2023¹⁴. to ascertain total IGR collections reported by ASBIR.

iv. Abia State Tax Consolidation and Codification Law 2020.

v. Appointment letters for TAMAs and other revenue enforcement consultants to benchmark the engagement terms with the provisions of the Abia State Tax Consolidation and Codification Law.

vi. Letters of payment instructions from ASBIR to Interswitch.

vii. Payment vouchers, transfer instructions and cheques for payments made from ASBIR Zenith Bank overhead other charges bank account with account number 1013921818 between 1 June 2015 to 31 May 2023, to ascertain if there is any indication of misappropriation in the payments made to beneficiaries.

viii. Transfers from IGR collection accounts to the three (3) ASBIR overhead bank account¹⁵with Zenith, Fidelity and Access Bank from 1 June 2015 to 31 May 2023, to ascertain total cost of collection by ASBIR.

ix. Letters from the Office of the Governor authorising release of funds to various beneficiaries to ascertain if there is appropriate approval before payments are made to the respective beneficiaries.

c. Spooled Paydirect settlement position reports covering the period from 1 June 2015 to 31 May 2023 in order to independently verify total IGR collections through Paydirect.

d. Determined actual amount to be settled to the State by deducting relevant fees¹⁶from total cleared collections¹⁷.

e. Reconciled actual amount to be settled to the State in (d) above with the remittable amount contained in the Paydirect settlement position reports and noted any variance i.e., excess or shortfall in the amount to be settled to the State.

f. Spooled Paydirect settlement split reports covering the period from 1 June 2015 to 31 May 2023 in order to independently verify beneficiaries of IGR collections through Paydirect.

¹³See Appendix 10.3 for details of all account statements provided by the circularised banks. ¹⁴Although the State’s mandate is for the review to cover the period from 29 May 2015 to 28 May 2023. ASBIR however prepares its reports monthly, and therefore could only provide monthly figures. ¹⁵See Appendix 10.12 for details of ASBIR overhead bank accounts used for cost of collection . ¹⁶Fees include fees paid to vendors engaged by ASBIR (i.e., ISO Fee, VAS Provider Fee and Terminal Owner Fee), Collecting Banks Fee, Interswitch Fee and Lead Bank Fee.

¹⁷This refers to total collections through Paydirect by all collecting banks.

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Provision of Process Review Services Project Azumini – Final Report of Factual Findings March 2024

g. Traced the settlement amount contained in the Paydirect settlement split reports to nine (9) bank accounts¹⁸to identify leakages in the collection and remittance process.

h. Analysed six (6) bank accounts¹⁹maintained by ASBIR to ascertain specific IGR collections.

i. Analysed nine (9) bank accounts²⁰maintained by ASBIR for Paydirect collections to ascertain IGR collections outside of Paydirect.

j. Performed desktop search and reviewed the nominal roll to identify possible relationships and/or collusion between officials of ASBIR and the beneficiaries of the payments from ASBIR bank accounts.

k. Documented process flowcharts to visualise the end-to-end process of collections of IGR and payments to TAMA and other revenue enforcement consultants.

l. Identified improvements opportunities in ASBIR’s revenue collection process and controls and the utilisation of IGR.

1.8 Sources and Description of Documents Obtained

We did not perform any scientific test on any of the records and / or information provided to us by ABSG and/or the circularised banks during this assignment, to ascertain their authenticity, as this type of assignment does not require scientific test on the records. Therefore, our review, analysis and examination of the records and information provided were limited to the content of such records or information.

1.9 Appendices

We have collated copies of the documentation referred to in the footnotes to this report into appendices and should be read in conjunction with the contents of this report.

¹⁸See Appendix 10.12 for details of accounts maintained by the State into which Paydirect settles IGR collections. ¹⁹See Appendix 10.12 for details of ASBIR bank accounts used for specific IGR collections.

²⁰See Appendix 10.12 for details of ASBIR bank accounts used for paydirect collections.

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2 Executive Summary

2.1 Contract Awards

a. ABSG awarded 560 contracts to 231²¹contractors during the period under review, with 520 contracts, having a cumulative contract value of ₦294,824,123,365.79.

b. Notwithstanding that ABSG did not provide sufficient information to enable KPMG to: i. Determine the contract values of the remaining 40 of the 560 contracts.

ii. Independently verify the accuracy and completeness of the ₦294,824,123,365.79 contract value of the 520 contracts.

We analysed available records, noting the following:

2.1.1 Payments to Contractors

a. ABSG paid ₦131,877,519,592.06²²to the 231 contractors, via three (3) means i.e., CFFs (₦71,315,434,474.50), directly from ABSG bank accounts

(₦59,467,035,117.56²³), and procuring MDAs (i.e. Ministry of Works –

₦927,200,000.00 and ASOPADEC – ₦167,850,000.00).

b. We reviewed sample payments of ₦107,234,358,515.21 of the ₦131,877,519,592.06, noting the following exceptions amounting to ₦56,662,966,007.76:

i. ₦15,936,522,309.43 – 63²⁴contractors with no supporting documents maintained by the Cash Office, Office of the AG.

ii. ₦12,800,851,500.00 – Four²⁵(4) contractors for contracts that do not appear to exist, per available records and discussions with relevant officials. These include:

▪ ₦10,000,000,000 to Ferotex on 25 September 2020 for the “construction of Abia State airport”.

▪ ₦2,000,000,000.00 on 6 June 2022 and 1 September 2022 to Logistics De Luke, for the “delivery of 22 different brand-new vehicles”.

iii. ₦9,279,800,000.00 – Seven²⁶(7) contractors with no records that the contracts were executed, per schedules of contracts provided and discussions with relevant officials.

iv. ₦4,000,000,000.00, where substantial upfront payments (i.e. 92% of contract value) was made to Track Care Global Construction for six (6) projects.

²¹Ministry of Works and Industry did not provide sufficient information to determine the contractors for 8 contracts. ²²Per the schedule of loans provided by Cash Office, offer letters provided by UBA and Access Bank, identifiable transaction narrations in the 77 bank accounts in 14 banks and records provided by 7 Ministries. ²³It is important to note that there might be additional payments below ₦50,000,000.00 made to the contractors not identified due to unidentifiable narrations such as “NEFT”, which is not included in our sampling. ²⁴See Appendix 11 in the excel workbook for the details of 63 contractors.

²⁵See Appendix 12 in the excel workbook for the details of four (4) contractors.

²⁶See Appendix 13 in the excel workbook for the details of seven (7) contractors.

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Moreover, two (2) of the six (6) projects paid for, were still ongoing per the Ministry of Works schedule, as at the date of this report.

v. ₦1,100,000,000.00 – Tunnel End for four (4) of six (6) contracts that appear to have been awarded / re-awarded to other contractors, even though Tunnel End was paid for the six (6) contracts.

vi. ₦7,461,585,866.44 – 44²⁷contractors using Payment Voucher Substitutes (PVS) instead of the required payment vouchers.

vii. ₦3,978,304,675.45 – 48²⁸contractors with inadequate supporting documents maintained by the State i.e. any one of the payment vouchers, approvals from TPO, budgetary allocation and e-payment bank mandates were not maintained.

viii.₦1,057,776,656.44 – 17²⁹contractors but signed by only one of the two (2) required signatories, contrary to ABSG mandates with UBA, Zenith Bank and Access Bank. However, UBA and Zenith Bank provided regularised copies of the payment vouchers, indicating that the second signatory also subsequently

authorised the payment mandates.

ix. ₦927,200,000.00 – 14³⁰contractors, but Ministry of Works did not provide any supporting documents to determine the business justification for the payments.

x. ₦120,925,000.00 – Six³¹(6) contractors, where approval for the payments were made after the payments to the contractors i.e., payments made before TPO approval.

2.1.2 Selection of Contractors and Award of Contracts

a. The rate of non-compliance to due process relating to the selection of contractors and award of contracts is 64%, for a sample of 95 contracts (85 contracts valued at ₦157,344,353,425.87 through tendering and 10 contracts valued ₦5,000,683,974.00 through Direct Labour reviewed. Instances of non-compliance include:

i. Six (6) MDAs did not provide “Certificate of No Objection” from the Bureau of Public Procurement for 82³²contracts worth ₦156,759,362,425.87, contrary to Section 21 (h) and Section 18 (4) of State Public Procurement Law.

ii. Six (6) MDAs³³did not provide record of bid evaluation for 72³⁴of the 85 sampled contracts with a cumulative value of ₦98,570,680,828.07, contrary to

²⁷See Appendix 14 in the MS Excel workbook for details of the 44 contractors.

²⁸See Appendix 15 in the MS Excel workbook for details of the 48 contractors.

²⁹See Appendix 16 in the MS Excel workbook for details of the 17 contractors.

³⁰See Table 7.2.3.1 of the detailed report for details.

³¹See Appendix 17 in the MS Excel workbook for details of the 6 contractors.

³²See Appendix 18 in the MS Excel workbook for details of the 82 contracts from 6 MDAs.

³³Ministry of Works, Office of the Governor, Housing, ASOPADEC, Public Utilities and Water Resources and Finance.

³⁴See Appendix 19 in the MS Excel workbook for details.

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Section 24 of Abia State Procurement Law and Section 3303 of the Abia State

Financial Regulations.

iii. No record that the Governor approved 35³⁵contracts amounting to

₦83,382,082,143.10, in line with ABSG’s practice.

iv. Ministry of Works awarded ₦2,831,458,377.40 worth of contracts to Arab

Contractors for the “Reconstruction of Aba Road Umuahia from Enugu – Port

Harcourt Express way junction to Railway Crossing at Old Umuahia”, without

records of competitive bids, contrary to Section 26 (1) of the State’s Procurement law.

v. Ministry of Works awarded ₦1,418,714,000.00 contract for the “Construction of Itukpa to Ossa Ukwu; Mgboko-Obete to Iheorji Road in Obingwa LGA” to Gemp

Engineering, despite Gemp Engineering submitting bid after the due date of

the ITT.

In addition to the findings above, no sufficient records exist to identify if there was any collusion with the beneficiaries of the afore-mentioned payments. Nonetheless, identified possible conflict of interest is documented in section 2.2.4.

2.2 Bank Accounts

2.2.1 Signatories to bank accounts maintained by ABSG

a. Contrary to ABSG mandates with the 14 banks, which require two (2) signatories for all payment instructions/mandates, there are 132 instances (see Table 2.2.1 below) where only one signatory authorised payments totalling ₦4,667,087,700.66 (i.e.,

₦4,373,187,700.66 – UBA, ₦15,000,000.00 – Zenith Bank, ₦270,000,000.00 – Access Bank and ₦8,900,000.00 – Polaris Bank) to various beneficiaries³⁶.

Table 2.2.1: Exceptions noted from the review of e-payment bank mandates vis-à-vis their authorised signatories

S/N	Signed only by:	Number of payments	Amount (₦)	Second Signatory that did not sign	Period
1	Immediate past State Cashier (Kelechi Imeoria)	88	3,547,417,700.66	Former AG (Onyedielefu Gabriel)	29 May 2015 – 30 July 2018
2	Former AG (Onyedielefu Gabriel)	3	553,370,000.00	Immediate past State Cashier (Kelechi Imeoria)	29 May 2015 – 30 July 2018
3	State Cashier (Okechwukwu Gberemakor)	36	509,400,000.00	The Immediate past AG (Kelechi Imeoria)	31 July 2018 – 28 May 2023
4	The Immediate past AG (Kelechi Imeoria)	5	56,900,000.00	State Cashier (Okechwukwu Gberemakor)	31 July 2018 – 28 May 2023
Total		132	4,667,087,700.66

Source: Compiled by KPMG from the records provided by the 14 banks.

³⁵See Appendix 20 of the MS Excel workbook for details.

³⁶See Appendix 10.7.

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UBA and Zenith Banks’ Responses

a. UBA and Zenith Bank confirmed the instances where they both made payments with payment mandates signed by only one signatory, due to the unavailability of the second signatory, but subsequently regularised upon the availability of the second signatory.

b. However, UBA did not provide the regularised mandates for nine (9) payments (i.e. ₦179,870,000.000) out of its 122 instances.

2.2.2 Bank Balances as at 28 May 2023

a. During the period from 29 May 2015 to 28 May 2023³⁷, ABSG maintained 78 bank accounts with 14 of the 35³⁸circularised banks, with a net credit balance of ₦3,495,207,127.14 as at 28 May 2023.

2.2.3 Review of payments by ABSG from UBA and Zenith Bank

ABSG made the following payments that have exceptions:

a. ₦85,781,077,523.68 (UBA) and ₦13,863,892,419.88 (Zenith Bank) – No payment vouchers or payment instructions/mandates or both.

b. ₦33,877,639,399.16 (UBA) and ₦2,337,420,000.00 (Zenith Bank) – Not supported with payment vouchers but subsequently utilized payment voucher substitutes (PVS), which are filled after the payments have been made, to regularize absence of payment vouchers.

c. ₦1,113,680,000.00 (UBA) payments were made before TPO approvals, while ₦136,367,350.00 (UBA) were with no TPO approval.

d. Cash withdrawals of ₦6,281,860,830.00 and ₦11,229,300,000.00 from Government House accounts of UBA and Zenith Bank respectively.

2.2.4 Possible Conflict of Interest

a. Possible conflict of interest involving ten (10) ABSG officials³⁹, who are directors in seven (7) companies. The companies benefited from contracts awards amounting to ₦203,625,000.00.

2.2.5 Bank Charges and interest on Credit Facilities obtained from UBA, Zenith Bank and Union Bank

a. ₦211,290,712.10 – Due to Abia State from UBA, because of overcharge on COT and Current Account Maintenance Fee, as well as interest on Term Loan, Temporary Overdrafts and CFFs by UBA.

³⁷Except as otherwise indicated in this report.

³⁸These are list of licensed DMBs retrieved from CBN websites.

³⁹See appendix 10.15 for details of the ten (10) ABSG officials and the seven (7) companies.

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b. ₦443,734.43 – Due to Zenith Bank, based on undercharge of interest on Temporary Overdrafts by Zenith Bank.

c. ₦12,933,374.49 – Due to Union Bank, based on undercharge of interest on term loan by Union Bank.

2.3 Sale and Disposal of Public Assets

a. Notwithstanding that ABSG’s 2015 to 2021 annual reports, reflect that the Ministry of Transport disposed unserviceable vehicles amounting to ₦8,406,150.00, five (5) MDAs circularised i.e., Housing, Transport, Education, Health and Government House;

i. Reported that they did not sell or dispose any public assets.

ii. Do not maintain asset register/schedule and therefore did not provide schedule of any public assets disposed or sold.

b. The above MDAs do not include the Ministry of Lands, Survey and Urban Planning, who provided schedule of land allocation. Various exceptions noted in the allocation of lands to 91 individuals and businesses include allotees, who did not submit application letters, who submitted application letters after receiving offer letters, who did not pay the application fees, etc.

2.4 Utilisation of Funds from Federation Accounts Allocation Committee (FAAC) 2.4.1 Collection and Utilisation of Funds from FAAC

Collection

a. Excluding reversals of ₦28,963,869,442.72, the total net inflows and outflows from the FAAC accounts are ₦468,356,645,293.64 and ₦465,991,676,382.39 respectively, with a consolidated closing balance of ₦2,169,406,016.88, as at 28 May 2023.

b. Of the total net inflows of ₦468,356,645,293.64, ₦394,374,765,886.03 specifically relates to FAAC Collection.

Utilisation

a. ₦462,219,772,748.67 comprising loan repayments, inter-account and inter-bank transfers, as well as payments to FIRS appear to be legitimate⁴⁰.

b. ₦3,294,788,036.80 (68 payments) to MDAs, Government House (and some Officials) and Contractors were without supporting documents and contrary to the expected outflows from the FAAC accounts (i.e., inter-account/inter-bank transfers, loan repayments & CFFs, or bank charges)⁴⁰.

⁴⁰Exhibit 39 – Confirmation of Understanding between KPMG and the Chief Accountant, Cash Office, Office of the AG dated 28 November 2023.

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2.5 Utilisation of credit facilities obtained by ABSG from UBA, Zenith Bank and Union Bank

a. ₦12,462,841,836.43 (UBA) and ₦4,100,000,000.00 (Zenith Bank) – Insufficient records to determine if utilised as intended or not.

b. ₦2,500,000,000.00 (UBA), ₦1,000,000,000.00 (Zenith Bank) and ₦250,000,000.00 (Union Bank) were not utilised as intended.

i. UBA facilities were intended and obtained to either meet urgent security issues in the State or urgent need for the payment of parastatals salaries and subvention. However, they were all utilised to reduce the overdraft balance in the FAAC Accounts.

ii. No records reflecting that the ₦250,000,000.00 obtained from Union Bank was utilised for the payment of salaries of health workers as stated in the offer letter.

2.6 Collection and Utilisation of IGR by ASBIR

a. ASBIR reported IGR collections of ₦81,103,735,120.95 instead of ₦82,610,062,727.79 for the period from 1 June 2015 to 31 May 2023. The ₦1,506,327,606.84 not reported was however noted in the bank statements.

b. Interswitch did not remit ₦27,164,671.09 IGR collections due to the State.

c. ₦1,653,922,058.57 vendors’ fee paid/deducted from IGR, has the following exceptions:

i. ₦649,787,065.21 represents over-payment to Atolok. Contrary to the appointment letter dated 17 August 2020, instructed Interswitch to settle 5% and 6.7% of the total IGR Collections to Atolok on 30 December 2020 and 12 February 2021 respectively, instead of the 1.7% of total IGR Collections and 5% in excess of ₦600,000,000.00 contained in the appointment letter dated 17 August 2020.

ii. ₦503,552,134.36 is for ByteWorks, covering 1 October 2022 to 31 March 2023, was not supported with a contract agreement. However, the Secretary, ASBIR stated that ByteWorks rendered the service during the period.

iii. ₦500,582,859.00 was deducted and paid to Marabef, without any Letter of Instruction supporting the deduction.

iv. ₦2,279,572,500.00 (105 payments) were based on release letters from the Office of the Governor to certain Individuals, Contractors and MDAs without other documents supporting the payments.

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v. ₦891,521,642.13 transferred to MDAs was based on a written approval from the Office of the Governor, stating that 20% of IGR collected by revenue generating MDAs be paid to such MDAs⁴¹, but no law supporting the Governor’s approval was provided.

vi. ₦135,494,385.23 (Local Government) – The DF, ASBIR stated that the payment relates to Abia Property and Land Use Charge paid to local governments in the State.

d. Other observations include:

i. Non-maintenance of schedule of ASBIR bank accounts, as required by Abia State Tax Consolidation and Codification Law of 2020.

ii. IGR collections through USSD paid into an unrelated account i.e., BIR Mbaisii Land Acquisition account.

iii. Non-reconciliation of Paydirect collections and settlement.

iv. Non-compliance with the Law on remittance of IGRs into only one (1) dedicated account. Rather, ASBIR remitted IGR collections into seven (7) accounts maintained by the Office of the AG (3) and ASBIR (4).

⁴¹See section 8.3.2.1.3 for the details of cost of collections to the eight (8) MDAs.

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Detailed Findings

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3 Contract Awards

Objectives: Ascertain whether due process was followed or not, in the selection of contractors, award of contracts and payments to the contractors by ABSG. In addition, identify any possible collusion with beneficiaries.

3.1 Contracting Process

Per review of Abia State Public Procurement Law 2012 and Financial Regulations 2001, as well as process understanding discussions with relevant ABSG officials⁴², ABSG’s contracting process is as follows:

a. The contract award process could either be initiated by the procuring Ministry through a letter to the Governor or by the State Governor directly.

b. The State Governor directly identifies projects, due to the strategic and economic need of the State, and then mobilizes the Ministry to commence the contracting process.

c. The procuring Ministry also initiates a request through a letter to the State Governor requesting for approval to commence a project, which would have been budgeted for in ABSG’s Annual Budget.

d. The procuring Ministry advertises and solicits for bids through the following procurement methods:

i. Selective Tendering

The procuring Ministry selects existing contractors based on the contractors previous performance and capacity to deliver on the contract. This process is considered, where the project is urgent or upon urgent request of the State Governor and the general tendering process is assessed to be time consuming.

ii. Open Competitive Bidding

The procuring Ministry advertises for bids in the State’s newspaper, on its notice board, at least two national newspapers and any official website of the procuring entity.

e. The Procuring entity utilizes the period between advertisement and bid submission deadline to prepare in-house estimates.

f. The Ministerial Tenders Board (MTB) opens submitted bids in the presence of the procuring Ministry and bidders or their representatives.

g. The MTB evaluates the submitted bids and forwards a brief of the meeting (which includes the analysis of the tenders and the recommended contractor) to the State’s Tenders Board, referred to as Finance and General Purpose Committee (F&GPC), where the contract is ₦50,000,000 and above for consideration.

⁴²Exhibit 1 – Confirmation of Understanding between KPMG and the DPRS and DF in the Ministry of Works dated 7 July 2023.

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h. F&GPC reviews and ratifies the tender documents forwarded and then sends to the State Executive Council (Exco) for final approval.

i. Upon final approval, the Secretary, F&GPC issues contract award letter to the Contractor.

3.2 Contract Award – MDA’s View

a. Per the schedule of contracts provided by the relevant MDAs⁴³, F&GPC and downloaded from Abia State E-Procurement Website⁴⁴, ABSG awarded 560 contracts to 231⁴⁵ contractors during the period under review. Of the 560 contracts, 520 had a cumulative contract value of ₦294,824,123,365.79, while information provided by ABSG is insufficient to determine the contract value of the remaining 40 contracts, as well as to independently verify the accuracy and completeness of the ₦294,824,123,365.79. See table 3.2 for details.

Table 3.2: Summary of 520 Contracts awarded by ABSG

S/N	MDA	Number of Contracts	Contract Value (₦)
1	Works	227	269,812,168,888.95
2	Office of the Governor	25	6,755,456,674.55
3	Housing⁴⁶	32	5,778,511,591.00
4	ASOPADEC	140	3,744,462,630.00
5	Public Utilities and Water Resources⁴⁷	14	1,843,745,107.70
6	Education	28	1,636,522,900.00
7	Environment	2	1,503,935,200.00
8	Local Government and Chieftaincy Affairs	2	1,200,861,604.87
9	Youth and Sports Development	1	1,200,000,000.00
10	Health	44	829,364,626.00
11	Industry⁴⁸	1	250,095,000.00
12	Finance	1	245,999,142.72
13	Agriculture	3	23,000,000.00
	Total	520	294,824,123,365.79

Source: Compiled by KPMG from records provided by ABSG.

⁴³Ministry of Works, Housing, Education and Office of the Governor.

⁴⁴Retrieved on 5 August 2023 from Contract Award Publication | Abia StatEe Government.

⁴⁵Ministry of Works and Industry did not provide sufficient information to determine the contractors for 8 contracts. ⁴⁶Now Ministry of Lands and Housing from 29 May 2023.

⁴⁷Now Ministry of Power and Public Utilities from 29 May 2023.

⁴⁸Now Ministry of Trade, Commerce and Industry from 29 May 2023.

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3.3 Selection of Contractors and Award of Contracts – MDA’s View

a. We selected a sample of 233 contracts amounting to ₦219,720,085,922.69 representing 75% of the total contract value, to ascertain whether due process was followed or not. Six⁴⁹(6) of the 13 MDAs circularised did not provide supporting documents⁵⁰for 138 contracts, amounting to ₦57,375,048,522.82 worth of contracts awarded to contractors.

b. Consequently, we were provided with the 95 contracts amounting to ₦162,345,037,399.87 i.e., 85 contracts, (₦157,344,353,425.87) through tendering and 10 contracts (₦5,000,683,974.00) through Direct Labour, as documented in table 3.3 below.

Table 3.3: Summary of sampled Contracts awarded by ABSG

MDAs	Number of Sample requested	Sampled Amount requested (₦)	Tendering		Direct Labour		MDA’s rationale
			Number of contracts provided	Amount of contracts provided (₦)	Number of contracts provided	Amount of contracts provided (₦)
Works	70	195,892,863,343.85	46	149,449,291,456.60	3	1,761,072,500.00	a. Ministry of Works provided documents for only 53 of the 70 sample contract requested. We however reviewed 49 contracts as 4 are yet to commence. b. Ministry of Works did not provide all documents requested stating that several other parties including the Panel of enquiry and EFCC, were also requesting for the same contracts documents requested.

⁴⁹Ministry of Education, Environment, LGC Affairs, Health, Industry and Agriculture.

⁵⁰The expected supporting documents include Invitation to bid, award letters, tenders, quotations, agreements, minutes of MTB, payment vouchers, Interim certificates, Final Completion certificates etc.

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MDAs	Number of Sample requested	Sampled Amount requested (₦)	Tendering		Direct Labour		MDA’s rationale
MDAs	Number of Sample requested	Sampled Amount requested (₦)	Number of contracts provided	Amount of contracts provided (₦)	Number of contracts provided	Amount of contracts provided (₦)	MDA’s rationale
							c. Of the 70 requested, contract files for 53 contracts were provided, with 4 contracts yet to commence, hence we reviewed 49 contracts.
Office of the Governor	25	6,755,456,674.55	21	3,423,806,674.55	–	–
Housing⁵¹	32	5,778,511,591.00	–	–	7	3,239,611,474.00
ASOPADEC	10	2,559,730,732.00	6	1,501,486,560.00	–	–	The DPRS and Cashier, ASOPADEC stated that of the sample of 10 contracts requested: a. The contract files for three (3) contracts amounting to ₦756,692,614.00, could not be located. b. The project “Grading of 10KM Amaiyi Obiloha road” by Direct Labour amounting to ₦301,551,558 does not exist.
Public Utilities and Water Resources⁵²	14	1,843,745,107.70	10	1,523,769,592.00	–	–	The Ministry stated that only 10 of the 14 contracts files could be located.

⁵¹Now Ministry of Lands and Housing from 29 May 2023. ⁵²Now Ministry of Power and Public Utilities from 29 May 2023.

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MDAs	Number of Sample requested	Sampled Amount requested (₦)	Tendering		Direct Labour		MDA’s rationale
MDAs	Number of Sample requested	Sampled Amount requested (₦)	Number of contracts provided	Amount of contracts provided (₦)	Number of contracts provided	Amount of contracts provided (₦)	MDA’s rationale
Education	28	1,636,522,900.00	–	–	–	–	The DPRS stated⁵³that she is not informed of the contracting process in the Ministry. She is only aware of one (1) contract, Construction of 24 shops at Tenant Road, Aba by Stone Technology Electromart Company Ltd, during the period under review for which she does not know the contract value.
Environment	2	1,503,935,200.00	–	–	–	–	Ministry of Environment provided supporting documents for one (1) contract, Reclamation/Erosion Control at Umueledi Village, Old Umuahia by Ngamec Nigeria Ltd amounting to ₦1,200,861,604.87. However, the award letter provided, which is not consistent with the schedule provided by the Secretary, F&GPC, indicate that the project was awarded on 12 June 2014, which is not within the period under review.
Local Government	2	1,200,861,604.87	–	–	–	–	The Permanent Secretary represented⁵⁴that all the officers

⁵³Exhibit 2 – Confirmation of understanding between KPMG and the DPRS, Ministry of Education dated 20 November 2023. ⁵⁴Exhibit 3 – Response letter provided by Ministry of Local Government and Chieftaincy Affairs dated 21 November 2023.

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MDAs	Number of Sample requested	Sampled Amount requested (₦)	Tendering		Direct Labour		MDA’s rationale
MDAs	Number of Sample requested	Sampled Amount requested (₦)	Number of contracts provided	Amount of contracts provided (₦)	Number of contracts provided	Amount of contracts provided (₦)	MDA’s rationale
and Chieftaincy Affairs							are new to the Ministry and they could not locate any of the records to support the sample contracts requested.
Youth and Sports Development	1	1,200,000,000.00	1	1,200,000,000.00	–	–	Not applicable
Health	44	829,364,626.00	–	–	–	–	Ministry of Health responded to the circlarisation letter of 4 September 2023, on 19 December 2023, representing that the contracts awarded by the Ministry were executed through Direct Labour. The Ministry did not provide supporting documents for the contracts.
Industry⁵⁵	1	250,095,000.00	–	–	–	–	The Ministry did not respond to the circularisation letter of 19 October 2023 and our most recent follow up on 29 January 2024.
Finance	1	245,999,142.72	1	245,999,142.72	–	–
Agriculture	3	23,000,000.00	–	–	–	–	The Ministry represented on 8 December 2023, that the requested contracts were taken over by the Ministry of Digital

⁵⁵Now Ministry of Trade, Commerce and Industry from 29 May 2023.

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MDAs	Number of Sample requested	Sampled Amount requested (₦)	Tendering		Direct Labour		MDA’s rationale
MDAs	Number of Sample requested	Sampled Amount requested (₦)	Number of contracts provided	Amount of contracts provided (₦)	Number of contracts provided	Amount of contracts provided (₦)	MDA’s rationale
							Economy and SME and therefore would be in a better position to provide the information for the contracts. Ministry of Digital Economy and SME responded to our circularization letter on 21 December 2023, however the Ministry did not provide sufficient records.
Total	233	219,720,085,922.69	85	157,344,353,425.87	10	5,000,683,974.00

Source: Compiled by KPMG from records provided by ABSG.

3.3.1 85 contracts amounting to ₦157,344,353,425.87 executed through Tendering process – MDA’s View

We reviewed the supporting documents provided by the seven⁵⁶(7) MDAs for 85 contracts totalling to ₦157,344,353,425.87, awarded to 53 contractors, noting an average non-compliance rate of 65% (i.e., 69% average non-compliance rate in selection of contractors and 61% in award of contracts), as outlined in Table 3.3.1 below and Appendix 10.14 for details.

⁵⁶Ministry of Works, Office of the Governor, Housing, ASOPADEC, Public Utilities and Water Resources, Youth and Finance.

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Table 3.3.1: Summary of observations on contract award process for sampled contracts

S/N	Contracting Phase	Requirements	Number of non compliant contracts A	Value of non- compliant contracts (₦)	Non-compliance rate (%) A/85
1	Selection	Governor’s approval	35	83,382,082,143.10	41%
2		Record of advertisement / Invitation to bid	73	95,225,934,678.78	86%
3		Record of In-house estimate	33	9,823,996,672.27	39%
4		Contractors bid documents	69	118,704,268,815.67	81%
5		Record of bid opening	85	157,344,353,425.87	100%
6		Ministry’s evaluation report	72	98,570,680,828.07	85%
7		MTB memo on recommended contractor	43	56,435,196,068.37	51%
8	Approval & Award of Contract	F&GPC memo on selected contractor	62	140,560,158,959.61	73%
9		Exco conclusion	69	156,838,392,944.87	81%
10		Record of “No Objection” from BPP	82	156,759,362,425.87	96%
11		Award letter	21	97,728,315,044.27	25%
12		Acceptance of award letter	56	64,394,664,822.37	66%
13		Record of signed contract agreement	45	32,492,586,431.07	53%
14		Record of vetting by the MOJ	49	80,101,498,607.67	58%
15		Final Completion Certificate / Goods Received Note	27	20,785,563,834.91	32%
Average non-compliance rate					64%

Source: Compiled by KPMG from Contracts files provided by ABSG.

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3.3.1.1 Selection Process

3.3.1.1.1 No record of Governor’s approval for 35 contracts

a. Discussion with relevant officials⁵⁷in the Ministries⁵⁸indicate that the Governor approves a project prior to the commencement of the contracting process. However, there is no record that the Governor approved 35 contracts amounting to ₦83,382,082,143.10.

3.3.1.1.2 Non-adherence to advertisement / invitation to bid for 73 contracts

Findings relating to the 73 non-complaint contracts totalling ₦95,225,934,678.78 are documented below: See Appendix 10.14 for details.

a. No record of advertisement for 73 contracts amounting ₦95,225,934,678.78

i. Section 26 (1) of the State’s Procurement law states that “all procurement of goods and works by all procuring entities shall be conducted by open competitive biding. Section 27 (1) further states that invitation to bid may be either by way of State Competitive Bidding or Nation Competitive Bidding.

ii. The Office of the Governor, ASOPADEC, Ministry of Works and Public Utilities and Water Resources did not provide record of advertisements of tender opportunity for 76 contracts amounting to ₦95,225,934,678.78 on the State’s newspaper, on its notice board, at least two national newspapers and any official website of the procuring entity.

iii. For Ministry of Works, the DPRS stated that where there is no ITT, It could either be due to missing records or the contracts were solicited through single sourcing or selective bidding i.e. the Ministry invites selected contractors to bid for the identified project. However, the DPRS did not provide record or justification to support his statement.

iv. The other Ministries are did not provide responses as at the date of this report.

v. Furthermore, the Ministries did not indicate or provide justification for the contracting method (i.e. single sourcing or selective bidding) utilised in a contracting process.

b. Contract awarded to Gemp Engineering despite late submission of bid amounting ₦1,418,714,000.00

Ministry of Works awarded for the “Construction of Itukpa to Ossa Ukwu to Mgboko to Obete to Iheorji Road, Obingwa LGA” amounting to ₦1,418,714,000.00 to Gemp Engineering despite submitting bids after the due date of the ITT. The Ministry of Works acted contrary to Section 29 of the Abia State Procurement Law 2012, which states that “any bid received after the deadline for the submission of bids shall not be opened and

⁵⁷DPRS and DF Ministry of Works, DQS Ministry of Housing, DF, Ministry of Health.

⁵⁸Ministry of Works, Ministry of Housing, and Ministry of Health.

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must be returned to the supplier or contractor which submitted it”. The Ministry did not provide a justification for the deviation of the policy.

Table 3.3.1.1.2: Late submission of bids

S/N	Name of Project	Contract Value (₦)	Bidder	Bid due date	Date of bid submission	Number of days after bid submission deadline
1	Construction of Itukpa to Ossa Ukwu to Mgboko to Obete to Iheorji Road, Obingwa LGA	1,418,714,000.00	Mauphil Company Enterprises	14-Jun 19	21-Jun-19	7
			Gemp Engineering Limited		24-Jun-19	21
			Admau Integrated Service		15-Jul-19	31
Total		1,418,714,000.00

Source: Compiled by KPMG from Contract files provided by ABSG.

3.3.1.1.3 No record of In-house estimate for 33 contracts

a. In-house estimate is a rough approximation of the potential cost of construction or procurement. It enables the procuring Ministry make informed and data driven decision when evaluating and selecting a contractor. Per ABSG practice, the In-house estimate should precede the evaluation of submitted bids. However, there is no record of inhouse estimate for 33 contracts amounting to ₦9,823,996,672.27. See Appendix 10.14 for details.

b. The In-house estimate provided by the Ministry of Finance, Works, Youth, Public Utilities and Water Resources and the Office of the Governor is not dated, hence there is insufficient information to determine the timing of the In-house estimate as stated in the aforementioned practice.

3.3.1.1.4 Award of contracts to contractors despite incomplete bid documents for 69 contracts

a. Per section 18 (6) of Abia State procurement law, all bidders in addition to requirements contained in any solicitation documents shall posess:

i. Professional and technical qualifications to carry out particular procurements

ii. Financial capacity

iii. Equipment and other relevant infrastructure

iv. Legal capacity to enter into the procurement contract

v. All its obligations to pay taxes, pensions and social security contributions

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b. Other requirements, in addition to aforementioned requirements, per discussions with the Ministries⁵⁹and the ITT document include:

i. Proposal / Quotation.

ii. Record of contractor registration with Abia State Ministry of Works as contractor. iii. Record of payment of non-refundable tender fees.

c. However, we noted 69 contracts amounting to ₦118,704,268,815.67, which were awarded to contractors with incomplete bid documents. See Appendix 10.14 for details.

3.3.1.1.5 No record of bid opening for 85 contracts

a. The seven (7) Ministries⁶⁰did not provide record of bid opening for the 85 sampled contracts with a cumulative value of ₦157,344,353,425.87.

b. Consequently, there is no record that the seven (7) Ministries complied with Section 32 of the State’s Procurement Law, which requires that all bids be opened in public, in the presence of the bidders or their representative and any interested member of the public. See Appendix 10.14 for details.

3.3.1.1.6 No record of Ministry’s Evaluation for 72 contracts

a. According to Section 34 of the Abia State Procurement Law, “a contract shall be awarded to the lowest evaluated responsive bid from the bidders substantially responsive to the bid solicitation. Furthermore, Section 24 of Abia State Procurement Law and Section 3303 of the Abia State Financial Regulations reflect that the relevant tender board has the responsibility for the evaluation of bids.

b. The Ministry of Works, Finance, Public Utilities and Water Resources, Office of the Governor and ASOPADEC did not provide record of bid evaluation for 72 of the 85 sampled contracts with a cumulative value of ₦98,570,680,828.07.

c. Consequently, there is no record that the Ministries complied with the relevant law and regulations for the 72 contracts.

3.3.1.1.7 Non-adherence to MTB recommendation to F&GPC for 43 contracts

a. According to the relevant law and process understanding discussions held with the relevant Ministries, where the contract is ₦50,000,000 and above, the MTB forwards recommended contractor to F&GPC for approval.

b. However, there is no record that the Office of the Governor, ASOPADEC, Ministry of Works and Public Utilities and Water Resources forwarded MTB recommendation for 43 contracts, amounting to ₦56,435,196,068.37 for contracts above the ₦50,000,000 threshold.

⁵⁹Ministry of Works, Ministry of Housing, and Ministry of Health.

⁶⁰Ministry of Works, Office of the Governor, Housing, ASOPADEC, Public Utilities and Water Resources, Youth and Finance.

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings March 2024

3.3.1.2 Award of Contract

3.3.1.2.1 Non provision of F&GPC recommendation to the Executive Council for 62 contracts

a. The Secretary, F&GPC did not provide recommendations to the Executive Council for 62 of 69 sample contracts within the threshold of F&GPC, with a cumulative value of ₦140,560,158,959.61.

b. However, we sighted F&GPC recommendation for 7 contracts in line with Section 19 (aiii) of the State’s Procurement Law.

c. Consequently, there is no record that F&GPC complied with Section 19 (aiii) of the State’s Procurement Law and Section 3302 (iii) of the State’s Financial Regulations that require F&GPC to submit contracts awarded by it to the Executive Council for approval.

3.3.1.2.2 Non provision of Exco conclusion for 69 contracts

a. The office of the SSG did not provide the Exco approval on the recommended contractors for 69 sampled contracts within the threshold of Exco, with a cumulative value of ₦156,838,392,944.87.

b. Consequently, there is no record that Exco approved the recommended bidders in line with the relevant law and regulation.

3.3.1.2.3 Awarding of the Contracts

a. No record of Award Letter – 21 contracts

i. The relevant MDAs⁶¹did not provide award letters for 21 contracts with a cumulative value of ₦97,728,315,044.27, and thus there is no record that the Ministries adhered to the section 3317 of the State’s Financial Regulations that require the final award of contract will be to the parties whose tenders have been accepted.

b. Award of contract and payment to Spatial Layers Ltd without due process

i. F&GPC awarded a contract for “Abia State SFTAS Property Enumeration Project Consultants in ten (10) LGAs of Abia State” to Spatial Layers Ltd with a value of ₦245,999,142.72 on 11 May 2021 before Ministry of Finance performed the following procurement activities, which is contrary to the contract award process.

▪ ITT – Ministry of Finance published an ITT on 23 May 2021 after awarding contract to Spatial Layers Ltd (i.e. 12 days before ITT).

▪ Submission of bids – Moreso, Spatial Layers Ltd and other bidders submitted bids during the period from 4 March 2021 to 10 March 2021 before the award letter and ITT was published, indicating that the published bids on 23 May 202 is to

⁶¹ASOPADEC, Ministry of Works and Youth.

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings March 2024

regularize the absence of an ITT in March 2021, when the actual bids were submitted.

▪ MTB meeting – Ministry of Finance MTB held on 24 May 2021, after the award letter has been issued to Spatial Layers Ltd, which is contrary to the relevant laws and regulation.

▪ Payments amounting to ₦245,992,142.75 were made on 9 April 2021 to Spatial Layers Ltd for the contract i.e. (44 days before award of contract).

ii. Furthermore, the project justification indicates that the successful implementation of the project would enable the State to access an inflow of $2.5 million from World Bank.

iii. The DF, Ministry of Finance and Project Accountant stated that the project was successfully implemented and the State is expected to receive the inflow from World Bank into any of the accounts maintained by the State. However, the DF, Ministry of Finance and Project Accountant did not provide any record of project completion.

iv. The Chief Accountant, office of the AG stated that the inflow is received into ABSG Consolidated IGR account with account number “1013892907”.

v. We verified the receipt of the $2.5 million from World Bank in its naira equivalent amounting to ₦994,700,000.00 on 28 March 2021.

3.3.1.2.4 Non-adherence to “Certificate of No Objection” from BPP for 82 contracts

a. Per the State Public Procurement Law, “Certificate of No Objection” means the document evidencing that due process have been followed in the conduct of a procurement proceeding and allowing for the procuring entity to enter into contract.

b. Furthermore, Section 21 (h) of the Law requires the procuring Ministry to obtain a “Certificate of No Objection” to contract award from the Bureau within prior review threshold and Section 18 (4) stipulate that any procurement without a “Certificate of No Objections” to contract Award would be null and void.

c. However, discussion with the Special Adviser, Due Process⁶²reflect that the Bureau was not functional in Abia state since 2012, and therefore did not issue “Certificates of No Objection”.

d. Nonetheless, we reviewed the 82 sampled contracts noting that the Ministry of Public Utilities and Water Resources obtained “Certificate of No Objection” for three (3) contracts amounting to ₦584,991,000.00 in 2016, 2017 and 2018, which is contrary to the assertion by the Special Adviser, Due Process.

e. Hence, there is no record that 82 contracts amounting to ₦156,759,362,425.87 adhered to the requirement of the Law.

⁶²Formerly Abia State Bureau of Public Procurement.

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings March 2024

3.3.1.2.5 Acceptance of award letter – 56 contracts

a. Discussion with relevant officials⁶³in the Ministries indicate that contractors should accept contract award letter in writing. However, there is no record that 56 contract awards amounting to ₦64,394,664,822.37 were documentarily accepted by contractors.

3.3.1.2.6 No record of signed contract agreement for 45 contracts

a. The relevant Ministries⁶⁴did not provide signed contract agreements for 45 contracts with a cumulative value of ₦32,492,586,431.07, and thus there is no record that the Ministries adhered to the section 3317 of the State’s Financial Regulations that require the selected contractor to sign the contract agreement.

3.3.1.2.7 No record of ratification by MOJ for 49 contracts

a. There is no record that the MOJ ratified 49 contract agreements with a cumulative value of ₦80,101,498,607.67, and thus the Ministries⁶⁵did not adhere to the contracting practice.

3.3.1.2.8 No record of Completion Certificates for 27 contracts

a. The Ministry of Public Utilities and Water Resources and the Office of the Governor did not provide complete information of the status of completion for the 14 of the 85 sampled contracts.

b. However, we reviewed the 71 contracts for which we were provided status of completion, noting no record of final completion certificates for 27 of the 71 contracts, with a cumulative value of ₦20,785,563,834.91.

3.3.2 Ten (10) contracts executed through Direct Labour

a. Direct labour is a method of procurement where the MDA utilizes internal resources to carry out a specified project. The resources could be fully sourced in-house, partially in house or hire of external labour to the MDA.

b. The under-listed Ministries provided records for ten (10) contracts amounting to ₦5,000,683,974.00 executed through Direct Labour.

i. Ministry of Works (3) – ₦1,761,072,500.00

ii. Ministry of Housing (7) – ₦3,239,611,474.00

⁶³DPRS and DF Ministry of Works, DQS Ministry of Housing, DF, Ministry of Health.

⁶⁴Ministry of Works, Office of the Governor, ASOPADEC, Public Utilities and Water Resources, Youth and Finance.

⁶⁵Ministry of Works, Office of the Governor, ASOPADEC, Public Utilities and Water Resources, Youth and Finance.

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings March 2024

c. There is no law or standard operating procedure guiding the execution of contracts through Direct Labour in the State. Consequently, we have documented the practice of contracts execution through Direct Labour with the Ministries, noting inconsistencies in the two (2) Ministries.

3.3.2.1 Ministry of Works – Direct Labour

a. The DPRS stated⁶⁶that the practice of contracts executed through Direct Labour in the Ministry is as follows:

i. The Governor approves a project to be executed directly by the Ministry.

ii. The Ministry invites selected vendors to submit proposals/quotations for the project due to the ministry not having adequate equipment and labour to perform the project in house.

iii. Upon submission of the bids, the MTB meets to evaluate and select the qualifying bidder.

iv. Thereafter, the Ministry then awards the project to the contractor, and signs an MoU with the contractor rather than the Agreement in the normal procurement process.

v. Payments intended for such contracts are made directly into the Ministry’s account. Subsequently, the Ministry settles the contractor. b. Our analysis of the three (3) contracts provided by the Ministry is summarised below

Table 3.3.2.1: Summary of analysis of two (2) contracts

Project Name	Contractor Name	Contract Value (₦)	Governor’s Approval	Bid Documents	Ministry’s evaluation report	Award Letter / Jobbing Order	Record of service delivery
Construction of Itungwa-Owo Ohanze Road (8.1km)	Effdee Nigeria Limited	996,030,000.00	✓	✓	Not applicable due to single sourcing	✓	Ongoing
Rehabilitation/Reconstruction of Faulks Road, Aba	Track Care Global Construction Company Limited	720,000,000.00	×	✓	✓	✓	✓
Rehabilitation of Failed sections in Azikiwe Raod, Goerges street	Track Care Global Construction Company Limited	45,042,500.00	×	✓	✓	✓	Ongoing

⁶⁶Exhibit 3 – Confirmation of Understanding between KPMG and the DPRS and DF in the Ministry of Works dated 7 July 2023.

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings

March 2024

Project Name	Contractor Name	Contract Value (₦)	Governor’s Approval	Bid Documents	Ministry’s evaluation report	Award Letter / Jobbing Order	Record of service delivery
and Georges by Ikot Ekpene road
Total		1,761,072,500.00

Source: Compiled by KPMG from Contract files provided by ABSG.

c. We noted the following in the review of the three (3) contracts provided:

i. No record of Governor’s approval for two (2) contracts

The filing index reflects that the Governor approved the project through Direct Labour. However, the contract file did not contain the document evidencing the written approval from the Governor.

ii. No Ministry’s evaluation report for one (1) contract

▪ There is no record of Ministry of Works’s evaluation report for the construction of Itungwa-Owo Ohanze road from the MTB, reflecting the selection of the qualifying bidder.

▪ There is only one (1) selected vendor for the project, which is contrary to the practice adopted by the Ministry of Works i.e. selective tendering.

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings March 2024

3.3.2.2 Ministry of Housing – Direct Labour

a. Contrary to the practice of Direct Labour in Ministry of Works, the DQS stated⁶⁷that the contract executed through Direct Labour follows the process highlighted below:

i. Governor selects a contractor and requests the Ministry to supervise the execution of the project.

ii. A letter of release of fund is sent to the Ministry from the Office of the Governor for the contract sum to be paid directly to the contractor.

iii. The Ministry monitors the completion rate of the project and an issues an Interim Valuation Certificate to the contractor.

b. The Ministry provided records of seven (7) contracts amounting to ₦3,239,611,474.00 awarded to Denzos International Construction Nigeria Limited (“Denzos”) through

Direct Labor. Our review of the seven (7) contracts revealed the following:

i. One of the seven (7) contracts, “Completion of outstanding, adjusted & renewed works at ABSG new Government House” with a contract value of ₦1,194,944,221.00

were awarded to through tendering process. The Ministry invited bids for tenders for

the project on 27 October 2022, after the Governor instructed the Ministry on 25

October 2022 to execute the project through Direct Labour.

ii. The former Governor instructed Ministry of Housing via a release letter to supervise and pay Denzos for the remaining seven (7) projects.

Table 3.3.2.2: Details of the seven (7) contracts awarded to Denzos

S/N	Project Name	Contract Value (₦)
1	Completion of Outstanding, Adjusted & Renewed Works at ABSG New Government House	1,194,944,221.00
2	Furnishing of the New Government House	852,900,000.00
3	Landscaping work at New Government House premises, Ogurube Layout, Umuahia	650,000,000.00
4	Completion of Drainage, Retaining Wall, Stone Pitch & fence, Gate and Gate Security House	236,990,285.00
5	Construction of 2 Storey Security Staff Lodge Complex	219,076,968.00
6	Painting of and Minor Repair Works in Government Hose Buildings/guest House	50,000,000.00
7	Installation and Supply of Brand New 250KVA Generator Set to Abia State New Government House	35,700,000.00
Total		3,239,611,474.00

Source: Compiled by KPMG from Contracts files provided by Ministry of Housing.

⁶⁷Exhibit 4 – Per representation of the DQS on 19 July 2023.

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings March 2024

3.4 Contract Award – Contractors’ View

a. Of the 560 contracts awarded to 231⁶⁸contractors, 520 contracts had a cumulative contract value of ₦294,824,123,365.79 awarded to 221 contractors. See table 3.4 for details of the contractors 221 contractor below.

b. ABSG did not provide sufficient information⁶⁹to independently verify and validate the completeness of the total number of contracts awarded during the period under review.

Table 3.4: Details of contracts awarded to contractors – contractors’ view

S/N	Contractor of Interest⁷⁰	Number of Contracts	Contract value per schedules⁷¹of Contracts awarded provided by ABSG (₦)	Sample Number of Contracts Provided	Sampled Amount Provided (₦)	Reference
1	Track Care Global Construction Company Limited	28	76,005,747,447.92	13	64,330,627,212.61	Section 3.4.1
2	Tunnel End Investment Company Limited	9	25,702,628,441.82	4	14,348,102,844.00	Section 3.4.2
3	Ferotex Construction Company Limited	13	20,090,274,810.75	3	6,331,398,692.00	Section 3.4.3
4	China Zhonghao Nigeria Limited	4	15,028,209,797.58	2	6,632,779,351.58	Section 3.4.4
5	Hartland Nigeria Limited	1	9,882,752,246.40	1	9,882,752,246.40	Section 3.4.5
6	Ekcleen Integrated Services Nigeria Ltd	8	9,758,491,489.24	3	7,033,691,688.60	Section 3.4.6
7	Setraco Nigeria Limited	1	8,820,045,347.90	1	8,820,045,347.90	Section 3.4.7

⁶⁸Ministry of Works and Industry did not provide sufficient information to determine the contractors for 8 contracts

⁶⁹ABSG does not maintain a schedule of all contracts awarded in the State. However, we requested for a schedule of contracts from F&GPC and other relevant Ministries involved in major contracts during the period under review as well as downloaded a schedule of contracts awarded from Abia State e-procurement website, noting inconsistencies in the schedule of contract awards provided by F&GPC and the relevant Ministries.

⁷⁰The contractors of interest are ordered per the contractors who obtained CFF from the banks to finance projects awarded by ABSG.

⁷¹Schedule of contracts awarded provided by Ministry of Works, Housing, Office of the Governor and Education, F&GPC and downloaded from Abia State E-Procurement Website.

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings

March 2024

S/N	Contractor of Interest⁷⁰	Number of Contracts	Contract value per schedules⁷¹of Contracts awarded provided by ABSG (₦)	Sample Number of Contracts Provided	Sampled Amount Provided (₦)	Reference
8	Rock-Waters Integrated Service Nigeria Ltd	7	8,679,437,713.00	2	5,849,806,876.00	Section 3.4.8
9	Delhope Resources Limited	9	5,604,687,544.11	2	2,906,999,319.11	Section 3.4.9
10	Arab Contractors Limited	2	3,820,618,639.40	2	3,820,618,639.40	Section 3.4.10
11	Masta Service Company Nigeria Limited	1	3,050,000,000.00	–	–	–
12	Yodel Global Resources Limited	4	2,811,832,328.79	3	2,771,832,328.79	Section 3.4.11
13	Sannan Jadoon International Ltd	8	2,151,886,502.00	–	–	–
14	Pumeco Industries Nigeria Ltd	9	2,125,831,856.42	–	–	–
15	Effdee Nigeria Ltd	2	2,093,942,120.00	–	–	–
16	Dawn ‘N’ Daisy Integrated Service Ltd	2	1,416,977,720.00	–	–	–
17	Bulletine Construction Company Ltd	1	1,219,734,140.00	1	1,219,734,140.00	Section 3.4.12
18	PRO-M Limited	2	900,000,000.00	2	900,000,000.00	Section 3.4.13
19	Vision Cars Ltd	1	854,910,000.00	1	854,910,000.00	Section 3.4.14
20	Logistics De-Luke Ltd	2	612,912,925.00	2	612,912,925.00	Section 3.4.15
21	Innoson Vehicle Manufacturing Company Ltd	1	591,000,000.00	–	–	–
Sub-total		115	201,221,921,070.33	42	136,316,211,611.39	–
22	Other contractors summed up	405	93,602,202,295.46	53	26,028,825,788.48	–
Grand Total		520	294,824,123,365.79	95	162,345,037,399.87

Source: Compiled by KPMG from records provided by ABSG and the circularized banks.

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings March 2024

3.4.1 Track Care Global Construction Company (Track Care)

3.4.1.1 Contractor’s Profile

Table 3.4.1.1-1: Profile of Track Care

Item	Details⁷²
Registered Address	No 16, Alexandra Crescent Wuse 2, Abuja
Company Type	Private Company Limited By Shares
Incorporation date	15 Jun 2015
Incorporation number	RC 1267268
Place of Incorporation	Nigeria
Status with CAC	Inactive (See Appendix 10.5.7 for a screenshot of Track Care’s inactive status on CAC’s online portal)
Management	As reflected on NG-check, see details of the Directors below: a. Obioma Christian – Director b. Chibuike Charles Iheadindu – Director c. Ugochukwu Amanzenta – Director

ABSG awarded 29 contracts to Track Care through tendering and Direct Labour during the period under review. 28 of the 29 contracts had a cumulative value of ₦76,005,747,447.92, while information provided by ABSG is not sufficient to determine the contract value for the remaining one (1) contract. See details in the table below.

⁷²Retrieved on 3 November 2023 from CAC – Nigerian Corporate Registry; TRACK CARE GLOBAL CONSTRUCTION CO. LTD Nigeria company profile – address, contacts, owners (ng-check.com).

Document: KPMG Confidential

Table 3.4.1.1-2: Summary of contracts awarded to Track Care

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings March 2024

S/N	Contract	Contract Value (₦)	Sampled Amount Provided (₦)	Contract Type
1	Expansion and Dualization of ururuka Road, Phase 2 from Umuobiakwa, Obingwa L.G.A. to Isicourt Umuahia South L.G.A.	47,418,944,305.00	47,418,944,305.00	Tendering
2	Reconsruction and Expansion/Dualization of Ururuka Road from Obikabia to Umuobiakwa LGA as well as Construction of Roundabout at Obikabia Junction.	6,943,053,078.78	6,943,053,078.78
3	Rehabilitation/Overlaying and Desilting of Drainage and Rigid Pavement of final failed sections of Faulks Road, Aba North LGA, Abia State.	2,703,358,912.00	–
4	Rehabilitation/Reconstruction of Median and Collapsed/Undersized drain at Ikot Ekpene Road dualized Umuoba Road and asphalt overlay at Ukaegbu Road Aba, Abia State.	2,083,654,621.81	–
5	Rehabilitation/Reconstruction of Nsulu/Olokoro – Ikwuano Road.	2,000,000,000.00	–
6	Channelization/Drainage Works and Reconstruction and Rehabilitation of Aba-Owerri Road Phase II from Osisioma Junction to Union Bank, Aba, Abia State.	1,880,394,701.40	1,880,394,701.40
7	Rehabilitation and Resurfacing of Afor Ibeji-Ubakala Road Dualized Phase 2.	1,711,608,091.76	1,711,608,091.76
8	Construction of Umuobiakwa-Umuokatawom-Ossa Okea Road.	1,668,739,300.00	1,668,739,300.00
9	Construction of Umuopara Amano Isiugwu to Mgboko Itungwa in Obingwa LGA, with Gully Erosion Remediation.	1,487,674,927.00	–
10	Construftion of Ukpakiri Abayi, Okoroato-Umuoru Ntighauzor Road in Obingwa LGA, Abia State.	1,143,382,325.00	1,143,382,325.00

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings

March 2024

S/N	Contract	Contract Value (₦)	Sampled Amount Provided (₦)	Contract Type
11	Rehabilitation and Desilting of Drain and Reconstruction of Median at Azikiwe Road, Aba.	1,133,585,890.81	1,133,585,890.81	Tendering
12	Construction of Mgboko Umuoria Akpuga –Mgboko Anya Road, Obingwa LGA.	949,821,970.00	–
13	Asphalt Overlay of 1.3km Dualized Aba – Owerri Road on 2.6km (Single Lane) and Channelized works at Aba – Owerri Road.	657,200,655.00	657,200,655.00
14	Construction of Umuocham-Umuezi-Umuarughi Rd in Obingwa LGA.	650,442,130.00	–
15	Construction of Umuobiakwa to Ohanze Road.	609,805,120.00	–
16	Reconstruction of Afor Ibeji, Old Umuahia Road.	394,900,000.06	394,900,000.06
17	Rehabilitation/Overlaying and Desilting of Drainage for Clifford Road, Aba.	341,460,850.00	–
18	Rehabilitation of Opobo Junction to Emelogu Road.	337,154,154.80	337,154,154.80
19	Rehabilitation/Reconstruction of Road at Clifford University, Ihie in Isiala Ngwa North LGA.	326,773,152.00	–
20	Construction of Umuola – Umuobasi Estate Road, Aba North and Obingwa LGAs, Abia State.	276,622,210.00	276,622,210.00
21	Rehabilitation/Overlaying and Desilting of Drainage for Pound Rd, Aba, Abia State.	150,000,000.00	–
22	Reconstruction of Umunkpeyi Road in Isialangwa South LGA and Umuosu Nsulu in Isialangwa North LGA, Abia State.	125,327,639.70	–
23	Reconstruction of Road and Fence wall at Shoe Plaza, Aba, Abia State.	111,988,642.00	–

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings

March 2024

S/N	Contract	Contract Value (₦)	Sampled Amount Provided (₦)	Contract Type
24	Construction of Okon-Aku Main Bridge.	63,154,570.00	–	Tendering
25	Rehabilitation and Resurfacing of Stella Maris Church Road.	56,657,700.80	–
26	Reconstruction of Ahiaudele Box Culvert and asphaltic concrete overlay of surround.	15,000,000.00	–
27	Reconstruction of Seventh – Day Adventist Church Str. Off Udeagbala Road.	–	–
Subtotal		75,240,704,947.92	63,565,584,712.61
28	Rehabilitation/Reconstruction of Faulks Road, Aba.	720,000,000.00	720,000,000.00	Direct Labour
29	Rehabilitation of failed sections in Azikiwe Raod, Goerges street and Georges by Ikot Ekpene road.	45,042,500.00	45,042,500.00	Direct Labour
Subtotal		765,042,500.00	765,042,500.00
Total		76,005,747,447.92	64,330,627,212.61

Source: Compiled by KPMG from schedules of contract awards provided by ABSG.

3.4.1.2 Selection and award of contracts to Track Care

a. We reviewed the supporting documents provided for 13 sampled contracts totalling to ₦64,330,627,212.61, i.e., 11 contracts through tendering and 2 contracts through Direct Labour, vis-à-vis the contract award and Direct Labour processes, noting the following:

3.4.1.2.1 Non-adherence to selection and award of contracts

a. Our review of the 11 sampled contracts amounting to ₦63,565,584,712.61 through tendering, revealed an average non-compliance rate of 58% as outlined, in table 3.4.1.2.1 below, which indicates that Ministry of Works did not adhere to the required contracting process, before awarding the contracts to Track Care.

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings March 2024

Table 3.4.1.2.1: Summary of observations on contract award process for sampled contracts

S/N	Contracting Phase	Requirements	Number of non compliant contracts A	Value of non- compliant contracts (₦)	Non-compliance rate (%) A/11
1	Solicitation	Governor’s approval	9	61,765,001,732.61	82%
2		Record of advertisement / Invitation to bid	4	9,875,548,435.24	36%
3		Record of In-house estimate	1	276,622,210.00	9%
4		Contractors bid documents	9	13,291,649,990.85	82%
5		Record of bid opening	11	63,565,584,712.61	100%
6	Evaluation	Ministry’s evaluation report	7	14,389,481,717.81	64%
7	Evaluation	MTB memo on recommended contractor	7	7,783,582,793.83	64%
8	Approval & Award	F&GPC memo on selected contractor	10	61,853,976,620.85	91%
9		Exco conclusion	11	63,565,584,712.61	100%
10		Record of “No Objection” from BPP	11	63,565,584,712.61	100%
11		Award letter	5	51,743,001,253.02	45%
12		Acceptance of award letter	4	5,655,642,093.22	36%
13		Record of signed contract agreement	0	–	0%
14		Record of vetting by the MOJ	3	50,231,065,930.00	27%
15	Closure	Final Completion Certificate / Goods Received Note	2	671,522,210.06	18%
Average non-compliance rate					58%

Source: Compiled by KPMG from Contracts files provided by ABSG.

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings March 2024

3.4.1.2.2 Direct Labour – No record of Governor’s approval

a. As required by ABSG’s practice, there are no records indicating that the Governor approved the two (2) contracts amounting to ₦765,042,500.00 through Direct Labour.

3.4.2 Tunnel End Investment Company Limited (Tunnel End)

3.4.2.1 Contractor’s Profile

Table 3.4.2.1-1: Profile of Tunnel End

Item	Details⁷³
Registered Address	No 14B, Osisioma Industrial Layout Osisioma, Aba, Abia
Company Type	Private Unlimited Company
Incorporation date	29 Jul 2008
Incorporation number	RC 763213
Place of Incorporation	Nigeria
Status with CAC	Inactive (See Appendix 10.5.8 for a screenshot of Tunnel End’s inactive status on CAC’s online portal)
Management	As reflected on NG-check, see details of the Directors below: a. Nwafor Enyinnaya Chima – Director b. Dr. Mrs Kelechi Enylnwafor – Director c. Dame Gladys Nnenwafor` – Director d. Chiekezie Enyinwafor – Director

⁷³Retrieved on 3 November 2023 from CAC – Nigerian Corporate Registry; TUNNEL END INVESTMENT CO. LTD Nigeria company profile – address, contacts, owners (ng check.com).

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings

March 2024

Item	Details⁷³
	e. Nwafor Chimaeze Dike – Director
PEP Status	a. Nwafor Enyinnaya Chima is the son of the former deputy Governor of Abia state (1992 -1993, 2003 – 2006) and Governorship Candidate of the Young Progressives Party (YPP) in the 2023 Abia Gubernatorial election.

ABSG awarded 11 contracts to Tunnel End, with a cumulative value of ₦25,702,628,441.82 for or nine (9) of the 11 contracts, during the period under review, while the information provided by ABSG is not sufficient for us to determine the contract value for two (2) contracts. See details in the table below.

Table 3.4.2.1-2: Summary of contracts awarded to Tunnel End

S/N	Contract	Contract Value (₦)	Sampled Amount Provided (₦)
1	Expansion/Reconstruction of Obikabia Road.	5,520,000,000.00	5,520,000,000.00
2	Construction of Umuene to Obikabia Roads.	4,647,434,398.82	–
3	Construction of Link Roads to Major Economic Zones of Abia State: a. Amaise-Umuobiakwa-Ohanze Road b. Owo-Ahiafor Agburike-Ohanze c. Umuaro-Umuanunu-Ekwereazu-Nto-Border Road d. Ovom/Umuogele Junction, Ukuenyi-Abala-Ika (Akwa-Ibom Border).	3,370,832,840.00	3,370,832,840.00
4	Construction of Link Roads to Major Economic Zones of Abia State: a. Eziama-Nvosi-Eketa Rd. 10.0km b. Mgbokonta-Amachi-Umunkpeyi 5.0km c. Umunkpeyi-Amaiyi-Okpokiri-Umuehim-Umuru Road 9.5km	3,249,572,590.00	3,249,572,590.00

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings

March 2024

S/N	Contract	Contract Value (₦)	Sampled Amount Provided (₦)
5	Reconstruction/Rehabilitation of Obohia Road, Aba, Abia South LGA, Abia State.	2,940,738,180.00
6	Construction of Umuchiala/Abayi –Ihie Road in Isiala Ngwa South LGA (14.5km).	2,573,537,048.00
7	Construction of Abayi-Ariaria-Umuojima-Umuakpara Road with a Spur to Umuidiagha.	2,207,697,414.00	2,207,697,414.00
8	Construction/Rehabilitation of Adaelu-Unity Garden Estate Road, Osisioma LGA.	314,062,428.00
9	Construction of BIR/Bureau of Public Procurement Building.	878,753,543.00
10	Construction of Umuene-Omoba Roads.	–
11	Construction of Asa Umunka – Ugwunagbo LGA Headquarters.	–
Total		25,702,628,441.82	14,348,102,844.00

Source: Compiled by KPMG from schedules of contract award provided by ABSG.

3.4.2.2 Selection and award of contracts to Tunnel End

3.4.2.2.1 Non-adherence to selection and award of contract

a. We reviewed the supporting documents provided for four (4) contracts totalling to ₦14,348,102,844.00, noting an average non-compliance rate of 57% as outlined, which indicates that the Ministry of Works did not adhere to the required contracting process, before awarding the contracts to Tunnel End in table 3.4.2.2.1 below.

Table 3.4.2.2.1: Summary of observations on contract award process for sampled contracts

S/N	Contracting Phase	Requirements	Number of non compliant contracts A	Value of non- compliant contracts (₦)	Non-compliance rate (%) A/4
1	Solicitation	Governor’s approval	1	5,520,000,000.00	25%
2	Solicitation	Record of advertisement / Invitation to bid	4	14,348,102,844.00	100%

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings

March 2024

S/N	Contracting Phase	Requirements	Number of non compliant contracts A	Value of non- compliant contracts (₦)	Non-compliance rate (%) A/4
3		Record of Inhouse estimate	1	3,370,832,840.00	25%
4		Contractors bid documents	1	5,520,000,000.00	25%
5		Record of bid opening	4	14,348,102,844.00	100%
6	Evaluation	Ministry’s evaluation report	4	14,348,102,844.00	100%
7	Evaluation	MTB memo on recommended contractor	2	8,890,832,840.00	50%
8	Approval & Award	F&GPC memo on selected contractor	2	6,620,405,430.00	50%
9		Exco conclusion	4	14,348,102,844.00	100%
10		Record of “No Objection” from BPP	4	14,348,102,844.00	100%
11		Award letter	1	3,370,832,840.00	25%
12		Acceptance of award letter	2	6,620,405,430.00	50%
13		Record of signed contract agreement	1	5,520,000,000.00	25%
14		Record of vetting by the MOJ	2	8,890,832,840.00	50%
15	Closure	Final Completion Certificate / Goods Received Note	1	5,520,000,000.00	25%
Average non-compliance rate					57%

Source: Compiled by KPMG from Contracts files provided by Ministry of Works.

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings March 2024

3.4.3 Ferotex Construction Company (Ferotex)

3.4.3.1 Contractor’s Profile

Table 3.4.3.1-1: Profile of Ferotex

Item	Details⁷⁴
Registered Address	Km 17 Port Harcourt/Aba Road, Portharcourt, Rivers
Company Type	Private Unlimited Company
Incorporation date	3 May 2006
Incorporation number	RC 652228
Place of Incorporation	Nigeria
Status with CAC	Inactive (See Appendix 10.5.9 for a screenshot of Ferotex’s inactive status on CAC’s online portal)
Management	As reflected on NG-check, see details of the Directors below: 1. Onuh Festus Oshaba – Director 2. Chidera Pascal Oshaba Onuh – Director 3. Chukwemeka Clinton Oshaba – Director 4. Nweke Ejikeme – Director

ABSG awarded 16 contracts to Ferotex, with a cumulative value of ₦20,090,274,810.75 for 13 of the 16 contracts, during the period under review, while the information provided by ABSG is not sufficient to determine the contract value for three (3) contracts. See details in the table below.

⁷⁴Retrieved on 3 November 2023 from CAC – Nigerian Corporate Registry, FEROTEX CONSTRUCTION COMPANY LIMITED Nigeria company profile – address, contacts, owners (ng-check.com).

Document: KPMG Confidential

Table 3.4.3.1-2: Summary of contracts awarded to Ferotex

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings March 2024

S/N	Contract	Contract Value (₦)	Sampled Amount Provided (₦)
1	Construction of Various Roads and Supervision of Execution of Existing Road Contracts in Abia State.	10,000,000,000.00	–
2	Reconstruction and Construction of Uratta-Umuezeke-Umuekechi-Ogwe Road, Aba North and Ukwa West LGAs.	2,916,138,452.50	2,916,138,452.50
3	Construction of Umuaro-Isikor-Umunkiri Owo-Ahiafor.	2,618,431,328.00	2,618,431,328.00
4	Reconstruction umuaro-Nenu Obot-Akara Road.	894,260,640.00	–
5	Channelization/Drainage and Rehabilitation of Aba-Owerri from Brass Junction to Railway Crossing, Aba.	796,828,911.50	796,828,911.50
6	Rehabilitation/Reconstruction of Opobo Junction – Ikot-Ekpene Road.	776,110,407.75	–
7	Construction of Obingwa-omumazor Abbatoir Road, Uratta.	622,438,200.00	–
8	Reconstruction/Rehabilitation of 3 No Roads in Umuahia: Afara, Umuobasi and Ezeogbulafor Streets.	458,719,490.00	–
9	Rehabilitation/Reconstruction of Umule Road, Aba.	398,023,440.00	–
10	Rehabilitation of Failed Sections of 9 No Roads in Aba Area.	315,615,441.00	–
11	Rehabilitation of Asa Road from Bata/Ikot Ekpene Junction to St. Michaels By Asa Road Aba.	120,981,000.00	–
12	Rehabilitation of Umuocham Road, Aba.	98,825,000.00	–
13	Amelloration of Bad Sections of Port Harcourt Aba Expressway from Boundary to Army Checkpoint/Barrack Asa.	73,902,500.00	–
14	Construction of Itungwa – Amairi – Omoba Road.	–	–
15	Construction of Ohuru Ndoki – Obohia Road.	–	–

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings

March 2024

S/N	Contract	Contract Value (₦)	Sampled Amount Provided (₦)
16	Rehabilitation of 25Nos roads by Seven contractors.	–	–
Total		20,090,274,810.75	6,331,398,692.00

Source: Compiled by KPMG from schedules of contracts award provided by ABSG.

3.4.3.2 Selection and award of contracts to Ferotex

3.4.3.2.1 Non-adherence to selection and award of contract

a. We reviewed the supporting documents provided for a sample of three (3) contracts totalling to ₦6,331,398,692.00, noting an average non compliance rate of 58% as outlined, which indicates that the Ministry of Works did not adhere to the required contracting process, before awarding the contracts to Ferotex in table 3.4.3.2.1 below.

Table 3.4.3.2.1: Summary of observations on contract award process for sampled contracts

S/N	Contracting Phase	Requirements	Number of non compliant contracts A	Value of non- compliant contracts (₦)	Non-compliance rate (%) A/3
1	Solicitation	Governor’s approval	1	796,828,911.50	33%
2		Record of advertisement / Invitation to bid	3	6,331,398,692.00	100%
3		Record of Inhouse estimate	–	–	0%
4		Contractors bid documents	1	2,916,138,452.50	33%
5		Record of bid opening	3	6,331,398,692.00	100%
6	Evaluation	Ministry’s evaluation report	2	3,712,967,364.00	67%
7	Evaluation	MTB memo on recommended contractor	2	3,712,967,364.00	67%
8		F&GPC memo on selected contractor	2	3,415,260,239.50	67%

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings

March 2024

S/N	Contracting Phase	Requirements	Number of non compliant contracts A	Value of non- compliant contracts (₦)	Non-compliance rate (%) A/3
9	Approval & Award	Exco conclusion	3	6,331,398,692.00	100%
10		Record of “No Objection” from BPP	3	6,331,398,692.00	100%
11		Award letter	1	2,618,431,328.00	33%
12		Acceptance of award letter	1	2,618,431,328.00	33%
13		Record of signed contract agreement	2	3,415,260,239.50	67%
14		Record of vetting by the MOJ	1	2,618,431,328.00	33%
15	Closure	Final Completion Certificate / Goods Received Note	1	796,828,911.50	33%
Average non-compliance rate					58%

Source: Compiled by KPMG from Contracts files provided by Ministry of Works.

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings March 2024

3.4.4 China Zhonghao Nigeria Limited (China Zhonghao)

3.4.4.1 Contractor’s Profile

Table 3.4.4.1-1: Profile of China Zhonghao

Item	Details⁷⁵
Registered Address	Plot No 7, Inuwa Abdulkadir road, Kaduna South, Kaduna
Company Type	Private Unlimited Company
Incorporation date	07 Feb 2002
Incorporation number	RC 441280
Place of Incorporation	Nigeria
Status with CAC	Active
Management	As reflected on NG-check, see details of the Directors below: 1. Beijing Zhonghao Globe Engineering Consltancy Service – Director 2. Zhonghao Overseas Construction Engineering Co.ltd – Director 3. Zhang Yingju – Director 4. M. Ali Abubakar – Director 5. Lanli Jia – Director

ABSG awarded four (4) contracts to China Zhonghao, with a cumulative value of ₦10,830,494,574.58 during the period under review. See details in the table below.

⁷⁵Retrieved on 3 November 2023 from CAC – Nigerian Corporate Registry, CHINA ZHONGHAO NIGERIA LIMITED Nigeria company profile – address, contacts, owners (ng check.com).

Document: KPMG Confidential

Table 3.4.4.1-2: Summary of contracts awarded to China Zhonghao

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings March 2024

S/N	Contract	Contract Value (₦)	Sampled Amount Provided (₦)
1	Construction of Osisioma Flyover Bridge in Aba.	4,755,156,538.44	4,755,156,538.44
2	Construction of Flyover concrete Bridge at Ariaria Junction, Enugu/PH Expressway, Aba.	4,197,715,223.00	–
3	Construction of Flyover Concrete Bridge at Ala Oji Junction, Enugu/PH Expressway, Aba.	4,197,715,223.00	–
4	Reconstruction/Construction of 3 No Roads in Aba (Udeagha, Spur from Umueze to UBA to Mall).	1,877,622,813.14	1,877,622,813.14
Total		10,830,494,574.58	6,632,779,351.58

Source: Compiled by KPMG from schedules of contracts award provided by ABSG.

3.4.4.2 Selection and award of contracts to China Zhonghao

3.4.4.2.1 Non-adherence to selection and award of contract

a. We reviewed the supporting documents provided for two (2) contracts totalling to ₦6,632,779,351.58, noting an average non-compliance rate of 67% as outlined, which indicates that the Ministry of Works did not adhere to the required contracting process, before awarding the contracts to China Zhonghao in table 3.4.4.2.1 overleaf.

Table 3.4.4.2.1: Summary of observations on contract award process for sampled contracts

S/N	Contracting Phase	Requirements	Number of non compliant contracts A	Value of non- compliant contracts (₦)	Non compliance rate (%) A/2
1	Solicitation	Governor’s approval	1	4,755,156,538.44	50%
2		Record of advertisement / Invitation to bid	2	6,632,779,351.58	100%
3		Record of Inhouse estimate	–	–	0%

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings

March 2024

S/N	Contracting Phase	Requirements	Number of non compliant contracts A	Value of non- compliant contracts (₦)	Non compliance rate (%) A/2
4		Contractors bid documents	1	4,755,156,538.44	50%
5		Record of bid opening	2	6,632,779,351.58	100%
6	Evaluation	Ministry’s evaluation report	2	6,632,779,351.58	100%
7	Evaluation	MTB memo on recommended contractor	2	6,632,779,351.58	100%
8	Approval & Award	F&GPC memo on selected contractor	2	6,632,779,351.58	100%
9		Exco conclusion	2	6,632,779,351.58	100%
10		Record of “No Objection” from BPP	2	6,632,779,351.58	100%
11		Award letter	1	4,755,156,538.44	50%
12		Acceptance of award letter	2	6,632,779,351.58	100%
13		Record of signed contract agreement	–	–	0%
14		Record of vetting by the MOJ	–	–	0%
15	Closure	Final Completion Certificate / Goods Received Note	1	4,755,156,538.44	50%
Average non-compliance rate					67%

Source: Compiled by KPMG from Contracts files provided by Ministry of Works.

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings March 2024

3.4.5 Hartland Nigeria Limited (Hartland)

3.4.5.1 Contractor’s Profile

Table 3.4.5.1-1: Profile of Hartland

Item	Details⁷⁶
Registered Address	No 100, Warrake Road, Auchi, Edo.
Company Type	Private Company Limited By Shares
Incorporation date	23 Oct 1995
Incorporation number	RC 280974
Place of Incorporation	Nigeria
Status with CAC	Active
Management	As reflected on NG-check, see details of the Directors below: 1. Abu Inu-umoru – Director 2. Thelma Inu-umoru – Director 3. Afizu Carlton Inu-umoru – Director 4. Shadi Kawerma – Director 5. Laurant Bancod – Director 6. Kadir & Co Oluwakemi – Secretary

ABSG awarded one (1) contract to Hartland, with a cumulative value of ₦9,882,752,246.40 during the period under review. See details in the table below.

⁷⁶Retrieved on 3 November 2023 from CAC – Nigerian Corporate Registry, HARTLAND NIGERIA LIMITED Nigeria company profile – address, contacts, owners (ng check.com).

Document: KPMG Confidential

Table 3.4.5.1-2: Summary of contracts awarded to Hartland

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings March 2024

S/N	Contract	Contract Value (₦)	Sampled Amount Provided (₦)
1	Reconstruction/Dualization of Port-Harcourt Road with Services Lane on both sides.	9,882,752,246.40	9,882,752,246.40
Total		9,882,752,246.40	9,882,752,246.40

Source: Compiled by KPMG from schedules of contract award provided by ABSG.

3.4.5.2 Selection and award of contracts to Hartland

3.4.5.2.1 Non-adherence to selection and award of contract

a. We reviewed the supporting documents provided for one (1) contract totalling to ₦9,882,752,246.40, noting an average non-compliance rate of 53% as outlined, which indicates that the Ministry of Works did not adhere to the required contracting process, before awarding the contracts to Hartland in table 3.4.5.2.1 below.

Table 3.4.5.2.1: Summary of observations on contract award process for sampled contracts

S/N	Contracting Phase	Requirements	Number of non compliant contracts A	Value of non- compliant contracts (₦)	Non-compliance rate (%) A/1
1	Solicitation	Governor’s approval	–	–	0%
2		Record of advertisement / Invitation to bid	1	9,882,752,246.40	100%
3		Record of Inhouse estimate	–	–	0%
4		Contractors bid documents	–	–	0%
5		Record of bid opening	1	9,882,752,246.40	100%
6	Evaluation	Ministry’s evaluation report	1	9,882,752,246.40	100%
7	Evaluation	MTB memo on recommended contractor	–	–	0%
8		F&GPC memo on selected contractor	1	9,882,752,246.40	100%

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings

March 2024

S/N	Contracting Phase	Requirements	Number of non compliant contracts A	Value of non- compliant contracts (₦)	Non-compliance rate (%) A/1
9	Approval & Award	Exco conclusion	1	9,882,752,246.40	100%
10		Record of “No Objection” from BPP	1	9,882,752,246.40	100%
11		Award letter	1	9,882,752,246.40	100%
12		Acceptance of award letter	1	9,882,752,246.40	100%
13		Record of signed contract agreement	–	–	0%
14		Record of vetting by the MOJ	–	–	0%
15	Closure	Final Completion Certificate / Goods Received Note	–	–	0%
Average non-compliance rate					53%

Source: Compiled by KPMG from Contracts files provided by Ministry of Works.

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings March 2024

3.4.6 Ekcleen Integrated Services Nigeria Limited (Ekcleen)

3.4.6.1 Contractor’s Profile

Table 3.4.6.1-1: Profile of Ekcleen

Item	Details⁷⁷
Registered Address	No 18B, Billy Avenue off Timothy lane rumuola, Port Harcourt, Rivers
Company Type	Private Company Limited By Shares
Incorporation date	6 Sep 2013
Incorporation number	RC 1140435
Place of Incorporation	Nigeria
Status with CAC	Inactive (See Appendix 10.5.10 for a screenshot of Ekcleen’s inactive status on CAC’s online portal)
Management	As reflected on NG-check, see details of the Directors below: 1. Onu Onyedikachi – Director 2. Onu Chijioke – Director 3. Enebeli Anwuli – Director 4. Uzoma Emeka Onuoha – Secretary

ABSG awarded ten (10) contracts to Ekcleen, with a cumulative value of ₦9,758,491,489.24 for eight (8) of the 10 contracts, during the period under review, while the information provided by ABSG is not sufficient for us to determine the contract value for two (2) contracts. See details in the table below.

⁷⁷Retrieved on 3 November 2023 from CAC – Nigerian Corporate Registry; EKCLEEN INTEGRATED SERVICES NIG LTD Nigeria company profile – address, contacts, owners (ng-check.com).

Document: KPMG Confidential

Table 3.4.6.1-2: Summary of contracts awarded to Ekcleen

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings March 2024

S/N	Contract	Contract Value (₦)	Sampled Amount Provided (₦)
1	Reconstruction of Link Roads in Aba: a. Sacred Heart-Chibuike-Uzonikpa-Omuma Link Road Off Faulks Road, Aba with Concrete Pavement; b. Ngozi Avenue-Nwokocha Link Road Off Faulks; c. Imo Avenue-Ogbiyi-Omuma Link Road.	3,760,765,027.00	3,760,765,027.00
2	Reconstruction of Omuma Road off Ama Ogbonna.	2,374,890,239.60	2,374,890,239.60
3	Reconstruction of 4No Roads in Aba: a. Mbieri Str. off Ngwa Road with Concrete Pavement b. Victoria Str. Off Ngwa Road with Rigid Pavement and Surfacing c. Okoro-Ibadan-Ohanku Link Roads with Rigid Pavement d. Onyebuchi-Ibere-Ohanku Link Road with Rigid Pavement.	898,036,422.00	898,036,422.00
4	Reconstruction of Link Roads in Aba: a. Orlu Str. Off Ngwa Road b. Arodizuogu Str. Off Ngwa Roads c. Ndiuche Str. Off Ngwa Road d. Akokwa Str. Off Ngwa Road.	864,499,899.64	–
5	Reconstruction of Linked Roads: Ibadan, Agharandu, Emejiaka and Onyebuchi Street in Aba.	617,892,368.00	–
6	Reconstruction of Osusu Road, Aba	588,820,000.00	–
7	Construction of Umuokpo-Owo Ahiafor Link Road in Obingwa LGA.	489,862,533.00	–
8	Reconstruction of Akalanna Street Off Okigwe Road, Aba	163,725,000.00	–
9	Maintenance/Rehabilitation of Ururuka Road.	–	–

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings

March 2024

S/N	Contract	Contract Value (₦)	Sampled Amount Provided (₦)
10	Rehabilitation of some sections of Ururuka road with Concrete Pavement.	–	–
Total		9,758,491,489.24	7,033,691,688.60

Source: Compiled by KPMG from schedules of contract award provided by ABSG.

3.4.6.2 Selection and award of contracts to Ekcleen

3.4.6.2.1 Non- adherence to selection and award of contract

a. We reviewed the supporting documents provided for three (3) contracts totalling to ₦7,033,691,688.60, noting an average non-compliance rate of 60% as outlined, which indicates that the Ministry of Works did not adhere to the required contracting process, before awarding the contracts to Ekcleen in table 3.4.6.2.1 below.

Table 3.4.6.2.1: Summary of observations on contract award process for sampled contracts

S/N	Contracting Phase	Requirements	Number of non compliant contracts A	Value of non- compliant contracts (₦)	Non-compliance rate (%) A/3
1	Solicitation	Governor’s approval	2	4,658,801,449.00	67%
2		Record of advertisement / Invitation to bid	3	7,033,691,688.60	100%
3		Record of Inhouse estimate	–	–	0%
4		Contractors bid documents	3	7,033,691,688.60	100%
5		Record of bid opening	3	7,033,691,688.60	100%
6	Evaluation	Ministry’s evaluation report	3	7,033,691,688.60	100%
7	Evaluation	MTB memo on recommended contractor	2	4,658,801,449.00	67%
8		F&GPC memo on selected contractor	2	3,272,926,661.60	67%

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings

March 2024

S/N	Contracting Phase	Requirements	Number of non compliant contracts A	Value of non- compliant contracts (₦)	Non-compliance rate (%) A/3
9	Approval & Award	Exco conclusion	3	7,033,691,688.60	100%
10		Record of “No Objection” from BPP	3	7,033,691,688.60	100%
11		Award letter	2	4,658,801,449.00	67%
12		Acceptance of award letter	1	3,760,765,027.00	33%
13		Record of signed contract agreement	–	–	0%
14		Record of vetting by the MOJ	–	–	0%
15	Closure	Final Completion Certificate / Goods Received Note	–	–	0%
Average non-compliance rate					60%

Source: Compiled by KPMG from Contracts files provided by Ministry of Works.

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings March 2024

3.4.7 Setraco Nigeria Limited (Setraco)

3.4.7.1 Contractor’s Profile

Table 3.4.7.1-1: Profile of Setraco

Item	Details⁷⁸
Registered Address	Plot 526 Shehu Yaradua Way, Abuja, FCT
Company Type	Private Unlimited Company
Incorporation date	22 Aug 1977
Incorporation number	RC 22039
Place of Incorporation	Nigeria
Status with CAC	Active
Management	As reflected on NG-check, see details of the Directors below: 1. Umoru Abu Inu – Director 2. Khalaf Said – Director 3. Khalaf Fayez – Director 4. Mastrocinque Michelangelo – Director 5. Umoru Afizu Inu – Director 6. Mouannes Ziad – Director 7. Libbos Ghassan – Director 8. Baron Camille – Director 9. Chaudhuri Ray – Director

⁷⁸Retrieved on 3 November 2023 from CAC – Nigerian Corporate Registry; SETRACO (NIGERIA) LIMITED Nigeria company profile – address, contacts, owners (ng check.com).

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings

March 2024

ABSG awarded one (1) contract to Setraco, with a cumulative value of ₦8,820,045,347.90 during the period under review. See details in the table below.

Table 3.4.7.1-2: Summary of contracts awarded to Setraco

S/N	Contract	Contract Value (₦)	Sampled Amount Provided (₦)
1	Rehabilitation/Expansion of Faulks Road and Rehabilitation/Expansion of Ifeobara Pond (Flood Control)	8,820,045,347.90	8,820,045,347.90
Total		8,820,045,347.90	8,820,045,347.90

Source: Compiled by KPMG from schedules of contract award provided by ABSG.

3.4.7.2 Selection and award of contracts to Setraco

3.4.7.2.1 Non-adherence to selection and award of contract

a. We reviewed the supporting documents provided for one (1) contract totalling to ₦8,820,045,347.90, noting an average non-compliance rate of 73% as outlined, which indicates that the Ministry of Works did not adhere to the required contracting process, before awarding the contracts to Setraco in table 3.4.7.2.1 below.

Table 3.4.7.2.1: Summary of observations on contract award process for sampled contracts

S/N	Contracting Phase	Requirements	Number of non compliant contracts A	Value of non- compliant contracts (₦)	Non-compliance rate (%) A/1
1	Solicitation	Governor’s approval	–	–	0%
2		Record of advertisement / Invitation to bid	1	8,820,045,347.90	100%
3		Record of Inhouse estimate	0	–	0%

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings

March 2024

S/N	Contracting Phase	Requirements	Number of non compliant contracts A	Value of non- compliant contracts (₦)	Non-compliance rate (%) A/1
4		Contractors bid documents	1	8,820,045,347.90	100%
5		Record of bid opening	1	8,820,045,347.90	100%
6	Evaluation	Ministry’s evaluation report	1	8,820,045,347.90	100%
7	Evaluation	MTB memo on recommended contractor	1	8,820,045,347.90	100%
8	Approval & Award	F&GPC memo on selected contractor	1	8,820,045,347.90	100%
9		Exco conclusion	1	8,820,045,347.90	100%
10		Record of “No Objection” from BPP	1	8,820,045,347.90	100%
11		Award letter	1	8,820,045,347.90	100%
12		Acceptance of award letter	–	–	0%
13		Record of signed contract agreement	1	8,820,045,347.90	100%
14		Record of vetting by the MOJ	1	8,820,045,347.90	100%
15	Closure	Final Completion Certificate / Goods Received Note	–	–	0%

Document: KPMG Confidential

Abia State Government

Provision of Forensic Audit Services

Project Azumini – Final Report of Factual Findings

March 2024

S/N	Contracting Phase	Requirements	Number of non compliant contracts A	Value of non- compliant contracts (₦)	Non-compliance rate (%) A/1
Average non-compliance rate					73%

Source: Compiled by KPMG from Contracts files provided by Ministry of Works.

3.4.8 Rock-Waters Integrated Services Nigeria Limited (Rock-Waters)

3.4.8.1 Contractor’s Profile

Table 3.4.8.1-1: Profile of Rock-Waters

Item	Details⁷⁹
Registered Address	22, Vattern crescent off Amazon Street, Maitama, Abuja, FCT
Company Type	Private Company Limited By Shares
Incorporation date	12 Oct 2012
Incorporation number	RC 1071414
Place of Incorporation	Nigeria
Status with CAC	Inactive (See Appendix 10.5.11 for a screenshot of Rock waters inactive status on CAC’s online portal)
Management	As reflected on NG-check, see details of the Directors below: 1. Enyi-nwafor Kelechi Amarachi – Director

⁷⁹Retrieved on 3 November 2023 from CAC – Nigerian Corporate Registry; ROCK-WATERS INTEGRATED SERVICES NIG LTD Nigeria company profile – address, contacts, owners (ng-check.com).

Document: KPMG Confidential

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