Senate summons Gimba Kumo, ex-MD of FMBN, over N3bn contract

The senate committee on public accounts has summoned Gimba Kumo, former managing director of the Federal Mortgage Bank of Nigeria (FMBN), to explain the alleged irregular award of N3 billion contract when he was still at the bank.

The committee issued the summons following a query raised in a report by the office of the auditor-general of the federation (AuGF) against the FMBN.

The 2015-2018 report by the AuGF is currently under scrutiny by the senate panel led by Mathew Urhoghide, senator representing Edo south.

According to the report, the contract was awarded in four phases and was overpaid to the tune of N3,045,391,531.97.

“Audit observed that a contract was awarded to a contractor in four phases at a total contract sum of N3,045,391,531.97,” the AuGF wrote in the query.

“Audit however observed that the second, third and fourth phases of the contract were above the approval thresholds of the bank.

“It was also observed from the examination of payment documents that the contractor was overpaid in the sum of N118,717,892.72 that resulted from irregular addition of five percent withholding tax in the bill of quantity on each of the four phases of the contract.

“Audit further observed, from physical inspection of the site that a provision of N 80, 000,000.00 was made and paid for the implementation of ‘Unified Access and Attendance System’ but the device was not working according to specifications.

“A sum of N644,040,000.00 was also provided in the bill of quantities for offshore training and other deliverables in the third and fourth phases of the contract, but there was no evidence of execution, in contravention of Financial Regulations 70.”

However, reacting to the query, Ahmed Dangiwa, current managing director of FMBN, said the contract was awarded by the previous management.

He added that his leadership had made effort to correct the anomalies in the contract.

“The contract was awarded by the previous management in 2011 to design, build and implement a Mortgage Banking Business Process Solution workflow and infrastructure with the aim of creating an enterprise software that will integrate all the bank’s processes,” Dangiwa said.

“This (current) management after an assessment of the performance of the contractor’s obligations on the contract expressed dissatisfaction with the service rendered by the contractor.

“The management, thereafter, severally engaged the contractor over all the issues surrounding the project which include amongst others, the issue of overpayment of the sum of N118m due to wrong addition of WHT to the contract award sum in all the four phases as well as other payments to the contractor.

“A settlement agreement was thereafter entered into by the FMBN and Messrs. Starter-Point Limited on the mode of repayment of all outstanding due to the bank.

“Payment of the contract sum for phases three and four were made to the contract by the previous management based on the milestone achievement as specified in the contract agreement.

“Each payment was duly certified by Messrs. Comsoft Limited, the in-house consultant appointed by the bank for the project.

“Based on the contract specifications, the phase three modules were duly completed and functional; however, off-shore training was not conducted for this phase.

“The settlement agreement between the bank and the vendor has also taken into consideration the payment made for the off-shore training that was not done by the vendor.

“No final payment was made by the bank on the phase four project”.

Not satisfied with the explanation, the senate committee chairman asked the former managing director of the bank to appear before the panel to offer more explanations on the contract.