FG Stops Ministries From Awarding Unfunded Contracts

The Federal Government has introduced a new directive stopping Ministries, Departments and Agencies from awarding contracts or taking on financial obligations without first receiving budget approval and confirmed cash backing. The move is part of efforts to strengthen financial control, improve compliance with public spending rules and reduce the growing problem of abandoned projects across the country.

The directive was contained in a Federal Treasury Circular dated July 31, 2026, and signed by the Accountant-General of the Federation, Dr Shamseldeen Ogunjimi. It was sent to ministers, permanent secretaries, heads of extra-ministerial departments and agencies, accounting officers and federal pay officers for immediate action.

According to the circular, the new measures became necessary after authorities noticed repeated violations of the Public Procurement Act 2007 and other financial regulations guiding government spending. The government said stricter steps were needed to improve the implementation of its revised cash management policy and ensure that public funds are managed properly.

Under the new arrangement, no ministry, department or agency is allowed to issue contract awards, sign agreements or take on any financial responsibility unless it has first received a Warrant or Authority to Incur Expenditure. This approval must cover either the full contract amount or the committed portion before any financial commitment is made.

The Office of the Accountant-General also directed all MDAs to attach copies of Warrants or AIEs generated through the Government Integrated Financial Management Information System as proof that funds are available before contracts are awarded or payments are processed.

The circular further stated that all financial commitments, including purchase invoices and employee-related payments, must remain within the available warrant balance. Agencies have been warned not to approve spending beyond the funds already released for their use.

The Bureau of Public Procurement was also directed to process requests for No Objection certificates only when they are backed by valid Warrants or AIEs. This means procurement approvals will no longer move forward without evidence that funds have already been provided.

Accounting officers were reminded that awarding contracts without budget provision, official approval and cash backing is an offence under the Independent Corrupt Practices and Other Related Offences Commission Act 2000. The government expects all officials responsible for public spending to fully comply with the new requirements.

To improve the implementation of the capital budget, the government instructed all MDAs to submit annual and quarterly cash plans to the Office of the Accountant-General. The annual cash plans, together with the first quarterly plans, were expected to be submitted by July 31, 2026, while future quarterly plans must reach the office on or before the 15th day of the first month of every new quarter.

The directive also requires ministries and agencies to arrange their projects and programmes in line with the Federal Government’s priorities. The Cash Management Technical Committee will continue to examine budget implementation plans and advise the Federal Cash Management Committee on projects that should receive attention. At the same time, accounting officers and directors of finance have been given the responsibility of ensuring proper cash management within their institutions.

The Office of the Accountant-General called on accounting officers, chief executives, directors of finance, internal auditors and other relevant officials to ensure full compliance with the circular.

The latest directive builds on the revised cash management policy introduced in 2024 to improve budget implementation and stop the practice of awarding contracts without available funding. The Tinubu administration has continued to pursue tighter control of public spending as part of its economic reform programme. The government also expects the new measures to reduce abandoned projects, limit unpaid contractual obligations and ensure that capital projects begin only when enough funds have been provided.