By Opeyemi Adelakun
The Federal Government has prohibited Ministries, Departments and Agencies (MDAs) from awarding contracts or entering into financial commitments without prior budgetary approval and confirmed cash backing, as part of efforts to strengthen fiscal discipline and curb abandoned projects.
The directive is contained in a Federal Treasury Circular dated July 31, 2026, signed by the Accountant-General of the Federation, Dr Shamseldeen Ogunjimi, and addressed to ministers, permanent secretaries, heads of extra-ministerial departments and agencies, accounting officers and federal pay officers.
The new guidelines were issued following what the Office of the Accountant-General described as persistent violations of the Public Procurement Act, 2007, and other financial regulations governing public expenditure.
According to the circular, no MDA is permitted to issue letters of award, sign contracts or incur financial obligations without first obtaining a Warrant or Authority to Incur Expenditure (AIE) covering the full value or committed portion of the contract.
It stated: “No expenditure shall be incurred except on the authority of a Warrant/AIE (including employee payables). Accordingly, no MDA shall issue letters of award, sign contracts, or enter into any financial obligations unless the corresponding Warrant/AIE covering the full or committed portion of the contract sum has been duly released by the Honourable Minister of Finance and Coordinating Minister of the Economy to the Accountant-General of the Federation.”
To ensure compliance, the government directed MDAs to attach copies of Warrants or AIEs generated through the Government Integrated Financial Management Information System (GIFMIS) before contracts are awarded or payments processed.
The circular also warned that financial commitments, including purchase invoices and employee-related liabilities, must not exceed available warrant balances.
It stated: “All MDAs shall ensure that financial commitments (purchase invoices and employee payables) are limited to uncommitted warrant balances; and at no time should financial commitments exceed the amount of Warrants/AIEs available.”
In a related directive, the Bureau of Public Procurement (BPP) was instructed to process only requests for No Objection Certificates supported by valid Warrants or AIEs.
The Accountant-General further reminded accounting officers that awarding contracts without adequate funding amounts to a violation of anti-corruption laws.
“Accounting Officers are invited to note that it is an offence under the ICPC Act 2000 to award or sign any contract without budgetary provision, approval and cash backing,” the circular stated.
To improve budget implementation, all MDAs were directed to submit annual and quarterly cash plans for capital projects to the Office of the Accountant-General. The annual cash plan and first-quarter submission were due by July 31, 2026, while subsequent quarterly plans must be submitted on or before the 15th day of the first month of each quarter.
The circular also directed agencies to prioritise projects in line with government policy objectives, while the Cash Management Technical Committee will continue reviewing implementation plans and advising the Federal Cash Management Committee on priority projects.
The latest directive reinforces the Federal Government’s cash management reforms aimed at improving budget implementation, preventing unfunded contract awards, reducing abandoned projects and ensuring that public projects commence only when funding has been secured.
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