The Federal Government has introduced stricter financial controls by directing all Ministries, Departments and Agencies (MDAs) to stop awarding contracts or entering into financial commitments without first obtaining budgetary approval and confirmed cash backing.
The new directive, issued through a Federal Treasury Circular dated July 31, 2026, was signed by the Accountant-General of the Federation, Dr. Shamseldeen Ogunjimi, as part of efforts to strengthen fiscal discipline, improve budget implementation, and eliminate the growing problem of abandoned government projects.
The circular, addressed to ministers, permanent secretaries, heads of extra-ministerial departments, accounting officers and federal pay officers, cited widespread violations of the Public Procurement Act 2007 and existing financial regulations as the reason for the tougher measures.
No Contract Without Budget Approval
Under the new guidelines, MDAs are prohibited from issuing contract award letters, signing agreements or making any financial commitments unless they have received a Warrant or Authority to Incur Expenditure (AIE) from the Minister of Finance and Coordinating Minister of the Economy through the Office of the Accountant-General.
The circular stated that:
No expenditure shall be incurred except on the authority of a Warrant/AIE. 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.
The government also directed MDAs to attach copies of Warrants or AIEs generated through the Government Integrated Financial Management Information System (GIFMIS) as evidence that funds are available before contracts are awarded or payments processed.
Spending Must Match Available Funds
The accountant-General warned that financial commitments, including purchase invoices and employee-related obligations, must never exceed available warrant balances.
According to the circular, MDAs must ensure that all commitments remain within approved funding limits to prevent the accumulation of unpaid liabilities that have contributed to numerous abandoned projects across the country.
BPP to Reject Unfunded Procurement Requests
The Bureau of Public Procurement (BPP) has also been directed to process only applications for “No Objection” Certificates that are backed by valid Warrants or AIEs.
This means procurement requests without evidence of available funding will no longer receive approval.
Warning Against Illegal Contract Awards
The Federal Government reminded accounting officers that awarding contracts without budgetary provision and cash backing is an offence under the Independent Corrupt Practices and Other Related Offences Commission (ICPC) Act 2000.
The circular stressed that public officials could face sanctions for approving contracts without adequate funding.
Quarterly Cash Plans Now Mandatory
To improve budget execution and cash management, all MDAs have been directed to submit annual and quarterly cash plans for their capital projects.
The guidelines require:
Annual cash plans and the first quarterly cash plan to be submitted by July 31, 2026.
Subsequent quarterly cash plans to be submitted on or before the 15th day of the first month of every new quarter.
Priority to be given to projects that align with the Federal Government’s development objectives.
The Cash Management Technical Committee will continue reviewing implementation plans and advising the Federal Cash Management Committee on priority projects, while accounting officers and finance directors will be responsible for ensuring prudent financial management within their institutions.
Tackling Abandoned Projects
Federal Government Bars MDAs from Awarding Unfunded Contracts to Reduce Abandoned Projects
The Federal Government has introduced stricter financial controls by directing all Ministries, Departments and Agencies (MDAs) to stop awarding contracts or entering into financial commitments without first obtaining budgetary approval and confirmed cash backing.
The new directive, issued through a Federal Treasury Circular dated July 31, 2026, was signed by the accountant-General of the Federation, Dr. Shamseldeen Ogunjimi, as part of efforts to strengthen fiscal discipline, improve budget implementation, and eliminate the growing problem of abandoned government projects.
The circular, addressed to ministers, permanent secretaries, heads of extra-ministerial departments, accounting officers and federal pay officers, cited widespread violations of the Public Procurement Act 2007 and existing financial regulations as the reason for the tougher measures.
No Contract Without Budget Approval
Under the new guidelines, MDAs are prohibited from issuing contract award letters, signing agreements or making any financial commitments unless they have received a Warrant or Authority to Incur Expenditure (AIE) from the Minister of Finance and Coordinating Minister of the Economy through the Office of the Accountant-General.
The circular stated that:
“No expenditure shall be incurred except on the authority of a Warrant/AIE. 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.”
The government also directed MDAs to attach copies of Warrants or AIEs generated through the Government Integrated Financial Management Information System (GIFMIS) as evidence that funds are available before contracts are awarded or payments processed.
Spending Must Match Available Funds
The Accountant-General warned that financial commitments, including purchase invoices and employee-related obligations, must never exceed available warrant balances.
According to the circular, MDAs must ensure that all commitments remain within approved funding limits to prevent the accumulation of unpaid liabilities that have contributed to numerous abandoned projects across the country.
BPP to Reject Unfunded Procurement Requests
The Bureau of Public Procurement (BPP) has also been directed to process only applications for “No Objection” Certificates that are backed by valid Warrants or AIEs.
This means procurement requests without evidence of available funding will no longer receive approval.
Warning Against Illegal Contract Awards
The Federal Government reminded accounting officers that awarding contracts without budgetary provision and cash backing is an offence under the Independent Corrupt Practices and Other Related Offences Commission (ICPC) Act 2000.
The circular stressed that public officials could face sanctions for approving contracts without adequate funding.
Quarterly Cash Plans Now Mandatory
To improve budget execution and cash management, all MDAs have been directed to submit annual and quarterly cash plans for their capital projects.
The guidelines require:
Annual cash plans and the first quarterly cash plan to be submitted by July 31, 2026.
Subsequent quarterly cash plans to be submitted on or before the 15th day of the first month of every new quarter.
Priority to be given to projects that align with the Federal Government’s development objectives.
The Cash Management Technical Committee will continue reviewing implementation plans and advising the Federal Cash Management Committee on priority projects, while accounting officers and finance directors will be responsible for ensuring prudent financial management within their institutions.
Tackling Abandoned Projects
The latest directive reinforces the Federal Government’s revised cash management policy introduced in 2024 to improve transparency and accountability in public spending.
By ensuring contracts are awarded only when funds are available, the Tinubu administration aims to:
Reduce abandoned government projects.
Eliminate unfunded contract awards.
Prevent the accumulation of unpaid contractual obligations.
Improve budget implementation.
Promote transparency and value for money in public expenditure.
The government believes the stricter enforcement of procurement and financial regulations will enhance fiscal discipline and ensure that public projects are completed on schedule with available resources.
The latest directive reinforces the Federal Government’s revised cash management policy introduced in 2024 to improve transparency and accountability in public spending.
By ensuring contracts are awarded only when funds are available, the Tinubu administration aims to:
Reduce abandoned government projects.
Eliminate unfunded contract awards.
Prevent the accumulation of unpaid contractual obligations.
Improve budget implementation.
Promote transparency and value for money in public expenditure.
The government believes the stricter enforcement of procurement and financial regulations will enhance fiscal discipline and ensure that public projects are completed on schedule with available resources.
