The Federal Government has directed Ministries, Departments and Agencies (MDAs) to stop awarding contracts or entering into financial commitments without obtaining the required budgetary approval and cash backing.
The directive, contained in a Federal Treasury Circular dated 31 July 2026 and signed by the Accountant-General of the Federation, Dr Shamseldeen Ogunjimi, is aimed at strengthening fiscal discipline and ensuring compliance with public procurement regulations.
The circular, which was addressed to ministers, permanent secretaries, heads of extra-ministerial departments and agencies, accounting officers and federal pay officers, followed concerns over breaches of the Public Procurement Act, 2007, and other financial regulations guiding public expenditure.
According to the Accountant-General, the new operational guidelines were issued to ensure effective implementation of the government’s revised cash management policy and prevent unfunded financial commitments.
The circular stated that no MDA should issue letters of award, sign contracts or incur financial obligations without a valid Warrant or Authority to Incur Expenditure (AIE) covering the full or committed portion of the contract value.
“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 by the Honourable Minister of Finance and Coordinating Minister of the Economy to the Accountant-General of the Federation,” it stated.
The Office of the Accountant-General also directed MDAs to download and attach copies of Warrants or AIEs generated through the Government Integrated Financial Management Information System (GIFMIS) as evidence of available funding before awarding contracts or processing payments.
The circular warned that financial commitments, including purchase invoices and employee-related obligations, must not exceed available warrant balances.
“All MDAs shall ensure that financial commitments are limited to uncommitted warrant balances, and at no time should financial commitments exceed the amount of Warrants/AIEs available,” it stated.
The Bureau of Public Procurement (BPP) was also instructed to process requests for “No Objection” certificates only when supported by valid Warrants or AIEs.
The Accountant-General further reminded accounting officers that awarding contracts without adequate budgetary provision, approval and cash backing constitutes an offence under 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 execution, the government directed all MDAs to submit annual and quarterly cash plans for capital projects to the Office of the Accountant-General.
The circular stipulated that annual cash plans and the first quarterly cash plans for 2026 were to be submitted on or before 31 July 2026, while subsequent quarterly plans must be submitted by the 15th day of the first month of each quarter.
It also directed MDAs to prioritise projects and programmes in line with Federal Government policy objectives.
The Cash Management Technical Committee will continue to review budget implementation plans and advise the Federal Cash Management Committee on priority projects, while accounting officers and finance directors will be responsible for ensuring prudent cash management within their institutions.
The directive is an extension of the Federal Government’s revised cash management policy introduced to improve budget implementation, prevent the accumulation of unpaid contractual obligations and reduce the number of abandoned projects.
The administration of President Bola Tinubu has repeatedly emphasised fiscal discipline, transparency and value for money in public spending as key components of its economic reform agenda.
