The Federal Government has directed all Ministries, Departments and Agencies (MDAs) not to award contracts or enter into any financial commitments without first obtaining budget approval and cash backing.
The directive was issued by the Accountant-General of the Federation, Dr. Shamseldeen Ogunjimi, in a Federal Treasury Circular dated July 31, 2026. It was sent to ministers, permanent secretaries, heads of extra-ministerial departments and agencies, accounting officers, and federal pay officers.
According to the government, the new guidelines were introduced to strengthen financial discipline and ensure compliance with the Public Procurement Act, 2007, and other financial regulations after several cases of non-compliance were reported.
The circular stated, “Further to the Treasury Circular… captioned ‘Revised Policy on Cash Management and Bottom-Up Cash Plan Operational Guidelines,’ it has become necessary to strengthen and deepen the implementation of the policy sequel to the observed non-compliance with the Public Procurement Act, 2007, and other extant laws and regulations.”
It added that the new measures are meant to ensure proper implementation of the 2026 capital budget.
The government directed that no MDA should award contracts or take on any financial obligation without first receiving a Warrant or Authority to Incur Expenditure (AIE).
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.”
The Office of the Accountant-General also instructed MDAs to attach copies of Warrants or AIEs generated through the Government Integrated Financial Management Information System (GIFMIS) as proof that funds are available before contracts are awarded or payments are made.
The circular further directed that financial commitments, including purchase invoices and employee-related payments, must not exceed the available warrant balance.
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.”
The Bureau of Public Procurement (BPP) was also directed to process only applications for “No Objection” certificates that are supported by valid Warrants or AIEs.
The Accountant-General reminded accounting officers that awarding contracts without budget approval and available funds is an offence under the law.
The circular stated, “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.”
To improve budget implementation, the Federal Government also directed all MDAs to submit annual and quarterly cash plans for their capital budgets to the Office of the Accountant-General.
According to the circular, annual cash plans starting from July 15, 2026, together with the first quarterly cash plan, were to be submitted by July 31, while future quarterly cash plans must be submitted by the 15th day of the first month of each new quarter.
The government also instructed MDAs to prioritise projects that align with national policy 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 directors of finance will be responsible for ensuring prudent cash management in their institutions.
The circular urged all accounting officers, chief executives, directors of finance, internal auditors, and other relevant officials to strictly comply with the new guidelines.
