The Federal Government has barred Ministries, Departments, and Agencies from awarding contracts or entering into financial commitments without first securing required budgetary approval and cash backing, in a move aimed at tightening fiscal discipline and enforcing compliance with procurement laws.
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, following observed violations of the Public Procurement Act, 2007, and other financial regulations governing public expenditure.
Under the new operational guidelines for the implementation of the 2026 capital budget, no MDA can issue letters of award, sign contracts, or incur financial obligations without first obtaining a Warrant or Authority to Incur Expenditure released by the Minister of Finance and Coordinating Minister of the Economy to the Accountant-General.
The circular 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.â€
To enforce compliance, the Office of the Accountant-General directed MDAs to attach copies of Warrants or AIEs generated through the Government Integrated Financial Management Information System as evidence of available funding before contracts are awarded or payments are processed.
The circular further instructed that purchase invoices, employee payables, and other financial commitments must be strictly limited to uncommitted warrant balances, warning that commitments must at no time exceed available funds.
In a related directive, the Bureau of Public Procurement was instructed to process only requests for “No Objection†certificates that are supported by valid Warrants or AIEs, while accounting officers were reminded that awarding contracts without adequate funding constitutes an offence under the ICPC Act 2000.
To improve budget execution, the government directed all MDAs to submit annual and quarterly cash plans for their capital budgets to the Office of the Accountant-General, with the initial cash plan deadline set for July 31, 2026, and subsequent quarterly plans due by the 15th day of the first month of each new quarter.
The latest measure reinforces the revised cash management policy introduced by the administration to enhance budget implementation, curb the accumulation of unpaid contractual liabilities, and reduce the prevalence of abandoned projects across the country.
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