The Federal Government has warned states and local governments against borrowing from financial institutions without a Certificate of Proof of Compliance from the Fiscal Responsibility Commission (FRC).

It said loans gotten without an FRC certificate are not only against the law but have serious legal implications.

The commission issued the warning during a financial management workshop attended by the 23 local government chairmen in Kaduna yesterday.

FRC’s Director of Legal Services, Investigation and Enforcement, Charles Abana, represented the Executive Chairman, Victor Muruako, at the event organised by the Kaduna State Fiscal Responsibility Commission.

The commission said states and local governments needed to understand that the Fiscal Responsibility Act of 2007 does not permit them to borrow for everyday running costs.

It stated that governments that intend to get loans must understand that they must use such loans for projects like infrastructure and human development that have long-term value.

The commission, in a statement by its Strategic Communication officer, Bede Anyanwu, also described the practice of spending public money without approval in the budget as “fiscal haram,” which damages public trust and slows down development.

“Every kobo spent must have value for money. Public resources must be planned, budgeted for, properly appropriated and disbursed towards the execution of projects that positively impact the lives of the people,” a part of the statement read.

The FRC cautioned local government leaders against giving out public funds to friends, supporters, party loyalists and adding names of people who are not properly employed to their payrolls.

According to the commission, all spending must follow what is approved in the budget and must be tied to real work and real benefits for the people.

It also warned financial institutions, especially banks, against granting loans outside the law. Public officers who ignore the law, said the commission, risk serious sanctions.

The federal agency admonished council chairmen to run open and transparent administrations, manage funds carefully, and think about how their decisions today could affect future generations.

The commission said it was ready to offer technical support to help local governments put proper fiscal responsibility laws in place for a strong and disciplined financial system.

Governor Uba Sani was praised in the statement for supporting reforms that promote transparency and accountability.

Sani condemned the misuse and theft of public funds and called on all elected officials and political appointees to act with honesty and openness in carrying out their duties.

He said his administration remains committed to reforms, financial discipline, and responsible leadership, adding that people’s trust can only be earned when public money is managed properly and used for their benefit.

Earlier, Executive Chairman of the state fiscal responsibility commission, Sani Bako, described the workshop as an important step towards improving how public funds are managed at the local level.

Bako welcomed the support of agencies such as the Code of Conduct Bureau, the Economic and Financial Crimes Commission, the Bureau of Public Procurement, and the Centre for Fiscal Transparency and Public Integrity.

He added that strong public financial management is key to lasting development, leading to better roads, cleaner communities, improved schools, and overall economic growth.

He noted that other agencies at the workshop presented papers on ethical leadership, proper procurement, and fighting corruption, all geared towards ensuring that public funds are used wisely at every level of government. (The Nation)

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