Tinubu Approves EFCC Monitoring of FAAC Funds Allocated to States and Local Governments

President Bola Tinubu has approved the involvement of the Economic and Financial Crimes Commission (EFCC) in monitoring how funds allocated to Nigeria's 36 states and 774 local government areas from the Federation Account are disbursed and used. The initiative is aimed at strengthening accountability, promoting transparency and ensuring that public funds are used for the benefit of citizens.

Under the proposed arrangement, the EFCC will scrutinise how state and local governments spend their monthly allocations from the Federation Account Allocation Committee (FAAC), which have risen following the removal of petrol subsidy and foreign exchange reforms. The move comes amid growing concern over whether the higher federal allocations are translating into better infrastructure, public services and living conditions.

The monitoring framework is expected to focus on detecting alleged diversion of public funds, questionable contract awards, ghost workers and other financial irregularities in the management of government revenue. According to the document announcing the initiative, the EFCC will work with relevant federal institutions, including the Office of the Accountant-General of the Federation, the Federal Ministry of Finance, the Central Bank of Nigeria (CBN) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC).

The proposed measures include tracking allocations from the point of release to their final destinations, verifying projects reportedly funded with public money, investigating citizens' complaints of financial misconduct and publishing periodic compliance reports. The document, however, did not give details of the operational framework, the legal provisions governing the exercise or the implementation timetable.

The development comes as state and local governments receive substantial monthly allocations, raising expectations of visible development. Yet many communities still struggle with poor roads, inadequate healthcare facilities, unpaid salaries and pensions, and limited access to essential services. This gap has fuelled calls for stricter financial controls and greater transparency at the subnational level.

"FAAC money is not free money. It is money for the people, and it must work for the people," the statement declared. It said the objective is to ensure that allocations meant for development are not diverted or mismanaged.

Tinubu's administration has also backed greater financial autonomy for local governments following the Supreme Court's landmark judgment of July 2024, which affirmed that councils are constitutionally entitled to receive their allocations directly from the Federation Account. The judgment was meant to reduce state governments' control over local government finances and strengthen councils' capacity to deliver services at the grassroots. However, the effectiveness of direct allocations depends largely on transparent financial administration, functional local government institutions and mechanisms to ensure funds are spent on approved projects.

The proposed EFCC arrangement is therefore expected to extend accountability beyond disbursement to how the money is used after it reaches state and local government accounts. The commission is reportedly expected to carry out the task professionally and without political considerations, and officials suspected of misappropriating funds could be investigated and prosecuted under existing laws. "No one will be spared, irrespective of party affiliation," the statement added.

The framework is also expected to give citizens a channel to report suspected diversion and misuse of allocations, although details of the complaint mechanism and investigation procedures have yet to be made public. The Presidency is expected to provide further clarification on the legal framework, implementation arrangements and the responsibilities of the participating agencies.