Federal Account Allocation Committee (FAAC)
All tiers of Government depend on revenue from the federation account to finance development projects and Section 165 of the Constitution of the Federal Republic of Nigeria 1999 as well as the Allocation of Revenue (Federation Account, etc.) Act No.1 1982, stipulates that the revenues generated by the Federal government should be credited into the Federation Account and disbursed monthly among the three tiers of government as defined in the Revenue Act 1982.
This led to the constitution of the Federal Account Allocation Committee (FAAC), with the mandate and onus to ensure that the indices are scrutinized monthly by representatives from States both at the Commission (Commissioners, appointed by the Governors) and at the OAGF (through the FAAC committee which includes the Accountant Generals from all the States) who rely heavily on allocations. This happens at its secretariat at the Federal Ministry of Budget and National Planning in the nation's Capital, FCT-Abuja.
FAAC Services
FAAC performs three major activities which can be categorized into the following services:
REVIEW AND ADOPTION
Federal Account Allocation Committee (FAAC) is responsible for reviewing and adopting the allocation of funds to States of the Federal government of Nigeria.
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DEDUCTION MANAGEMENT
Deductions are supervised by the Federal Accounts Allocation Committee in order to efficiently carry out the accurate disbursement of funds to the States.
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The Federal Account Allocation Committee FAAC issues a mandate letter to the CBN, to facilitate the disbursement of funds to individual States and the FCT.
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The Federation Account Allocation Committee (FAAC or the “Committee”) disburses allocations from the revenues generated into the Federations Accounts, which comprise multiple accounts specific to an RGA or a sector/ business type.
The 2 major Roles of FAAC are:
- To ensure that allocations made to the States from the Federation Account are promptly and fully paid into the treasury of each State on the basis and terms prescribed by the Allocation of Revenue act;
- To report annually to the National Assembly in respect of the function specified in the above paragraph
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