To tighten fiscal discipline and enforce compliance with procurement laws, the Federal Government has banned Ministries, Departments and Agencies (MDAs) from awarding contracts or making any financial commitments without first securing the necessary budget approval and cash backing.
The decision was stated in Federal Treasury Circular of July 31, 2026, signed by Accountant-General of the Federation, Dr Shamseldeen Ogunjimi.
Our correspondent acquired the circular on Sunday and it was written to critical government functionaries such ministers, permanent secretaries, chiefs of extra ministerial departments and agencies, accounting officers and federal pay officers.
The Accountant-General said there was the need for new operational rules due to numerous breaches of the Public Procurement Act, 2007 and other financial regulations governing public spending.
“Following the observed non-compliance with the Public Procurement Act, 2007 and other extant laws and regulations, it has become necessary to strengthen and deepen the implementation of the policy,” read the circular. “Further to the Treasury Circular… titled ‘Revised Policy on Cash Management and Bottom-Up Cash Plan Operational Guidelines,”
“For full compliance and smooth implementation of the policy, the following operational guidelines for the implementation of the 2026 capital budgets are hereby issued,” it added.
One of the fundamental provisions of the circular is that no MDA shall issue letters of award, execute contracts or incur financial commitments without first obtaining a Warrant or Authority to Incur Expenditure.
It said that “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 and undertake any financial obligation unless the appropriate 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.”
The Office of the Accountant-General also asked MDAs to download and attach copies of Warrants or AIEs generated by the Government Integrated Financial Management Information System (GIFMIS) as evidence of availability of funds before award of contracts or processing of payments.
The circular further cautioned that financial commitments such as purchase bills and employee payables should not exceed the value of available warrants.
It said: “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.
Another instruction further directed the Bureau of Public Procurement to only process requests for “No Objection” certificates accompanied by valid Warrants or AIEs.
The Accountant-General also reminded accounting officers that awarding contracts without proper funds is a violation under anti-corruption rules. Circular said Accounting Officers are reminded that it is an offence under the ICPC Act 2000 to grant or execute any contract without budgetary provision, permission and cash backing.
To improve budget execution, government instructed all MDAs to submit yearly cash plans and quarterly cash plans for their capital budgets to the Office of the Accountant-General.
As to the circular, yearly cash plans starting from July 15, 2026 along with the first quarterly cash plan should be filed on or before July 31, 2026 and following quarterly cash plans should be submitted on or before the 15th day of the first month of each new quarter.
It also directed the MDAs to give priority to initiatives and programmes that were in line with the policy objectives of the Federal Government.
The circular said that the Cash Management Technical Committee will continue to review budget implementation plans and advise the Federal Cash Management Committee on priority projects while accounting officers and directors of finance will be responsible for prudent cash management in their respective institutions.
It called on all accounting officers, chief executives, directors of finance, internal auditors and other concerned officials to give the circular “the widest circulation and compliance.”
The current regulation is a reinforcement of the Federal Government’s updated financial management strategy launched in 2024 to improve budget implementation and prevent the award of contracts where financing is not available.
The Tinubu administration has also put a premium on fiscal discipline, transparency and value for money in public expenditure in its economic reform program.
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