How Govt Really Works: The Difference Between Executive Council Approval and the Release of Public Funds

By Hon. Muhammad Sanusi S. Kiru, FCIA

“An informed opposition is indispensable to democracy. However, effective accountability begins with understanding how the government works, not with assuming how it works.”

Public accountability is one of the defining pillars of every democratic society. Citizens have a constitutional right to question government decisions, demand transparency and hold public office holders accountable for the management of public resources. Likewise, the opposition plays an indispensable role in scrutinising government policies and offering alternative viewpoints. However, accountability can only achieve its true purpose when it is anchored on facts, evidence and a proper understanding of how government actually works.

When criticism is based on assumptions rather than established principles of public administration and public financial management, public debate is weakened, misinformation thrives and the ultimate casualty becomes the truth.

One of the greatest misconceptions in contemporary public discourse is the widespread belief that once the Executive Council approves a project, the entire amount approved has automatically been released to the implementing ministry or contractor. Consequently, whenever a project is not immediately visible on the ground, many people hastily conclude that the approved funds have been diverted or misappropriated. This assumption has increasingly dominated public discussions, yet it is fundamentally inconsistent with the legal and financial procedures governing public expenditure in Nigeria.

One of the reasons this article has become necessary is the growing number of public commentaries by some enlightened citizens who have painstakingly compiled lists of projects approved by the Executive Council, visited the proposed project locations and, upon discovering that some projects have not commenced, boldly concluded that the entire sums approved for those projects had been released and subsequently diverted or misappropriated.

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While such efforts may be motivated by a genuine desire to promote accountability, the conclusions reached often overlook one fundamental question: Was the money ever released by the Treasury? Until that question is answered with documentary evidence, it is impossible to conclude that public funds have been diverted.

This article therefore seeks to explain, in simple and practical terms, how government really works. It is neither an attempt to shield any administration from legitimate scrutiny nor an invitation to discourage constructive criticism. Rather, it is intended to deepen public understanding of the distinction between Executive Council approval, budgetary provision, release of funds, project implementation and project completion.

These are separate stages in the public expenditure process, and confusing one with another inevitably leads to inaccurate conclusions and unfair assessments of government performance.

The Executive Council is the highest policy-making organ of the Executive arm of government. Before any project reaches the Council, the relevant ministry, department or agency identifies a public need and prepares a comprehensive memorandum describing the proposed project, its location, technical specifications, scope of work, estimated cost, implementation period, procurement strategy and the budget head from which the expenditure is expected to be financed.

The memorandum undergoes technical, administrative and financial scrutiny before being presented to the Executive Council. Where the Council is satisfied that the proposal is necessary, lawful and consistent with Government’s priorities, it grants approval for the project.

However, Executive Council approval is only a policy decision. It is not the release of funds.

After Executive Council approval, the implementing ministry must still comply with procurement laws and financial regulations. Depending on the nature and value of the project, procurement processes are undertaken, contracts are prepared and executed, and the implementing ministry thereafter applies to the Ministry of Finance for the release of funds.

The Ministry of Finance does not automatically release the amount approved by the Executive Council. It first determines whether there is a valid budgetary provision, whether sufficient cash is available in the Treasury, whether the request falls within government priorities and whether all statutory conditions have been fulfilled.

If sufficient funds are available, the Ministry of Finance may grant cash backing or release funds, either in full or in phases. Where revenue falls below expectation or competing statutory obligations take precedence, the release may be delayed or reduced.

Only after funds have actually been released can mobilisation, where applicable, be paid to the contractor in accordance with the contract terms. As work progresses, engineers, architects, quantity surveyors and other supervising officers inspect and certify completed stages before interim payment certificates are processed.

Government therefore pays for work actually executed and certified—not merely because the Executive Council approved a project.

This clearly demonstrates why Executive Council approval should never be confused with financial disbursement. Between approval and expenditure lie several legal, administrative and financial stages deliberately designed to ensure transparency, accountability and prudent management of public resources.

Every citizen, journalist and opposition politician should therefore remember three fundamental principles of public financial management:

Executive Council Approval is not the Release of Funds.

Release of Funds is not Expenditure.

Expenditure is not Project Completion.

Another important reality often overlooked in public debate is that governments do not spend projected revenue; they spend actual revenue. Annual budgets are prepared using projected receipts from the Federation Account Allocation Committee (FAAC), Internally Generated Revenue, grants and other lawful sources.

However, actual monthly revenue frequently differs from projections because of fluctuations in national revenue, inflation, exchange rate movements and prevailing economic conditions. Consequently, even where projects have been approved, implementation depends entirely on actual cash available in the Treasury.

This is why responsible governments adopt cash-backed budgeting. Rather than committing resources they have not yet received, prudent administrations align expenditure with actual revenue.

This protects the Treasury from financial distress, prevents the accumulation of unpaid contractual obligations, reduces the incidence of abandoned projects and ensures that projects commenced are capable of completion.

Delaying the commencement of some approved projects because of temporary fiscal constraints is therefore not necessarily evidence of failure; it may well be evidence of sound financial management.

It is equally important to appreciate that government has numerous constitutional and statutory obligations that must be financed from the same Treasury expected to fund capital projects.

During the period under review, billions of naira were committed to clearing outstanding gratuities owed to retired civil servants, thereby reducing long-standing backlogs and restoring dignity to thousands of pensioners. Pension payments were reviewed upward and continued without interruption. Government also implemented the new national minimum wage of ₦70,000, significantly increasing the monthly wage bill.

In addition, more than 12,000 teachers were recruited to strengthen the education sector, while thousands of additional health workers were employed to improve healthcare delivery across the State.

These recruitments created permanent obligations in salaries, pension contributions, staff development and welfare that must be financed every month. Government also continued to fund education, healthcare, security, agriculture and other essential public services.

Every one of these commitments drew resources from the same Treasury expected to finance roads, schools, hospitals, water schemes and other capital projects.

It is important to remember that the retirees who received their gratuities and pensions, the civil servants who benefited from the implementation of the new minimum wage, the newly recruited teachers, the health workers employed by Government and the members of their families are all citizens of Kano State.

The resources committed to these obligations were not spent outside the State; they were invested directly in the welfare of Kano people. These payments enabled families to educate their children, access healthcare, improve housing, engage in agriculture, establish businesses and meet essential household needs.

The money circulated within local communities, stimulated commercial activities, supported thousands of livelihoods and strengthened the State’s economy. In that sense, these expenditures represent significant investments in the people of Kano State and should be recognised as an integral part of Government’s development agenda.

Development should therefore not be measured solely by the number of physical structures erected. Roads, bridges and public buildings are important, but they represent only one aspect of development.

Investment in people is equally important. A school without teachers cannot educate children. A hospital without doctors, nurses and other health professionals cannot provide quality healthcare.

Pensioners deserve the benefits they earned through decades of service, while workers deserve fair wages and decent conditions of service. These expenditures improve human capital, strengthen public institutions, stimulate economic activity and enhance the welfare of citizens.

In every practical sense, they are investments in development because they improve the lives of the people whom government exists to serve.

It is important to appreciate that allegations of diversion or misappropriation of public funds are serious allegations with significant legal and reputational consequences.

Before any responsible person concludes that public funds have been diverted, there should be credible documentary evidence showing that the funds were actually released from the Treasury, received by the implementing ministry, department, agency or contractor and subsequently applied for purposes other than those lawfully approved.

Without such evidence, the allegation remains speculative and incapable of distinguishing between a project awaiting funding, a project awaiting procurement, a project being implemented in phases or one genuinely affected by financial misconduct.

In a constitutional democracy, freedom of expression carries corresponding responsibilities. Citizens, public commentators and political actors have every right to demand accountability, but they also have a duty to ensure that allegations of financial impropriety are supported by verifiable facts.

Unsupported allegations that public funds have been diverted, without evidence that the funds were ever released, may expose those making such allegations to legal consequences under applicable laws where they unjustifiably damage the reputation of individuals or institutions.

Responsible public discourse therefore demands both transparency from government and fairness from those who hold it to account.

The purpose of this article is not to discourage scrutiny of government, nor to suggest that approved projects should escape public accountability. On the contrary, every kobo of public money must be properly accounted for.

However, meaningful accountability begins with asking the right questions. Was the project included in the Appropriation Law? Was a contract awarded? Were funds actually released by the Treasury? How much was released? How much work has been certified and paid for?

Only when these questions are answered with documentary evidence can the public fairly determine whether there has been prudent financial management, administrative delay or genuine financial misconduct.

An informed opposition is one that challenges government with facts rather than assumptions. Likewise, an informed citizenry understands the distinction between policy approval and financial authorisation.

Democracy is strengthened when public debate is guided by evidence, governments remain transparent and criticism is constructive. Only then can accountability fulfil its true purpose of protecting public resources, promoting good governance and ensuring sustainable development for the benefit of all.

Sanusi, a Former Commissioner for Education and Member, Kano State Executive Council, writes from Abuja.