The Federal Government has directed all Ministries, Departments and Agencies (MDAs) to stop awarding contracts or entering into any financial commitments without first securing the required budgetary approval and cash backing, in a move aimed at strengthening fiscal discipline and curbing abandoned projects.

The directive was contained in a Federal Treasury Circular dated July 31, 2026, and signed by the Accountant-General of the Federation, Dr. Shamseldeen Ogunjimi.

The circular, obtained by our correspondent on Sunday, was addressed to ministers, permanent secretaries, heads of extra-ministerial departments and agencies, accounting officers, federal pay officers, and other key public officials.

According to the Accountant-General, the new operational guidelines became necessary following persistent violations of the Public Procurement Act, 2007, and other extant financial regulations governing public expenditure.

The circular stated: “Further to the Treasury Circular… captioned ‘Revised Policy on Cash Management and Bottom-Up Cash Plan Operational Guidelines,’ it has become necessary to strengthen and deepen the implementation of the policy sequel to the observed non-compliance with the Public Procurement Act, 2007, and other extant laws and regulations.”

It added that the guidelines were issued to ensure full compliance with the implementation of the 2026 capital budget.

A major provision of the directive stipulates that no MDA shall issue letters of award, sign contracts, or incur any financial obligation without first obtaining a Warrant or Authority to Incur Expenditure (AIE).

The circular stated: “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, or enter into any financial obligations unless the corresponding 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.”

To further enforce compliance, the Office of the Accountant-General directed all MDAs to attach copies of Warrants or AIEs generated through the Government Integrated Financial Management Information System (GIFMIS) as proof of fund availability before contracts are awarded or payments processed.

The circular also warned that financial commitments, including purchase invoices and employee payables, must not exceed the value of available warrants.

“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,” it stated.

In another directive, the Bureau of Public Procurement was instructed to process only applications for “No Objection” certificates that are supported by valid Warrants or AIEs.

The Accountant-General further reminded accounting officers that awarding contracts without budgetary provision, approval and cash backing constitutes an offence under the Independent Corrupt Practices and Other Related Offences Commission (ICPC) Act 2000.

“Accounting Officers are invited to note that it is an offence under the ICPC Act 2000 to award or sign any contract without budgetary provision, approval and cash backing,” the circular stated.

To improve budget execution and cash management, the government directed all MDAs to submit annual and quarterly cash plans for their capital budgets to the Office of the Accountant-General.

According to the circular, annual cash plans, effective from July 15, 2026, alongside the first quarterly cash plan, were to be submitted on or before July 31, 2026, while subsequent quarterly cash plans must be submitted on or before the 15th day of the first month of each new quarter.

The circular also instructed MDAs to prioritise projects and programmes in line with the Federal Government’s policy objectives.

It stated that the Cash Management Technical Committee would continue reviewing budget implementation plans and advising the Federal Cash Management Committee on priority projects, while accounting officers and directors of finance would be responsible for ensuring prudent cash management within their respective institutions.

The Accountant-General urged accounting officers, chief executives, directors of finance, internal auditors and other relevant officials to ensure strict compliance with the directive.

The latest measures reinforce the Federal Government’s revised cash management policy introduced in 2024 to improve budget implementation, eliminate the award of contracts without available funding and enhance accountability in public spending.

The Tinubu administration has repeatedly pledged to strengthen fiscal discipline, improve transparency and ensure value for money in public expenditure as part of its ongoing economic reforms.

The new directive is also expected to reduce the incidence of abandoned projects, curb the accumulation of unpaid contractual liabilities and ensure that capital projects are undertaken only when adequate budgetary provisions and cash backing are in place.