The Federal Government has directed all Ministries, Departments and Agencies (MDAs) to stop awarding contracts or entering into financial commitments without first obtaining the necessary budgetary approval and cash backing, as part of efforts to strengthen fiscal discipline and ensure compliance with procurement regulations.
The directive was contained in a Treasury Circular dated July 31, 2026, signed by the Accountant-General of the Federation, Dr. Shamseldeen Ogunjimi.
Addressed to ministers, permanent secretaries, heads of extra-ministerial departments and agencies, accounting officers and federal pay officers, the circular said the new measures became necessary following repeated violations of the Public Procurement Act, 2007, and other financial management laws.
According to the Accountant-General, the guidelines are intended to strengthen the Federal Government’s revised cash management policy and improve the implementation of the 2026 capital budget.
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.
“To ensure full compliance and seamless implementation of the policy, the following operational guidelines for the implementation of the 2026 capital budgets are hereby issued.”
Under the new directive, no MDA is permitted to issue letters of award, sign contracts or incur financial obligations without first obtaining a Warrant or Authority to Incur Expenditure (AIE).
It 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.”
The Office of the Accountant-General also directed MDAs to generate and attach Warrants or AIEs through the Government Integrated Financial Management Information System (GIFMIS) before contracts are awarded or payments processed as proof that funds are available.
The circular further warned agencies against making financial commitments beyond approved warrant balances, stressing that purchase invoices, employee payables and other obligations must not exceed available funds.
The Bureau of Public Procurement (BPP) was also instructed to process applications for “No Objection” certificates only when they are accompanied by valid Warrants or AIEs.
The Accountant-General reminded accounting officers that awarding or signing contracts without budgetary provision, approval and cash backing constitutes an offence under the Independent Corrupt Practices and Other Related Offences Commission (ICPC) Act, 2000.
To improve budget implementation, the Federal Government directed all MDAs to submit annual and quarterly cash plans for their capital budgets to the Office of the Accountant-General.
The circular stated that annual cash plans, beginning from July 15, 2026, alongside the first quarterly cash plan, were due on or before July 31, 2026, while subsequent quarterly cash plans must be submitted by the 15th day of the first month of every new quarter.
It also instructed agencies to prioritise projects and programmes in line with the Federal Government’s policy objectives.
According to the circular, the Cash Management Technical Committee will continue reviewing budget implementation plans and advising the Federal Cash Management Committee on priority projects, while accounting officers and directors of finance will be responsible for ensuring prudent financial management in their respective institutions.
The directive urged accounting officers, chief executives, directors of finance, internal auditors and other relevant officials to ensure strict compliance.
The latest measure reinforces the Federal Government’s cash management reforms introduced in 2024 to improve budget execution, prevent unfunded contract awards and promote transparency in public spending.
The policy is also expected to reduce abandoned projects, curb the accumulation of unpaid contractual liabilities and ensure that capital projects are executed only when adequate funding has been approved and made available.
