The Federal Government has directed all Ministries, Departments and Agencies (MDAs) to stop awarding contracts or entering into financial commitments without first obtaining the required budgetary approval and cash backing.
The directive was contained in a Federal Treasury Circular dated July 31, 2026, signed by the Accountant-General of the Federation, Dr. Shamseldeen Ogunjimi, and addressed to ministers, permanent secretaries, heads of extra-ministerial departments, accounting officers and federal pay officers.
According to the circular, the new operational guidelines were introduced following widespread violations of the Public Procurement Act, 2007, and other financial regulations governing public expenditure.
Under the directive, no MDA is permitted to issue letters of award, sign contracts or incur any financial obligation unless a Warrant or Authority to Incur Expenditure (AIE) covering the full or committed portion of the contract sum has been released by the Minister of Finance and Coordinating Minister of the Economy to the Accountant-General.
The Office of the Accountant-General also instructed 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 further directed that financial commitments, including purchase invoices and employee payables, must not exceed the value of available warrants.
In addition, the Bureau of Public Procurement (BPP) was instructed to process only applications for “No Objection” certificates that are backed 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 ICPC Act 2000.
To improve budget implementation, all MDAs were directed to submit annual and quarterly cash plans for their capital budgets to the Office of the Accountant-General. Annual cash plans and the first quarterly plans were to be submitted by July 31, 2026, while subsequent quarterly plans must be submitted on or before the 15th day of the first month of each new quarter.
The circular also directed MDAs to prioritise projects in line with the Federal Government’s policy objectives, while the Cash Management Technical Committee will continue reviewing budget implementation plans and advising the Federal Cash Management Committee on priority projects.
Accounting officers, directors of finance and other relevant officials were urged to ensure strict compliance with the directive.
The latest measure reinforces the Federal Government’s revised cash management policy introduced in 2024, which is aimed at strengthening fiscal discipline, preventing the award of unfunded contracts and improving budget implementation.
The Tinubu administration says the policy is expected to reduce abandoned projects, limit the accumulation of unpaid contractual liabilities and ensure that capital projects are executed only when adequate budgetary provisions and cash backing are available.
