Policy, Legal & Administrative Dimensions Of The Tertiary Education Fund Act Of 2011 -By Olanrewaju Olajuwon Saints

The Tertiary Education Trust Fund (TETFUND) was established by an Act of the National Assembly in June 2011. The Act replaced the Education Tax Fund Act Cap. E4 laws of the Federation of Nigeria 2004 and Education Tax Fund (Amendment) Act No 17, 2003. The Fund was set up to administer and disburse education tax collections to the Federal and State tertiary educational institutions in Nigeria. The Act establishing the Fund imposes a 2 per cent Education Tax on the assessable profits of all registered companies in the country. The levies are collected by the Federal Inland Revenue Service (FIRS).

Despite the TETFUND, There persist  general decay in human and material resources in Nigeria tertiary institutions due to poor funding. Besides, ASUU in 2014 pre-requisite to suspend strike, insisted that a minimum of 26 per cent of the annual budget should be allocated to the education sector and the funds would be used to provide basic infrastructure that would sustain effective learning and make the university system more functional and sustainable.

Reasonably, what is the essence of TETFUND? Should government scrap and move 2% education tax revenue to Federation Account, then consider 26% of the Budget allocated to education sector? Can TETFUND be repealed and amended with strict administrative scrutiny? Etc.

Also, the Policy, legal and Administrative dimensions of the Tertiary Education Fund Tax Act will be discussed and recommendation, where necessary considered!

POLICY FRAMEWORK- TETFUND ACT

TETFUND is an intervention fund to Tertiary Institution. The enabling Act establishing the Fund prescribes the distribution of the funds in the ratio 2:1:1 respectively to Universities, Polytechnics and Colleges of Education (COEs). Beneficiaries of the Fund are required to submit project proposals upon which the funds would be applied. TETFund requires that such projects must be in line with the beneficiary institution’s core mandate and should be relevant to teaching, learning and research; including improving the learning and teaching environment. However, there are still some challenges besetting the maximization of its allocations because of the Procurement Acts of 2007.

Invariably, Funds disbursement is done after the AIP (Approval-In-Principle) has been granted and the Due Process requirements have satisfactorily taken place. For Construction-related projects, disbursements are in three (3) tranches of 50%, 35% and 15%; while for Procurement-related projects, disbursements are in two tranches of 85% and 15%. The Due Process leads to accessing the First (1st) Tranche of funds and must be carried out in line with the provisions of the Public Procurement Act 2007. Aligning TETFUND act with Procurement Act after proper verification and recommendation by Board of Trustee create bottleneck in accessing and embarking on developmental projects in tertiary institutions.

The Efficiency of TETFUND allocations to tertiary institution could be maximized through the introduction of a “Blank Template Cheque” by this, institution should be allowed to allocate TETFUND intervention from TSA accounts based on their own procurement plans.

This perception is by all means rational, as the incessant strikes by the various unions of the nation’s tertiary educational institutions over the years could be attributed to financial demands. many of the tertiary institutions have been complaining about their inability to have access to funds from TETFund because of a number of factors.

Nevertheless, Dr. Musa Babayo, the Chairman of TETFund’s Board of Trustees, bemoaned the fact that the institutions, which received several billions as intervention funds in the last 10 years, had underutilized the funds observed with dismay that one of the major problems associated with accessing funds was improper documentation and rendition of financial returns.

“It is this problem that necessitated the Fund to come up with a draft format on efficient and effective guidelines for projects, programs and financial reports,’’ he said.

He said that TETFund’s insistence on strict adherence to the guidelines was posing a challenge for the institutions in their efforts to easily access the funds (source- www.tetfund.gov.ng/)

Technically, availability & accessing the fund defer, the gap within is “documentations” and un-attainable conditions, otherwise “subterfuge policy”.

LAGAL FRAMEWORK- TETFUND

Section 3 subsection 1 of TETFUND Act empowered the Board of Trustee to manage the fund while section 2 subsection 1 empowered the Federal Inland Revenue Service (FIRS) to collect education tax on behalf of TETFUND. FIRS is empower to deduct 5% of revenue generated for administrative expenses and Section 3 subsection 4 of TETFUND empower board of Trustee to retain 5% of the Education Tax for administrative expenses.

Incidentally, 10% of the Education Tax has been channeled to Administrative expenses. Rationally, routing the TETFUND through FIRS is illogical as this reduce the net available fund for disbursement. The Act need to be repeal to create an Intervention Fund Account for TETFUND remittance.

Section 10 & 11 of TETFUND Act list various offences and penalties for failure to comply with the act or remit tax due within 60 days, whereas collection and documentation is done in FIRS. The vacuum make it impossible for TETFUND to identify Evaders besides possibilities of collusion between staff of the agency, defaulting firms and FIRS to circumvent the system.

Section 3 subsection 2 of the TETFUND act accord the power to sue and be sued, thereby recognize TETFUND as corporate body with absolute standing yet, align the institution with several agencies  with contrary policies and law.

ADMINISTRATIVE OUTLOOK- TETFUND

The fund administration and disbursement usually  charade, particularly special intervention fund that is based on the discretion of Board of Trustee, there is no specific amount to be disbursed other than retaining 5% for administrative costs, there is no specific provision in the Act for other income except 5% of the income generated. The sum total is a wide privilege for misappropriation and embezzlement.

Also, they are lack of proper accounting record, lopsidedness in the management of ETF, lack of proper sharing formula of the fund among the tertiary institutions.

RECOMMENDED REFORM

The baby wouldn’t be thrown away with bath water. Several amendments required in the TETFUND Act but not a total scrap of the act. The following reform can be recommended;

• Review the documentation required in 2014 TETFUND guideline for fund intervention and disbursement to ease and prompt disbursement.
• Review the TETFUND ACT 2011 to empower the board of Trustee to collect, document, administer and manage the fund, rather routing through FIRS.
• Just like other agencies and parastatal, TETFUND staff should be included on the federal Payroll
• Provision or any section of the TETFUND should be free from other enabling Acts such as Procurement Act, FIRS Act etc. except constitution of the Federal Republic of Nigeria.