Overview of Financial Regulations

Overview of Financial Regulations

Quick Answer: The Financial Regulations (FR) are the primary rulebook that empowers and guides every federal public officer in handling public money — receipt, custody, accounting, procurement, stores, and disbursement. They bind all federal MDAs, derive authority from the 1999 Constitution and the Finance (Control and Management) Act, and are administered by the Office of the Accountant-General of the Federation (OAGF).

What the Financial Regulations Are

The Financial Regulations (FR) are the set of rules that govern how the Federal Government of Nigeria manages its money. They cover the receipt and custody of revenue, the accounting for public funds, the procurement of goods and services, the custody and utilisation of government stores and assets, and disbursement from public funds such as the Consolidated Revenue Fund (CRF), the Development Fund, and the Contingencies Fund. They apply to all federal Ministries, Departments, and Agencies (MDAs) and other arms of government.

The FR are not a standalone statute. They are administrative regulations issued under the authority of the Finance (Control and Management) Act, Cap F26 LFN 2004 (formerly Cap 144 LFN 1990), which itself derives from the 1999 Constitution. They operationalise the constitutional requirement that no money be withdrawn from the CRF except as authorised by an Appropriation Act (Constitution §80).

Legal Basis

The FR draw authority from several instruments:

• The Constitution of the Federal Republic of Nigeria 1999 (as amended) — the supreme legal basis for all financial authority, particularly §80 (CRF), §81 (appropriation), and §162 (Federation Account).
• Finance (Control and Management) Act, Cap F26 LFN 2004 — the statute that empowers the Accountant-General to issue and enforce financial regulations.
• Annual Appropriation Act and Supplementary Appropriation Acts — authorise withdrawals from the CRF.
• Fiscal Responsibility Act, 2007 — sets rules for fiscal transparency and prudent management of national resources.
• Public Procurement Act, 2007 — governs procurement, which the FR incorporate by reference.
• Revenue Mobilisation, Allocation and Fiscal Commission Act — relates to revenue collection and allocation.

The 2006/2009 Revision

The FR were last comprehensively reviewed in 2000 before the 2006/2009 revision. The 2009 edition — the second since the return to democratic rule in 1999 — was driven by government concern for probity and transparency. Its preface was signed by the then Honourable Minister of Finance, Dr. Mansur Muhtar, OFR. Two notable additions distinguish this edition:

1. A dedicated Chapter on Public Procurement of Goods and Services, aligning the FR with the then-new Public Procurement Act 2007.
2. A Codification of Offences and Sanctions, consolidating the disciplinary consequences of financial misconduct.

A Draft Federal Government Financial Regulations 2023 has since been prepared to incorporate IPSAS/IFRS compliance, GIFMIS, IPPIS, and the Treasury Single Account, but candidates should treat the 2009 edition as the operative instrument for exam purposes unless an exam update is issued.

How the FR Bind MDAs

The FR apply to every federal MDA and to officers handling public money. Two key accountability roles run through the Regulations:

Every MDA must also maintain an Internal Audit Unit for complete and continuous audit of its accounts and records, and must operate within the accounting codes and manuals issued by the OAGF.

Relationship to the Public Procurement Act 2007

The FR and the Public Procurement Act (PPA) 2007 operate together. Historically, the FR contained the procurement rules themselves; after the PPA 2007 came into force, procurement is governed primarily by the PPA, while the FR retain the broader financial-management frame (receipts, payments, stores, accounting). Where a procurement question arises, the PPA 2007 and its regulations take precedence on procurement procedure; the FR govern the surrounding financial controls (payment authority, virement, retirement of advances). The 2009 FR chapter on procurement is read alongside, not in place of, the PPA.

Role of the Office of the Accountant-General of the Federation

The Accountant-General of the Federation (AGF) heads the Federal Government accounting services and the Treasury. Key duties include:

• Acting as chief accounting officer for the receipts and payments of the Federation.
• Collating, preparing, and publishing the statutory financial statements of the Federation.
• Maintaining and operating the Federation Account and the Consolidated Revenue Fund.
• Establishing and supervising Federal Pay Offices.
• Conducting routine inspections of MDA books of account.
• Approving accounting codes, internal audit guides, and stock verification manuals.
• Issuing Treasury Circulars and Accounting Manuals (the TSA policy was promulgated through such circulars).
• Investigating cases of fraud, loss of funds, assets, or stores.

Why This Matters for the COMPRO Exam

The Financial Regulations domain carries 30% of the 100-question COMPRO CBT. Questions test whether a candidate knows which instrument governs which transaction, who is accountable, and what procedure must be followed. Remember the hierarchy: the Constitution sets the supreme rule, the Finance Act authorises the regulations, the FR operationalise daily financial management, and the PPA 2007 governs procurement specifically. The OAGF is the institutional anchor.