The Federal Government has issued a strict directive barring all Ministries, Departments, and Agencies (MDAs) from awarding contracts or incurring financial commitments without securing prior budgetary approval and verified cash backing.
​The measure was announced in a Federal Treasury Circular dated July 31, 2026, signed by the Accountant-General of the Federation, and disclosed on 3rd August. Dr. Shamseldeen Ogunjimi, and addressed to ministers, permanent secretaries, and heads of extra-ministerial agencies in Abuja.
MDAs are prohibited from issuing contract award letters, signing agreements, or initiating financial obligations without obtaining an official Warrant or Authority to Incur Expenditure (AIE).
The policy reinforces strict adherence to the Public Procurement Act, 2007, addressing persistent non-compliance and unapproved discretionary spending across federal institutions.
The government aims to eliminate unfunded commitments that lead to stalled infrastructure projects and unpaid contractor debts. Implementation aligns with the government’s revised cash management policy, designed to route payments directly to verified contractors and service providers without intermediary delays.
​”No MDA shall issue letters of award, sign contracts, or enter into any financial obligations unless the corresponding Warrant/AIE covering the committed portion of the contract has been duly released.” Said Dr. Shamseldeen Ogunjimi.
MDAs are now mandated to generate, download, and attach copies of Warrants or Authorities to Incur Expenditure (AIEs) directly from the Government Integrated Financial Management Information System (GIFMIS) to serve as verifiable proof of funds before issuing awards or processing vendor payments.
To streamline capital budget execution, MDAs were required to submit their annual cash plan and first quarterly cash plan by July 31, 2026, with subsequent quarterly submissions due by the 15th day of the first month of every new quarter.
Accountant-General Dr. Shamseldeen Ogunjimi warned accounting officers that issuing contract awards without budgetary provision and verified cash backing violates the ICPC Act 2000 and will attract legal penalties.
Purchase invoices and employee payables must strictly remain within available, uncommitted warrant balances, at no point are financial commitments permitted to exceed released AIE funds.
