The Federal Government has directed all Ministries, Departments and Agencies (MDAs) to refrain from awarding contracts or entering into any financial commitments without first obtaining the required budgetary approval and cash backing, in a renewed effort to strengthen fiscal discipline and ensure compliance with public procurement regulations.
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 and agencies, accounting officers, and federal pay officers.
According to the circular, the new operational guidelines became necessary following persistent violations of the Public Procurement Act, 2007, and other financial regulations governing the management of public funds.
The Accountant-General stated that the move was aimed at reinforcing the Federal Government’s revised cash management policy and preventing the indiscriminate award of contracts without adequate financial provisions.
“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,” the circular stated.
Under the new guidelines, no MDA is permitted to issue letters of award, execute contracts or incur financial obligations without first receiving a Warrant or Authority to Incur Expenditure (AIE) from the Federal Ministry of Finance.
The circular emphasised that such approvals must cover the entire contract value or the committed portion before any procurement process can proceed.
“No expenditure shall be incurred except on the authority of a Warrant/AIE. 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,” it stated.
To enhance transparency, the Office of the Accountant-General directed MDAs to generate and attach copies of approved Warrants or AIEs through the Government Integrated Financial Management Information System (GIFMIS) as proof that funds are available before contracts are awarded or payments processed.
The government also instructed that financial commitments, including purchase invoices and employee-related liabilities, must not exceed available and uncommitted warrant balances.
“All MDAs shall ensure that financial commitments are limited to uncommitted warrant balances, and at no time should financial commitments exceed the amount of Warrants/AIEs available,” the circular added.
In a related directive, the Bureau of Public Procurement (BPP) was instructed to process applications for Certificates of No Objection only when accompanied by valid Warrants or Authorities to Incur Expenditure.
The Accountant-General further reminded accounting officers that awarding contracts without budgetary provision, approval and cash backing constitutes an offence under the Independent Corrupt Practices and Other Related Offences Commission (ICPC) Act, 2000.
The circular also introduced stricter budget implementation measures by requiring all MDAs to submit annual and quarterly cash plans for capital projects to the Office of the Accountant-General.
Under the guidelines, annual cash plans, together with the first quarterly cash plan, were due by July 31, 2026, while subsequent quarterly submissions must be made on or before the 15th day of the first month of every new quarter.
MDAs were also directed to prioritise projects in line with the Federal Government’s policy objectives, while the Cash Management Technical Committee will continue reviewing implementation plans and advising the Federal Cash Management Committee on priority projects.
The Accountant-General charged accounting officers, chief executives, directors of finance, internal auditors and other relevant officials to ensure strict compliance with the directive.
The latest policy strengthens the Federal Government’s cash management framework introduced in 2024 as part of ongoing reforms under the Tinubu administration to promote transparency, fiscal responsibility and value for money in public spending.
Government officials believe the measure will reduce abandoned projects, curb the accumulation of unpaid contractual obligations and ensure that capital projects are executed only when adequate budgetary provisions and cash backing are available.