Kogi House of Assembly on Tuesday said most Local Government Councils in the state illegally took loans from commercial banks from May, 2013 to date in violation of the state Local Government Law, 2000.
The assembly disclosed this in a resolution at plenary on Thursday in Lokoja following the adoption of the report of an ad-hoc committee instituted to investigate alleged retrenchment in the councils.
Presenting the report, chairman of the committee, Alhaji Suleiman Babadoko said servicing of the loans had further compromised the financial position of the councils to pay salaries.
According to Babadoko, apart from Dekina and Ijumu councils that did not take loans, the rest took and servicing of the loans reduced the monthly percentage of salaries payable to the council staff.
He said that though the councils claimed to have obtained permission from the Ministry of Local Government and Chieftaincy Affairs, seeking and obtaining the loans without recourse to the state House of Assembly violated section 53 of the law.
The state Local Government Law, 2000 (As Amended), he said, provided in part that “No Local Government shall borrow an amount exceeding N1million without the approval of the House of Assembly.”
He therefore urged the council chairmen to desist from collaborating with the Ministry of Local Government and Chieftaincy Affairs to acquire loans without observing due process of law mandating them to secure approval from the house.
As part of its recommendation, the committee called for immediate stoppage of all manners of deductions outside the statutory deductions to curtail further financial strangulation of the councils.
It also recommended the stoppage of joint projects initiated at the Joint Allocation Committee (JAC) level adding that chairmen were free to initiate projects under the SURE-P intervention funds rather than pinching the salary accounts.
The , Rt. Hon. Momoh-Jimoh Lawal adopted the report following overwhelming support of the members.