The Federal Government on Thursday said the January allocation from the Budget Support Facility, to Ekiti State was suspended because the state failed to comply with the basic requirements for participating in the facility.
A statement by the Ministry of Finance signed by the Director of Information, Salisu Dambata, said the BSF is a Conditional Loan Programme to State Governments introduced to enhance fiscal prudence, transparency, efficiency in public expenditure and payment of salaries.
Governor of Ekiti State, Ayodele Fayose, had on Tuesday accused the Federal Ministry of Finance of withholding the state's statutory allocation for January for political reasons.
"In the last three, four weeks, after the Federal Allocation Committee meeting, it is sad that Ekiti Federal Allocation for January has not been released," Mr. Fayose told journalists in Ado-Ekiti.
He said efforts by himself and other government officials to get explanations from the ministry yielded no results.
He alleged that the ministry of finance was victimising the people of Ekiti State for his criticism of the policies of the federal government.
The ministry said the Ekiti government failed to comply with the required conditions for the payment, and was not the first state to be denied the funds on such grounds.
It denied the claim that the ministry of finance withheld any statutory allocation due to Ekiti State, or any other State in the country.
"This is not the first time of non-compliance by the Ekiti State Government," the statement read.
"His administration defaulted in meeting the conditions specified and agreed upon by the 35 State Governments that are participating in the programme as contained in the Fiscal Sustainability Plan (FSP) and the Ekiti State Government was warned formally of its failure to comply with the full requirements vide a letter on August 5, 2016, with reference number HMF/FMF/ASG/1/2016.
"The failure of Ekiti State Government to comply with the requirements and conditions for the Budget Support Facility (BSF) resulted in a letter sent to the Chief of Staff to notify him of the suspension of BSF for Ekiti State and it was conveyed to Mr. President before payment to the Ekiti State Government was reinstated.
"The Ekiti State Government and all the other participating States are aware of the consequence of failure to comply with the full conditions and it is not the first time that a State would be stopped from accessing the Facility due to non-compliance.
"In the course of its normal duties, the Ministry of Finance has the right to query, suspend or withhold funds as part of the conditions of the Budget Support Facility."
The Ekiti government described the explanation as an afterthought meant to mislead the public.Ekiti State governor, Ayodele Fayose
The Special Assistant to the governor in Public Communications and New Media, Lere Olayinka, said the state signed up for N14.4 billion and had received funds monthly in the last seven months from the ministry of Finance .
"So when did they realise that Ekiti State did not meet the conditions? Mr. Olayinka queried. "Or did they send the allocations in the last seven months in error?"
He also argued that there was no warning letter or notification from the Ministry of Finance before the governor raised the alarm, else there would have been no need for the governor to write a letter to the ministry demanding for explanations on the non-release of the funds.
"If the sent any letter, maybe they sent it today, because the governor was there yesterday and before then no one knew the reasons why the funds were not released," Mr. Olayinka said.
"As I am talking to you, we have not received any letter from the ministry, if they sent any letter, maybe they sent it today. This explanation is an afterthought."
Mr. Olayinka also said he was aware that the funds was earlier sent to the Central Bank of Nigeria along those of other states, but was later recalled and the name of Ekiti State removed from the list of 35 states.