A 2016 Audit report of the books of the Federal Government as well as the Nigerian National Petroleum Commission, NNPC conducted by Price Waterhouse Cooper has indicted the federal government with damning evidence of massive financial impropriety.
Price Waterhouse Cooper (PwC) is contracted by the Federal Government to Audit its books yearly in accordance with provisions in section 85 of the Constitution of the Federal Republic of Nigeria (1999) which mandates the audit of all public accounts, including the federation accounts and accounts of all government parastatals.
Subsection 2 of the same section also empowers the Auditor-General or any person authorized by him to have access to all account records of the government for Audit purposes.
Investigations by the firm revealed that a N50 million loan was written off the books of the National Poverty Eradication Programme (NAPEP), Federal Ministry of Agriculture as well as several public servants without proper disclosure in the financial statements of the agencies.
In like manner, several revenue generating and collecting agencies like the NNPC and Department of Petroleum Resources, DPR did not remit any revenue into the Federation account for several months without proper authorization or explanation.
Several Critics have scrutinized the contents of the 2016 Audit report which was recently released to the general public and highlighted several discrepancies uncovered by the report.
PwC reported that a sum of N4 trillion was unremitted to the Federation Account by the Nigerian National Petroleum Corporation (NNPC). According to excerpts from the report;
“The total revenue unremitted as at 1st January 2016 from amounts payable into the Federation Account by NNPC was ₦3,878,955,039,855.73 [Three trillion, eight hundred and seventy-eight billion, nine hundred and fifty-five million, thirty-nine thousand and eight hundred and fifty-five naira].
The sum of N1,198,138,355,860.30 was due in revenue to the Federation Account out of the total generated in 2016, however, NNPC paid the sum of N1,000,545,058,966.2 resulting in an amount withheld of N197,593,296,894.02. This brought the total amount withheld by NNPC from the Federation Account as at 31 December 2016 to N4,076,548,336,749.75.”
The Audit report also alleged that the NNPC had kept records of its financial transactions in an opaque manner.
The agency failed to clearly state the exact volume of crude oil delivered to Warri Refinery and Petrochemical Company (WRPC), as well as the Kaduna Refinery and Petrochemical Company (KRPC).
“From the examination of the Domestic Crude Oil Lifting sales profile, a total crude oil lifting of 8,399,027 bbls with a total sales value of $376,655,589.03 (N102, 659,577,632.16) was stated to have been lifted jointly by these two companies.” The report revealed.
The report concluded in this regard that the failure of the NNPC to properly record the deliveries separately and charge each company directly made it an uphill task to reconcile and account for each lifting.
The Audit report further indicted the Federal government for the misappropriation and misuse of Ecological funds. The funds which had been set aside for ecological disasters were used for other activities which were not included in the financial records.
“Over N28 billion, out of the N48,601,928,311.08 meant for development of natural resources, was diverted to other projects. Similarly, the Federal Government “borrowed” from these funds without stating how it intended to pay back.
We note that the various withdrawals from Funds by the Federal Government are stated to be borrowings. We further observed that the arrangements for the repayment of these funds or borrowings are unclear. For example, the 2017 Budget did not include any appropriations for the repayment of these borrowings.”
59 Ministries, Departments and Agencies, MDAs were also indicted for failing to return the total sum of N413, 449,306.08 left over from imprest to the MDAs back to source.
The Report noted that this act was in contravention of the Financial Regulation (2009), which stipulated that “all standing impress must be retired on or before the 31st December of the financial year in which they were issued, while special imprest shall be retired immediately the reason for which they were granted cease to exist.”
No explanation was also given for the unremitted excesses.
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There was also a substantial reduction in revenue collected across government agencies the exception being the Nigerian Customs Service (NCS).
The total sum of N941, 039, 251, 064 was reported uncollected by Federal Inland Revenue Service (FIRS), Department of Petroleum Resources (DPR) and the NNPC.
According to excerpt from the report;
“The NNPC revenue fell from N2,442,895,781,050.53 to N1,725,318,486,455.07 a difference of N717,577,294,595.46 representing about 29% decrease.
FIRS revenue fell from N2,403,882,419,922.32 in 2015 to N2,320,485,354,727.58 a difference N83,397,065,164.74 representing a marginal 3.4% decrease while that of DPR fell from N608,083,591,121.01 to N468,018,699,815.74 a difference of N140,064,891,305.27 representing 23% decrease.”
The Senate was not left out of the scandal too. The Audit Report revealed that an advance payment of N747 million given to staff of the Nigerian Senate for procurement in 2016 had not been retired as of June 2017.
Several public servants under the Federal Ministry of Power, Works and Housing also received cash advances to the tune of N26, 369, 523 which was not retired at the end of the financial year.
The same officers were further granted more cash advances although the old one was yet to be retired.
The Bureau of Public Service Reform also practiced the same method of embezzlement as Fifty-six members of staff received advance cash of various sums, totaling N35, 209, 835 that also went unremitted at the end of the financial year.
The Report finally indicted the Federal Government for withdrawing from the federal account without the authorization of the Auditor- General. According to the federal Government, the withdrawals had been made to offset external debts being owed by the 36 states as well as the FCT.
The report however pointed out that the withdrawal contravened Section 168 (1) of the 1999 constitution that holds that
“Where any payment falls to be made under this Part of this Chapter, the amount payable shall be certified by the Auditor-General for the Federation”.