New Telegraph

February 25, 2024

NNPC faults Auditor-General over unremitted N4.076trn

There was altercation, yesterday, at the Senate, between  the Auditor-General for the Federation, Aghughu Adolphus and the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, over alleged unremitted N4.06 trillion into the Fed  eration Account.


This was as the Senate Committee on Public Account probing the allegation directed NNPC officials to come up with more detailed and convincing explanations on how it expended the money on other items within one week.


The Office of Auditor- General had, in its 2016 Audit report, accused NNPC of not remitting N4.076 trillion into the Federation Account  from operational proceeds made between 2010 and 2016. Accordingly, the Senate Committee on Public Account decided to look into the matter at its sitting yesterday.


During the meeting, Olutoye Agesin, represented the Auditor-General in his capacity as the Director of Public Accounts, while Umar Ajiya represented the NNPC GMD, as the Chief Finance Officer (CFO) of the oil corporation. In his submission, the NNPC Chief Finance Officer explained that the alleged unremitted N4.076 trillion was spent on other critical areas of operations, which were not taken cognizance of by the Auditor- General of the Federation in the 2016 Audit report.


However, the representative of the Auditor-General, Agesin, countered him, saying that required explanations were not given for such spending by relevant officials of the NNPC. Reacting to Agesin’s position, the NNPC CFO said that the alleged unremitted money was expended on oil pipelines repairs, domestic fuel supplies which were heavily subsidized, security and management matters.


“In fact, Mr. Chairman, distinguished members of this committee, from such expenses made within the stated period, it is even the Federal Government owing us N239 billion,” NNPC’s Ajiya said. He added that response to the query had been sufficiently made in the forensic audit conducted later, saying that the reports of the audit were forwarded to the Office of the Auditor-General and the Senate Public Account Committee.


“The forensic audit has been done; the auditor general has a copy of the forensic audit. At the end of the day, that forensic audit established that NNPC was owing about N797 billion, but also on the other hand, the federation was also owing NNPC, the net effect was that the NNPC was being owed N239 billion. So, there is nothing like N4 trillion withheld by NNPC.


“The books are with the CBN, you can’t hide N4 trillion anywhere. It has gone through the consumption of PMS and that is why everybody has to be involved with respect to deregulation,” he explained.


Making a counter response, Agesin admitted that though a copy of the forensic audit report was received by them in the Office of Auditor-General, explanations given by the NNPC on alleged spending made with the N4.076 trillion were not factual with required evidences of spending.


“N4 trillion is not a small amount of money that can just be said to be spent on pipeline repairs and oil subsidy within five years. Line by line details of such spending ought to have been made in the NNPC’s response to the query,” he said.


Most members of the Committee, including Senators Ayo Akinyelure (PDP, Ondo Central), Ibrahim Abdullahi (PDP, Sokoto South), Suleiman Kwari (APC, Kaduna North) among others, supported the representative of the Auditor- General by telling the CFO of the NNPC, to give detailed account of how the money was spent.


Consequently, the Vice Chairman of the Committee, Senator Ibrahim Hassan Hadejia (APC, Jigawa North East), directed the Chief Finance Officer of NNPC to furnish the committee with the required details within seven days, upon which the query would be vacated or sustained. He, therefore, ruled that the query be stood down for a period of one week.


Meanwhile, Group Managing Director of NNPC, Malam Mele Kyari, has said that the monetary deductions made from the 2015 operations of the corporation had legal backing.


Kyari made this clarification while responding to the audit query from the office of the Auditor General of the Federation over dwindling government revenue from 2014 till 2020 at the Public Accounts Committee of the House of Representatives yesterday.


The House public accounts committee had invited the GMD to defend deductions from source of the sum of N865 billion from N2.4 trillion generated by the corporation in 2015.


The corporation was to also explain the nonremittance of N3.8 trillion of domestic crude oil sales; the non-collection of gas receipts for some months in the year; and the issue of refund of N450 billion, among others. It will be recalled that Auditor General had, in the query, said the act violated Section 162 of the constitution which provides that all revenue proceeds should be paid to the Federation Account.


Appearing before the committee, Kyari said that NNPC Act, a certain judgement of the Supreme Court judgement and approval of the Attorney-General of the Federation empowered them to make deductions of their running cost from source.


“What we do is backed by the provisions of the law. First, the NNPC Act is very clear that we should submit revenues net of our cost. “There is also an informed decision of the Supreme Court and also the Attorney General of the Federation, that that position is correct and supported by the provisions of the law,” Kyari said. Earlier, PAC chairman, Hon. Oluwole Oke, said that NNPC as an agency of government was accountable to the people and ought to make remittances to the federation account.


Reserving ruling on the matter, Oke said the committee will constitute a subcommittee to enable them re-examine the legal provisions to ascertain the tenacity of Kyari’s submission.


“Let us compare the provisions of the NNPC Act with Sections 88, 81 of the Constitution. We need to read the provisions of the NNPC Act along with Sections 80, 81 of the Constitution of the Federal Republic of Nigeria to be able to decide which is superior, and which we are to follow.


“We would set up a subcommittee of legal minded members to read through the judgement of the Supreme Court on this matter vis-a-vis the letter from the letter of the Attorney General.


We need to make an informed position of the matter. If the Supreme Court had taken a position, we need to be mindful of such. If we are in disagreement, the best option we have is to go into legislation, because it means the court has clearly interpreted the provisions of the law. Sources of law are judicial precedents,” Oke said.

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