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Audit report indicts NNPC, DPR, PPPRA

By on March 13, 2013

stanley & yakubuThe House of Representatives Committee on Public Account has expressed dismay over the looting of the country’s revenue by public officials.

To this end, the Committee has asked the Inspector General of Police (IGP), Alhaji Mohammed Abubakar, to produce the chief executives of the Nigerian National Petroleum Corporation (NNPC), Petroleum Products Price regulatory Agency (PPPRA) and the Director, Department of Petroleum Resources (DPR), before it to answer questions by the Office of the Auditor General of the Federation on their financial records.

DailyPost investigation shows that the 2007 Auditor General’s report revealed how money was being moved without authorisation and in flagrant disregard of the Constitution.

The report reads: “In the year under review, sums totalling $174,000 and $911,224.15 were credited to the FGN Excess Proceeds of Crude Oil Sales Account as interest on Fixed Term Deposit and interest on Ordinary Deposit.

“The authority for placing the funds, which yielded the above interest in the deposit account, was not made available for audit verification. The banks where the deposits were made, the principal sums deposited, the tenor and the rate of interest were also not made available for audit verification.

“Sums totalling $213, 354, 142.31 and $20,515,048.62 were credited to the FGN Excess Proceeds of PPT/Royalty Account as interest on Fixed Term Deposit and interest on Ordinary Deposit.

“The authority for placing the funds, which yielded the interest in deposit account, was not made available for audit verification. The banks where the deposits were made, the principal sums deposited, the tenor and the rate of interest were also not made available for audit verification. The Accountant General has been asked to produce these documents for audit verification.

“The sum of $17,351,526.14 was transferred in April, 2007 from the Consolidated Revenue Fund Account to the “FGN Excess Proceeds of Crude Oil Sales Account”. The mandate authorising the transfer was neither made available for audit verification nor was the purpose of the transfer stated.

“The Accountant-General has been called upon to produce the mandate authorising the transfer and also indicate the purpose of transferring such money from the Consolidated Revenue Fund (CRF) to Excess Crude Oil Account.

“Amounts totaling $2,800,000,000.00 were transferred from the ‘FGN Excess Proceeds of Crude on Sales Account’ in November, 2007 to Fixed Term Deposit Account of an international bank.

“The bank where the deposit was made, the tenor, the interest rate, the certificate of deposit, the authority for the deposit and the relevant bank statements were not produced for audit verification.

“CBN Statement of Account for the ‘FGN Excess Proceeds of Crude Oil Sales Account’ revealed that $455,638,596.22 for June 2007 Excess Crude was credited to the account in July, 2007.

“In August, 2007, this same amount was reversed and the account credited with a lower amount of $445,638,596.22, giving rise to a shortfall of $10,000,000.00.

“Records showing details of full crude oil sales proceeds for the month of June, 2007, the benchmark figure and hence the Excess Crude amount were not made available so that the new amount credited could be verified.

“In view of the fact that the statements in question are bank statements ‘and the entries reflected physical cash movement, the Accountant-General of the Federation has been asked to state the status of the shortfall of the $10,000,000.00 not credited three weeks after the original lodgment was made.”

The chairman of the Committee, Solomon Adeola, asked that all the anomalies communicated to the Accountant-General of the Federation for prompt action be explained. He also requested him to produce the details from the CBN and forward same for audit verification.

The document also revealed: “At the Office of the Accountant-General of the Federation, it was observed from the component statements of 2007 that Joint Venture Cash Calls (JVC) of N549,973b Excess Crude of N1,168 trillion and Petroleum Product Subsidy of the sum of N236,641b were deducted from proceeds of crude oil sales, while the sums of N25.951b and N62,542b were excess proceeds deducted in respect of Petroleum Profit Tax (PPT) and Royalties.

“These deductions were made before the net revenues were paid to the Federation Account, contrary to the provisions of Section 162(1) of the 1999 Constitution, which requires all such revenues to be paid directly into the Federation Account.

“The sums of N 13,081b and N 16,895b being 4 per cent and 7 per cent of total Non-Oil and Gas Revenues, were deducted as cost of collection from the Federation Account and paid to Federal Inland Revenue Service and Nigeria Customs Service.

“There was no evidence to show that these rates were passed into law by the National Assembly. The Accountant-General of the Federation has been requested to produce the evidence showing that the rates for the deduction were approved by the Acts of the National Assembly, otherwise, advise the relevant collecting Agencies should seek formal legislative approval for the rates.”

“Audit examination of the mandate letters from NNPC to CBN in January and February 2007 revealed that the benchmark amount of the Domestic Crude Oil Sales proceeds was not fully paid by N38,816 billion to the Federation Account. This balance should be paid to the Federation Account, forwarding relevant particulars for audit verification.

“Of the total withdrawals made from the Account of the Excess Crude Oil in the year 2007, $1 ,604 billion could not be traced into the records of FAAC on Excess Crude Oil for the year.

“Similarly, payments totaling $1,569b made from Excess Crude Oil/PPT/Royalty Revenues as per FAAC records were not reflected in the CBN Statement of Account for the year 2007”.

NNPC boss, Andrew Yakubu is also expected to shed light on the allegation that through NNPC mandates to the CBN, N549b was paid for Joint Venture Cash Calls but only N441b was actually recorded in the books of NAPIMS as overheads, leaving a difference of N108b unaccounted for.

The Auditor General’s report revealed that the NNPC claimed to have allocated 3,834,798 barrels of crude oil to Port-Harcourt Refinery in the months of September and November, 2007. Audit verification, however, revealed that the refinery receipted only 2,245,744 barrels for processing, giving rise to a shortfall of 1,589,054 barrels valued at N15b.

“The sum of $4,451b was appropriated in the 2007 Budget for Joint Venture Cash Calls (JVCC) and this was fully released to the NNPC for the benefit of the Joint Venture operators.

“However, NAPIMS budget for the Joint Venture Operators in the same year was put at $4,114b, resulting in a surplus of $336m.

“Further audit scrutiny of the records .of the JVCC in the books of NAPIMS showed that the Joint Venture Operators were paid $1,714b.

“When compared with the $4,114,990b budgeted by NAPIMS for the Joint Venture Operators, a difference of $2,400b was revealed as budget under-implementation.

“Amounts totaling N80b and $1 ,550b were irregularly diverted for the execution of programmes not included in the approved budgets of the Joint Venture Operators.

“The programme and activities include performance balance/supply, Niger Delta security, NIPP projects and NAPIMS Overhead Cost”.

Yakubu, the Executive Secretary of PPPRA Reginald Stanley, and the Director, DPR, Osten Oluyemisiola were given till Wednesday afternoon to appear before the Committee.