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FRC tackles NNPC over non-submission of audited accounts

By on February 12, 2016

The Fiscal Responsibility Commission (FRC) tuesday carpeted the Nigerian National Petroleum Corporation (NNPC) for allegedly failing to provide its audited financial statements to the commission since 2011.

It also chided the corporation for not submitting its Medium Term Expenditure Frameworks (MTEF) annual budgets from 2012 to 2015 as well as projections of operating surpluses in violation of the FRC Act, 2007.

Speaking at a meeting between the FRC and top management staff of the corporation in Abuja to highlight the infractions, the acting Chairman, FRC, Mr. Victor Murako, said the corporation had not prepared or audited its financial statement in  the last six years, flagrant violation of section 23 (3) of FRA 2007.

He said: “The corporation has repeatedly failed to respond to correspondences especially after the last submissions made for 2009 financial year in July 2012. NNPC has also failed to submit quarterly revenue returns since 2010. All efforts to ensure compliance through letters and phone calls proved abortive despite the fact that two desk officers were appointed by NNPC to liaise with the commission.

“NNPC, however, in November 2015 responded to the request for submissions of documents. This is a clear indication that the documents submitted are grossly inadequate and fall short of the compliance of the provision of FRA 2007 and international best practice.”

According to him, “The last approved audited financial statement submitted by NNPC was for 2009 financial year. What was submitted for 2010 to 2014 is a one-page summary financial report extracted from Draft Financial Statements and Management Accounts.

“It is very clear that NNPC has not prepared and/ or audited its financial statements in the last six years which is a violation of section 23 (3) of FRA 2007. This section requires all scheduled corporations to prepare and publish approved annual audited financial statements not later than three months after the financial year.”

Meanwhile, Group General Manager, Accounts, Mr. Mike Balami, who also led the NNPC delegation to the meeting, admitted that the corporation actually beached the FRC Act but added that the accounts for 2010 had already been prepared.
He said three auditors had been appointed by the NNPC to try to clear a backlog of unaudited financial statement by September 2016 in order to usher in a new dispensation at the corporation.

The FRC is bent on ensuring compliance with the FRA by revenue generating agencies of government which had often violated the act, partly because there are no immediate sanctions proposed by the act. But the commission is currently seeking to amend the act to give it more powers to effect punishment for non-compliance.