• Interest on JVC Call Account too
  • Audit Report asks NNPC to make refunds to FG

crudeNot less than N936,027,634,479.81 being proceeds from crude oil sales remains unaccounted for by the Nigerian National Petroleum Corporation, NNPC. The same applies to about $998,881.77 earned as interest on Joint Venture Cash Call Account.
Principally, crude oil sales at the NNPC is the major function of the Crude Oil Marketing Division, COMD of the corporation.
A detailed audit of NNPC’s crude sales conducted by the Office of the Auditor General of the Federation, OAGF, in 2013 also unraveled shocking fraud and shady procedures in the system of the internal accounting process of the corporation.
Section 3.35 of the report obtained by Nigerian Pilot stated that “it was observed from the explanation of NNPC mandates to CBN on domestic crude oil sales that a total sum of N936, 027,634,479.81 was not remitted to the Federation Account by NNPC within the period under review.” The report noted that as at the time of the audit under reference, NNPC had just commenced refunds of another debt of N450million, representing previous under-remittances to the Federation Account.
The audit report from the OAGF therefore stated that “the Group Managing Director of NNPC had been informed through the Accountant General of the Federation to provide explanation for the flagrant attitude of withholding domestic crude sales revenue and the withheld amount of N936,027,634,479.81 should be refunded urgently and the recovery particulars forwarded to my office for verification.”
On the interest earned on Joint Venture Cash Call, the auditors said they observed that “a total of US$998,881.77 as detailed below was earned as interest on Joint Venture Cash Call Account in the year 2012. There was no budgetary provision for this amount as income receivable into the Joint Venture Cash Call Account.”
The auditors therefore informed the management of NNPC through the OAGF “to refund the interest of US$998,881.77 earned on the Joint Venture Cash Call Account to Federation Account as petroleum related revenue and evidence of the payment forwarded to this office for audit confirmation.”
As at the time of filing this report, no holistic audit of the NNPC has been carried out, putting to question whether recommendations of that panel was adhered to, even as the Senate is billed to undertake a comprehensive oversight on the corporation.

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Instructively, the statutory auditors of the Joint Venture Operators who allegedly owe the NNPC much in terms of interests payable were found wanting in the services, contrary to expected professional discharge of their duty to the NNPC and Nigeria.
The report observed that the statutory auditors of JVs were in the habit of not including management report in their audit report. They allegedly submitted only the audited accounted accounts of the operators to NNPC/NAPIMS without the management report.
Experts argue that the management report reveals the weaknesses in not only the accounting system of the organisation; it also unveils loopholes in the relevant procedures that should check fraud and similar underhand deals.
According to the auditors, “it should be noted that the non inclusion of the management reports with the audited financial statements made the audited assignment incomplete. The non-release of the management letters to the audit team contravenes Section 85(2) of the Constitution of the Federal Republic of Nigeria 1999.
According to oil and gas experts, the ongoing probe of the sector, if done diligently, would unearth more questionable deals in the COMD of the corporation with expected refunds to the federation account.

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