A report by the office of Nigeria’s Auditor-General indicted the state-owned oil firm of unauthorised deductions of N82.9 billion from federation revenue for refinery rehabilitation.
The NNPCL also got knocks from the report published by PremiumTimes for its “irregular deductions of funds from domestic crude sales at source,” which the auditor general said was a breach of the Nigerian Constitution and Financial Regulations (3106 and 3129) 2009 in respect of economy of expenditure.
The report recommended that the Group Chief Executive Officer of the NNPCL should “furnish reasons to the Public Accounts Committees of the National Assembly, for the unauthorised deduction of funds and to recover and remit the sum of the lost funds” to the government’s treasury.
From the review of NNPCL payment records for 2020 and 2021, the audit observed that N82.9 billion was “deducted from the sale of Crude Oil and Gas (Federation Revenue) from the 2020 and 2021 records, and a total of N82.9 billion which were deducted at source for purported Refineries Rehabilitation.”
The report said the above transactions were not supported by “evidence of authorisation and approvals before the deductions were made.”
The auditor general said the anomalies discovered in the accounts of the NNPCL could be attributed to weaknesses in its internal control system. It could also amount to misappropriation of funds, diversion of revenue meant for the federation and loss of federation revenue, the report stated.
The deductions of funds violated Section 162 (1) of the Constitution of the Federal Republic of Nigeria 1999 (as amended) which states: “The Federation shall maintain a special account to be called “the Federation Account” into which shall be paid all revenues collected by the Government of the Federation, except the proceeds from the personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or Department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja.”
Similarly, it contravenes paragraph 213(ii) of the Financial Regulations (FR), which states that “On no account shall any withdrawal be made from the revenue account other than for the purpose of transfer to the consolidated account.” In addition, paragraph 223 of the FR 2009 states, “No deductions shall be made from any revenue collections or other receipts to adjust a previous over-credit.
The gross amount received must, on all occasions, be accounted for in full. The procedure for refunds of revenue and advance payments above is prescribed in Financial Regulations 3006.” The NNPCL management did not respond to the queries and concerns raised by the auditor general. Auditors fear that the NNPCL’s actions may have resulted in the misappropriation of funds and the diversion of revenue meant for the federation.
The report then recommended that henceforth, the Group Chief Executive of NNPCL should ensure that amounts due for the “Federation Account are not subjected to any deductions before remittance of the net.”
