Kehinde Fajobi
The Office of the Auditor-General for the Federation has revealed financial irregularities amounting to ₦514 billion in the Nigerian National Petroleum Company Limited (NNPCL) for the 2021 financial year.
These alleged infractions, detailed in a 2021 audit report, include unauthorised deductions and mismanagement of federation revenue, sparking concerns over transparency and accountability.
The report highlights four major issues: irregular deductions of ₦343.64 billion from domestic crude sales, unauthorised deductions of ₦82.95 billion for refinery rehabilitation, warehousing ₦83.66 billion in a sinking fund account instead of the Federation Account, and unsubstantiated payments of ₦3.75 billion as shortfalls from petrol sales.
“Audit observed from the review of NNPC SAP payment records for March and May 2021 that ₦484.73 billion was generated from domestic crude sales, but ₦343.64 billion was deducted without providing detailed cost components for audit review,” the report stated.
The audit also revealed that ₦82.95 billion was deducted for refinery rehabilitation without evidence of authorisation.
“This amount deducted at source for purported refinery rehabilitation was not supported with evidence of authorisation and approvals,” it noted.
Furthermore, ₦83.66 billion in miscellaneous income from joint venture operations between 2016 and 2020 was deposited into a sinking fund account rather than the Federation Account, forcing the government to resort to borrowing.
The audit flagged the payment of ₦3.75 billion as a shortfall for petrol sales without clear documentation.
“Details of the transaction between NNPC, PPMC, and the company that gave rise to this payment were not availed for audit,” the report noted.
The Auditor-General attributed these anomalies to weaknesses in NNPCL’s internal control systems.
The report called on the NNPCL Group Chief Executive Officer to provide explanations to the Public Accounts Committees of the National Assembly or face sanctions for gross misconduct as outlined in Nigeria’s Financial Regulations.
The findings come amid reports that the Federal Government recorded a revenue shortfall of ₦2 trillion in the same period, with actual revenue standing at ₦4.64 trillion against a projection of ₦6.64 trillion.