At least four financial violations totaling N514 billion were discovered by Nigeria’s Office of the Auditor-General for the Federation in the operations of the Nigerian National Petroleum Company Limited, or NNPCL, during the fiscal year 2021.
Our correspondent recently reported an audit report that revealed non-compliance and internal control issues in the MDAs for the 2021 fiscal year.
Unauthorized deductions of N343.64 billion from domestic crude sales at the source and the storage of N83.66 billion from the federation’s miscellaneous receipts in a sinking fund account are two examples of the violations.
Also, there are unauthorised deductions of N82.95 billion from the federation revenue for refinery rehabilitation and the unsubstantiated payment of N3.75 billion for the sale of petrol.
According to the OAuGF, the 2009 Act of Financial Regulations and the Federal Republic of Nigeria’s Constitution were broken by the NNPC’s transactions within the specified time period.
According to the report, “The audit found that the gross amount generated from the sale of domestic crude for the months of March and May 2021 was N484.73 billion after reviewing the NNPC SAP payment record for those months.”
“The sum of N343.64bn from the gross amount was unilaterally deducted from the gross domestic crude sales as NNPC Value shortfall, Strategic Stock Holding Cost, Crude Oil and Products Pipeline Losses, as well as the pipelines maintenance and management costs.
“The details of each of the cost components deducted were not provided for audit review. Hence, the reasons for the deductions could not be justified by the management.
“In the month of May, the net payable that could have been remitted ought to have been N127.075bn, but only the sum of N77.075bn was remitted, leaving an unremitted balance of N50bn to the Federation Account, which has remained unaccounted for.
“The above anomalies could be attributed to weaknesses in the internal control system at NNPC, now NNPC Ltd. This is a potential loss of Federation revenue, diversion of public funds, or misapplication or misappropriation of funds.”
The violations occurred before to NNPC’s July 2022 rebranding as Nigerian National Petroleum Company Limited, or NNPCL, in order to function as a business.
NPCL announced a N3.3 trillion net profit for the 2023 fiscal year in its 2024 Audited Financial Statement.
For the first time in forty-three years, the financial reports were made public in 2020.
