An account reconciliation activity
for crude oil transactions found gaps in the corporation’s reporting and
remittances to the Federation Account for the month of October 2017.
by Mathias Okwe Dec 11, 2017
Full disclosure in the
administration of crude sales remains an issue at the Nigerian National
Petroleum Corporation (NNPC) despite current efforts at enthroning transparency
in the conduct of government business.
An account reconciliation activity
for crude oil transactions found gaps in the corporation’s reporting and
remittances to the Federation Account for the month of October 2017.
State governments had boycotted the
Federation Account Allocation Committee (FAAC) meeting on November 23, accusing
the NNPC of cutting corners in reporting and remitting of receipts from oil in
the period under review. The states insisted on thorough collation and
reconciliation through representatives agreed upon by all the parties.
The ensuing investigation and
reconciliation uncovered the sum of N58.369 billion in unremitted funds and
forced the state-owned company to issue fresh payment mandates to the Central
Bank of Nigeria (CBN) to fund the Federation Account as well as the joint
venture production (JVP) Account by the same amount.
The Guardian learnt that N30 billion
of the N58.369 billion meant for remittance was allegedly withheld, as it could
not be traced in the Federation Account.
The Federation Account payment
mandate directive to the CBN carries the value of N58.369 billion for the
October 2017 crude oil receipts, while the payment mandate directive for the
JVP cash call funding for October 2017 has a value of N29.985 billion.
The October FAAC meeting finally
held on Thursday, December 7, 2017, after the revenue figures were reconciled
and the NNPC made full remittance into the Federation Account.
This additional N30 billion revenue
available for distribution to the three tiers of government in the following
order: Federal Government, N13.749 billion; states, N6.973 billion; local
councils, N5.376 billion and oil mineral producing states, N3.9 billion.
According to Mr. Mahmoud Yunusa, who
chairs a body of commissioners of finance from the 36 states and Abuja, the new
trend (under-reporting of oil revenue by the NNPC) will force states to be
actively involved in collation and preparation of NNPC revenue account to
prevent a recurrence. Yunusa said the states would engage “sit-in” consultants
who will liaise with the NNPC to collate and reconcile revenue figures on
monthly basis.
A similar incident had occurred
during the administration of the late former president, Umaru Musa Yar’Adua’s
which led to a forensic audit discovery of N450 billion in under-reporting and
non-remittance to the Federation Account. It was agreed at the time that the
repayment process, which was only concluded three months ago, should be made on
an installment basis.
But Mr. Ndu Ughmadu, the Group
General Manager of Public Affairs Division (GGM PAD) at the NNPC, would neither
confirm nor deny if there were non-remittances, since, according to him, “it
has to do with financials.” He promised to cross- check the facts.
The NNPC spokesman said he was not
aware that that states boycotted the November 23 FAAC meeting. Instead, he
explained that the meeting could not hold because there was a directive by the
National Council of State for a reconciliation of the NNPC Account. The
directive, he said, was given because there were “some contestations” from some
stakeholders (the states).
Ughamadu added: “The FAAC was not
boycotted. There were issues relating to the interpretation of data presented
by the NNPC, and the National Council of State directed that all stakeholders
should jointly look into the Account.
“I cannot comment on the claimed N30
billion additional remittances into the Federation Account because that has to
do with financials and there is no way I can verify it right now because today
is Sunday; I will have to find out.”
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