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Shocking: NNPC failed to remit N3.2 trillion into the federation account

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NNPC GMD, Kachikwu

A monumental fraud amounting to N3.3 trillion has uncovered by the Auditor General for Federation, Samuel Ukura in some government agencies.

Out of the N3.3 trillion massive fraud, about N3.2 trillion of excess crude account was not remitted  into the federation account in 2014 according to a report submitted to the Clerk of the National Assembly, Salisu Maikasuwa.

The report also exposed fraud of N10.4billion in the National Assembly management in 2014.

ABOVE PHOTO: Present NNPC GMD, Kachikwu

According to Ukura, payments of N9.5 billion were made without raising payment vouchers at the management department which is a violation of finacial regulation 601.

“Personal advances granted to 112 staff recurrent votes and 50 members of staff General Service vote from July to December, 2014 for various purposes all amounting to N1.2 billion.

“Review of sales profile on sales of Gas to Nigeria Liquefied Natural Gas(NLNG) was not paid to the Federation Account but transferred to some undisclosed Escrow Accounts. Relevant documents were not made available for verification.”

The Nigeria State oil company, NNPC has been severally criticized for running an opaque enterprise and lacking transparency.

A 2014 Fiscal Transparency Report by US Department of State, stated that lack of transparency in the revenues and expenditures of Nigeria’s flagship oil and gas sector state-owned enterprise, the NNPC, impedes Nigeria’s overall fiscal transparency.

“While Nigeria’s budgetary process meets and in many ways exceeds many elements of the Department’s minimum requirements in budgetary areas, Nigeria does not meet the Department’s overall minimum requirements due to concerns in the natural resources sector”, the report stated.

“While the criteria for awarding natural resource extraction concessions is made public, actual practices are opaque and do not appear to always conform to the criteria. Significant off-budget spending on fuel subsidies is also of concern.

“Nigeria’s fiscal transparency would be enhanced by conducting a full audit, to international standards, of NNPC. The Petroleum Industry Bill, once implemented, could partially address the transparency concerns in the oil and gas sector. Nigeria’s fiscal transparency would be further enhanced by moving off-budget spending on budget.”

And in July last year, the All Progressives Congress, APC, called on the Federal Government to probe the whereabouts of the dividends paid to NNPC by the Nigeria Liquefied Natural Gas, NLNG.

In a statement by its National Publicity Secretary, Lai Mohammed, the ruling party said the call has become more urgent against the backdrop of published reports that the NNPC has withdrawn $1.2 billion from banks so it could place the money with the Central Bank of Nigeria, CBN.

It said the move by the NNPC is a panic reaction to the expose by the party (APC) that over $4 billion dollars are missing in past dividends paid to the NNPC by the NLNG.

”Whereas NLNG’s dividends are paid to NNPC’s account with JP Morgan, from where they are supposed to be paid into the Federation Account in accordance with the law, some unscrupulous officials of the corporation have apparently been moving such funds to local banks so they can collect huge commissions on them”, Lai Mohammed had said.

Other agencies cut in web of  fraud by the Office of Auditor General for Federation were Police Service Commission, foreign Mission, Nigeria Port Authority (NPA), Petroleum Equalisation Fund (PEF), Nigerian Prison Service, Federal Airport Authority (NPA). 

The Auditor added that total payments amounting to N73.5billion were made contrary to the established purpose of the funds.

The report reads,” The sum of N36 billion was released to the Office of the National Security Adviser for the rehabilitation and construction of Dams instead of the Federal Ministry of Water Resources.

“The Sum of N2.9billion was spent for the procurement of hand sanitizer for schools and critical public places.

The sum of N31 billion was payment of subsidy on fertiliser and youth employment in Agriculture programme.

“The sum N2.4 billion was payment for group life Assurance Premium for Armed Forces Budget in 2013 but not cash backed.

“The sum of N500 million was payment for schools Agricultural programmes.

“From examination of NNPC mandates to CBN on domestic crude Oil sales and reconciliation statement of Technical Sub-committee of Federation Allocation Committee meeting held in January 2014 amount not remitted to FAAC was N3.2 trillion.

Constitutionally, the Nigerian National Petroleum Corporation (NNPC) must hand over its oil revenue – which makes up about 70 percent of total income – and money is then paid back based on a budget approved by parliament.

According to the latest figures on OPEC’s website, Nigeria’s oil exports are worth about $77 billion a year.

In 2014, the central bank governor, Lamido Sanusi, was suspended after accusing the NNPC of failing to pay $20 billion into government accounts between January 2012 and July 2013.

Although the constitution requires NNPC to hand over its oil revenue, the act establishing the state oil company allows it to cover costs before remitting funds to the government.

Buhari, who sacked senior NNPC managers just weeks after his inauguration, has approved splitting the company into upstream, downstream, gas power marketing, refinery groups, and ventures divisions in an attempt to improve transparency.

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