07 March 2014, Abuja – Chairman, Senate Committee on Finance, Senator Ahmed Makarfi, on Thursday,asked the Auditor General of the federation, Mr. Samuel Ukura, to explain in writing, details of the periodic checks which his office was conducting on the accounts of the Nigerian National Petroleum Corporation.
Specifically, Makarfi asked the auditor-general to explain whether his exercise also included the current probe of the alleged unremitted oil funds currently being carried out by the committee in the Upper chamber.
The senator gave the directive at the resumed public hearing of Senate Committee on Finance over the alleged unremitted oil funds to the federation account.
Makarfi said, “We want you to submit to this committee in writing before close on Friday, whether the periodic check you were carrying out on the NNPC accounts also included our work in the committee and whether you have the manpower to do it.”
Ukura said, “Going by the section 3 of subsection 8 (5) of the constitution, the auditor general cannot do a forensic auditing of any of the government agencies.
“According to section 4, what we are doing is a periodic check. 20 of my staff are there to do period check.we will provide the checklist. We are looking at the revenue generated and the expenditure.”
He added that 19 out of the 20-member team are chartered accountant, and that one of them is a holder of the Association of National Accountants of Nigeria.
He said, “We have the capacity based on the resources at our disposal. The team were trained by a team of chartered accountant and they are well equipped to carry out the task. The committee has the right to ask me to do what it want me to do and it will be done.”
Makarfi, said the committee will start its technical session from next week adding that the senate leadership had approved the appointment of a consultant to audit the NNPC accounts but stressed that the executive was free to conduct its own forensic audit.
Meanwhile, Makarfi had asked the Managing Director of the NNPC, Mr. Andrew Yakubu, to withdraw his presentation before the committee because of the discrepancies in the figure of the amount quoted as third party financing which he claimed was $1.3bn against the $2bn quoted by the NNPC.
Reacting to the development, Yakubu said the action would allow his agency to present detailed account to the committee.
He said, “It is good that we have this opportunity to drill down to the dynamics of these funds and that is what we have been saying all along. We cannot take it on the face values without looking at the details.
“Now we are going into detail disbursements of these money. A substantial frame has gone back to the federation account and that is what we have been saying that if we had been patient enough to go go into the details, we would be able to see them.
“Yes, we captured $2bn but we are seeing clearly in our details that it was actually $2.4bn and a substantial part of it had gone back to the federation account.
“The governance structure of the third party financing is what we will take back to see how we can have a detailed explanation to the distinguished committee to see how the third party financing governance is done.
“The escrow account system, and how it is managed from the beginning of the project to the end. When you borrow money from the bank or any financial institution, you have governance structure you will adhere to and when you have an escrow account, that means you will have some money trapped until the end of the obligation.
“These are some of the details that are beginning to come out and we have the opportunity to go back now to give a detail explanation including how the funds are being managed and then we would be able to account for every stream that is being managed within the third party financing.”
Acting Governor of the Central Bank of Nigeria, Mrs. Serah Alade, said the apex bank had yet to come up with any specific amount as the unremitted oil funds apart from its earlier position at the last sitting of the committee.
She said the bank would come up with a new figure after reconciliation, adding that, “we have not been invited for any reconciliation.”
On the issue that pertained to the $6bn meant for the Nigeria Petroleum Development Company, Alade said the bank had not determined the portion to be paid to the federation account.
She said the legal opinion would determine what part should go the federation account.
The Managing Director of the Petroleum Pricing Regulatory Agency, Mr. Faruk Ahmed, gave details of the total volume of oil sales and the amount paid as subsidy.
He said, “In 2012, the total quantity delivered by the marketers that qualifies for subsidy claims was 7,714,735,580.71 litres which corresponds to N461.40.7bn.
For 2013 (other marketers) the total volume delivered which qualified for subsidy claims was 8,997,776,652.81 litres which corresponds to N467,620,657,674.24.
“Total claims for the two years of N928,668,365,37.70. In October 2011, the total volume of PMS based on the certificate granted to NNPC in terms of volumes delivery of PMS (petrol) was 520,464,371 litres corresponding to N40,385,473,266.32.
“The volume for HHK (kerosene) 171,515,288 litres and the total Naira value for the two components (PMS and HHK) is N17,643,898,129.01. There is also one for October of the same year which is classified as October arrears and its for HHK alone. The volume is 18,240,866 litres corresponding to a value of N1,935,691.442.2.
“For December 2011 batch A, PMS in terms of volumes 960,674,907 litres corresponding to N77,006,459,517.65. For HHK December 2011 batch A, volume was 94,564,678 litres corresponding to N10,135,880,308.08. December batch B, volume delivered was 144,961,484 litres corresponding to N11,318,805,386.1.
“December batch B for HHK the volume delivered was 88,643,792 litres corresponding to N9,576,977,84.55. The total of PMS delivered in the first quarter of 2011 by the NNPC is 2,057,856,391 litres corresponding to N162,774,171,10.73 while the HHA was 504,173,658 litres corresponding to N52, 786,942,442.3.
“Therefore the total certification granted to NNPC by the PPRA for 2011 (PMS and HHK) was N215,561,113,453.03.”
– The Punch