10 February 2016, Sweetcrude, Abuja — The Fiscal Responsibility Commission has blasted the Nigerian National Petroleum Corporation for failing to audit and submit copies of its audited financial statements to it since 2010 as required by the FRC Act, 2007.
The Acting Chairman of the FRC, Chief Victor Murako, who noted this in Abuja on Tuesday at a meeting to discuss various contraventions of the Act by the oil corporation, also accused the NNPC of failing to submit its quarterly revenue profiles and annual budgets since 2012.
Murako said, “The corporation has repeatedly failed to respond to correspondences, especially after the last submissions made for the 2009 financial year in July 2012. The NNPC has also failed to submit its quarterly revenue returns since 2010.
All efforts to ensure compliance through letters and phone calls proved abortive, despite the fact that two desk officers were appointed by the NNPC to liaise with the commission.
“The NNPC, however, in November 2015, responded to the request for submission of documents. This is a clear indication that the documents submitted are grossly inadequate and fall short of the compliance with the provision of the FRA 2007 and international best practices.”
He added that the last approved audited financial statement submitted by the NNPC was for the 2009 financial year. “What was submitted for 2010–2014 is a one page summary financial report extracted from the Draft Financial Statements and Management Accounts.
“It is very clear that the NNPC has not prepared and/or audited its financial statements in the last six years, which is a violation of Section 23 (3) of the FRA 2007. This section requires all scheduled corporations to prepare and publish approved annual audited financial statements not later than three months after the financial year,” Murako noted.
The FRC boss also accused the NNPC of failing to submit its Medium Term Expenditure Framework, annual budgets from 2012 to 2015, and projections of operating surpluses.
Preliminary presentation by the NNPC representatives at the meeting showed that the oil company had been making losses rather than profits.
To this end, the FRC management wanted to know how the corporation had been borrowing money to finance its deficits.
The Group General Manager, Accounts and Head of the NNPC delegation to the meeting, Mr. Mike Balami, admitted that the corporation had been in breach of the FRC Act. He, however, disclosed that the 2010 audited accounts had been prepared.
He also said that there was a new dawn at the corporation, adding that three auditors had been appointed to clear the backlog in the financial statements.
Balami also gave a deadline of September 2016 for all the financial statements to be prepared and submitted to the commission.
The two agencies agreed to meet again between March and April to review the situation.