Auditor-General Accuses Nigeria’s State Oil Company, NNPCL, Of Failing To Account For £14.3Million Spent On London Office
Auditor-General Accuses Nigeria’s State Oil Company, NNPCL, Of Failing To Account For £14.3Million Spent On London Office
The allegation is contained in the Auditor-General’s 2022 report, which includes interim audit observations requiring the NNPCL to provide clear explanations.
The Auditor-General of the Federation has accused the Nigerian National Petroleum Company Limited (NNPCL) of failing to account for £14.3 million spent on its London office in 2021.
The allegation is contained in the Auditor-General’s 2022 report, which includes interim audit observations requiring the NNPCL to provide clear explanations.
Although the company responded, the Auditor-General described parts of its defence as “untenable,” citing regulatory violations, weak internal controls and disregard for due process, according to PREMIUM TIMES.
According to the report, “a total of £14.3 million was expended on the London Office during the 2021 financial year.”
Audit officials reportedly said they were not provided with documents to verify how the funds were spent, nor allowed to confirm whether the expenditures complied with due process and economy as required under extant financial regulations.
The report stated that the transaction contravened several provisions of the Financial Regulations (FR) 2009.
Paragraph 112 mandates accounting officers to ensure adequate internal rules for the security and accountability of public funds, while Paragraph 415 states, “The Federal Government requires all officers responsible for expenditure to exercise due economy. Money must not be spent merely because it has been voted.”
Additionally, Paragraph 603(1) requires that all vouchers include complete details, “dates, numbers, quantities, distances and rates”, and be supported by documentation such as invoices and purchase orders.
The Auditor-General warned that the lack of transparency creates risks, including “diversion and misappropriation of public funds,” attributing the anomaly to “weaknesses in the internal control system at NNPC.”
In its response, NNPCL management insisted the London office operates as a service unit with an approved annual budget.
“The approved budget for 2021, amounting to £14.3 million, was executed in line with operational and financial requirements and accounted for in the London Office’s books of accounts,” PREMIUM TIMES quoted the company as stating.
It said the audit findings lacked specific references to transactions, arguing, “Without specific references or documentation requirements, it is challenging to provide tailored evidence or clarity of particular expenditure.”
NNPCL added that the London office keeps detailed records of personnel costs, fixed contracts and operational expenses.
The state oil firm said, “These records can be made available upon request for audit review to verify compliance with financial regulations and ensure alignment with due process and economy.”
The company also reaffirmed its commitment to strengthening internal control systems across all units.
However, the Auditor-General rejected the explanations as insufficient.
The Auditor’s report directed the NNPCL Group Chief Executive Officer to recover and remit the entire £14.3 million to the national treasury.
“Otherwise, sanctions relating to irregular payments and failure to account for public funds specified in paragraphs 3106 and 3115 of the Financial Regulations (2009) respectively, should apply,” the Auditor-General threatened.
The same audit also accused NNPCL of misappropriating funds, inflating contracts, irregular payments and failure to deduct statutory taxes. The findings relate to transactions between 2020 and 2021 and involve more than $51 million in questionable settlements.
The report further indicted the company for spending roughly N684 million on abandoned projects, unexecuted contracts and irregular procurements.
NNPCL has long been criticised for opacity, and for 43 years, the firm did not publish audited accounts until 2020, a factor analysts say contributed to persistent accountability challenges.
The Economic and Financial Crimes Commission (EFCC) is currently investigating 14 NNPCL officials, including former chief executives Mele Kyari and Abubakar Yar’Adua, over an alleged $2.7 billion fraud tied to refinery rehabilitation projects in Kaduna, Warri and Port Harcourt.
Despite receiving substantial allocations, the refineries have produced no output for years.
Separately, the Senate Committee on Public Accounts is probing NNPCL over about N210 trillion allegedly unaccounted for in its audited financial statements from 2017 to 2023.
The NNPCL management ignored four summonses before submitting a written response last week, according to PREMIUM TIMES.
Previous audit reports raised similar issues, including the Auditor-General’s 2021 report, which indicted the company for unauthorised deductions and diversion of N514 billion.
