Alleged Missing Funds: Senate Committee Report that Put the Record Straight

0 0
Spread the love
Read Time:11 Minute, 9 Second
After six months of anxiety, the Senate Committee on Finance submitted its report on allegations of missing funds by the suspended Governor of Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, against the Nigeria National Petroleum Corporation (NNPC). Although the report did not totally give NNPC a clean bill of health, it portrayed Sanusi as merely thriving on falsehood by deliberately misleading the nation. Omololu Ogunmade writes
 
For Malam Sanusi Lamido Sanusi, the suspended Governor of Central Bank of Nigeria (CBN), the report of Senate Committee on Finance which probed his allegations of missing funds, was a major blow. The most controversial CBN governor so far, heated the polity like a furnace until his suspension on February 20, 2014, following a weighty letter he wrote to President Goodluck Jonathan in September last year, alleging that a whopping $49.8 billion was missing from the account of the Nigeria National Petroleum Corporation (NNPC) domiciled with CBN.
According to him, whereas the value of crude oil lifted from the federation account between January 2012 and July 2013 was $65 billion, only $15 billion was paid into the federation account. This implied that about $50 billion was missing from the federation account.
 
 
This allegation heated the polity beyond measure as it soon became a veritable instrument in the hands of the opposition politicians who took on the President over the allegation. For instance, shortly after the allegation was published, the All Progressives Congress (APC) caucus in the Senate quickly assembled its members and without waiting for the commencement of any investigation, the senators had already drawn a conclusion. According to them, since the allegation emanated from CBN, the custodian of federal government’s money, it must be true after all.
 
 
However, the report submitted by the Senator Ahmed Makarfi-led committee on Wednesday established that there was no missing fund after all. The committee had been mandated by the Senate on December 11, 2013, following a matter of urgent national importance raised by Senator Olubunmi Adetumbi (Ekiti North) during which he drew Senate’s attention to a newspaper report on the alleged missing funds. The parliament also asked the committee to investigate the allegation of N700 million subsidy payment by NNPC on kerosene daily. The latter mandate followed a motion by Senator Babajide Omoworare (Osun East).
 
 
This twin mandates led to a series of public hearings organised by the committee. At the opening of such hearings on December 18, indications that Sanusi’s allegation might be a mere assumption emerged when he submitted that it was actually $12 billion that was missing and not $49.8 billion as earlier claimed. This attitude was in contrast with beliefs that a person who occupied an office of that magnitude must have ascertained his facts before making such allegation.
The audience was shocked by this volte face. But it was more shocking when on that same day, Sanusi agreed with the Minister of Finance, Dr. Ngozi Okonjo-Iweala, that the claim of missing $12 billion was also not correct but rather, it was $10.8 billion that was yet to be accounted for.
 
 
Yet, these contradictions would not be the last as Sanusi, on February 4, 2014, seemingly seeking to redeem his image, got the audience confused even more at another public hearing when he came up with a new figure, alleging that unlike his submission at the last hearing, it was no longer $10.8 billion that was missing but this time, $20 billion.
According to him, NNPC had shipped $67 billion worth of crude oil and remitted only $47 billion into the federation account between January 2012 and December 2013. Against this background, he insisted that the corporation was yet to account for the balance of $20 billion. Furthermore, he claimed that only $14 billion directly came into the federation account out of the total $67 billion in addition to the $15 billion, he claimed, that NNPC paid to Federal Inland Revenue Service (FIRS).
 
 
With Sanusi simultaneously approbating and reprobating, the original mandate of the Makarfi committee shifted from the probe of $49.8 billion to $20 billion. It is worthy of note that from the take off of the public hearing, it had been established that between January 2012 and July 2013, NNPC had remitted $47 billion into the federation account. Breakdown of the remittances as submitted by CBN before the committee was $14 billion as payment on equity crude; $15 billion as payment to FIRS by international oil companies (IOCs) as the value of crude lifted by NNPC on behalf of FIRS; $16 billion as domestic crude and $2 billion royalty payments to Department of Petroleum Resources by IOCs. While CBN claimed that it was $15 billion that was remitted to FIRS by NNPC, FIRS established that NNPC actually paid $16 billion to it. The committee confirmed the latter.
 
 
The fresh allegation by Sanusi compelled the committee to assemble all stakeholders including the Attorney General of the Federation, Mohammed Adoke, Auditor General of the Federation, Sam Ukura, NNPC’s subsidiary, Nigeria Petroleum Development Company (NPDC), besides ministers of finance and petroleum, CBN, NNPC and third party agents.
However, in its 73-page report, the committee submitted that it could not reconcile how the suspended governor of CBN arrived at the alleged missing $49.8 billion.
“The committee could not see how the figure of $49.8 billion was arrived at by the CBN governor for instance,” adding: “There was never any unremitted $49.8 billion.”
 
 
Further, it said: “The CBN governor at the first hearing had put forward the figure of $12 billion as monies to be reconciled and changed his position to $20 billion at subsequent hearing. At the conclusion of his written submission, he posited that it could be $20 billion, $10.8 billion or anything in between,” it said.
On the alleged unremitted $20 billion, the committee however, said it found that the sum of$218.0 million considered as federation account share of the third party financing was still in dispute and therefore should be remitted by NNPC.
It also noted that another sum of $447.8 million which it described as the federation account share from the $6.815 billion liftings by NNPC on behalf of NPDC remained in dispute.
Also in dispute according to the report is $262 million which the committee described as expenses incurred by the NNPC in respect of holding strategic reserve pipeline maintenance and management cost/capital expenditure.
The committee therefore asked the corporation to refund this sum of $262 million into the federation account, saying NNPC could not satisfactorily defend it.
 
 
“Gross lifting under the third party financing was $2,430,750,973 out of which share for the federation account was $1,588,242,004. The AGF confirmed and gave documentary evidence showing the sum of $1,370,172,650.36 was remitted to the federation account. Therefore, NNPC should remit the balance of $218,069, 354.32 to the federation,” the committee said.
The report also said the total kerosene subsidy paid by NNPC but not appropriated for by the National Assembly between 2012 and 2013 was $4.430 billion adding however, that the amount may exceed this figure because certification by Petroleum Product Pricing Regulatory Agency (PPPRA) for the period was interim.
On the expenditure incurred by the corporation on subsidy which was not captured by the Appropriation Act, the committee advised President Goodluck Jonathan to prepare and present to the National Assembly supplementary budget “to cover the expenditure in the sum of N90.6 billion for PMS (premium motor spirit) subsidy 2012 and the sum of N685.910 billion for kerosene subsidy expended without appropriation by the National Assembly.”
 
 
The committee however, knocked the Ministry of Finance, CBN and the NNPC for what it described as lack of co-ordination in record keeping with regard to crude oil proceeds’ remittances.
“There is lack of proper and adequate co-ordination between key agencies of government such as Ministry of Finance, Ministry of Petroleum Resources, Central Bank of Nigeria, NNPC, DPR, FIRS etc. Ordinarily, reconciliations on regular basis between sensitive institutions controlling our economy should be an ongoing and common practice.
“The problem of non-remittance of revenues by NNPC was not new and it was not the Central Bank of Nigeria Governor that first disclosed it. It has been a reoccurring issue at monthly Federation Account Allocation Committee (FAAC) meetings sometimes leading to state commissioners of finance walking out of meetings,” the report said.
 
 
Not done yet, the committee proceeded to slam the NNPC over what it described as its poor attitude on record keeping as well as perceived lackadaisical attitude to work resulting from its perceived failure to make returns to the federation account on monthly basis as the case should be. According to the committee, it was this carefree attitude that created the problem which deceived Sanusi into making false allegation before investigation.
The committee said: “There was poor record keeping and non-challant work attitude by the NNPC by not rendering returns on subsidy claims on monthly basis from January 2012 to date which contributed largely to creation of the problem in hand.”
The committee further reported that contrary to Sanusi’s claim that NNPC was spending money illegally on fuel subsidy, the sums of N888.101 billion and N971.138 billion were actually appropriated to meet requirements for fuel subsidy in the years 2012 and 2013 respectively.
 
 
It also noted that PPPRA certified $3.3 billion equivalent of N517.7 billion as payment for subsidy for PMS between January and December 2012; $2.281 billion (N353.3 billion) as subsidy for kerosene within the same period; $1.9 billion, equivalent of N296.0 billion as subsidy for PMS between January 2013 – July 2013; $1.2 billion (N190.5 billion) as subsidy for kerosene the same period; $636.9 million for PMS and $917.4 million (N142.0 billion) for kerosene from August to December 2013.
In the same vein, the committee reported that PPPRA certified subsidy claims by independent marketers, thus: N461.0 billion ($2.9 billion) and N467.6 billion ($3.0 billion) from January to December 2013.
The committee said it further found that NNPC withheld /deducted/expended $5.254 billion (N813.8 billion) on fuel subsidy from January 2012 to July 2013 and certified by PPPRA while noting that the National Assembly appropriated N888.101 billion and N971.138 billion for fuel subsidy in 2012 and 2013 respectively. It also added that PPPRA certified another N180 billion, being the sum deducted by NNPC in 2012 in relation to payment in the fourth quarter of 2011 adding that a sum of N245. 9 billion was appropriated for fuel subsidy in 2011.
 
 
On the dispute on $2 billion third party financing lifting by NNPC, the committee which put the exact figure at $2.4 billion, added that the Accountant General of the Federation, Mr. Jonah Otunla, confirmed the remittance of $1.3 billion into the federation account. It also added that the accountant general confirmed payment of only $300 million into the federation account in December 2013, implying that NNPC had failed to remit $218.0 million into the federation account. It was this sum that it asked the corporation to remit now.
Another contentious issue from the allegation of unremitted $20 billion by Sanusi was $6 billion worth of crude oil lifted by NNPC on behalf of NPDC. Sanusi had claimed that part of the money belonged to the federation account. The committee which put the exact figure at $6.815 billion, said whereas $2.175 billion was expected to go to the federation account from the figure, FIRS only confirmed the receipt of $863 million and another $864.8 paid as royalty to DPR. The committee therefore put other royalties and taxes that NNPC failed to remit to federation account at $447.8 million. The committee therefore determined that the share of the federation from the disputed $6 billion is $2.1 75 billion.
 
 
The committee also observed that $3.512 billion certified as payment for subsidy by PPPRA from January to July 2013, which is part of the $20 billion in dispute was not appropriated for by the National Assembly.
The committee, among others, recommended that henceforth, NNPC should stop spending money without appropriation by the National Assembly. It also asked the corporation to strictly adhere to international best practices and ensure due process and diligence in its operations. It also warned PPPRA against continuous certification of subsidy payment not appropriated for by the National Assembly.
 
 
The committee also prayed the Senate to allow it to follow up all recommendations for remittances into the federation account by NNPC and to as well receive the report of audit being undertaken by auditor general of the federation. It should be noted that the report did not include the outstanding report of forensic audit on $8.76 billion that had already been certified by PPPRA.
The audit is still ongoing. It is expected that the Senate will debate the report this week.
Happy
Happy
0 %
Sad
Sad
0 %
Excited
Excited
0 %
Sleepy
Sleepy
0 %
Angry
Angry
0 %
Surprise
Surprise
0 %

Facebook Comments

Previous post Ondo: Speaker’s Election Settles Row over Mimiko’s Deputy
Next post NIGERIA: Making this Democracy Meaningful

Average Rating

5 Star
0%
4 Star
0%
3 Star
0%
2 Star
0%
1 Star
0%

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.