KPMG report indicts NNPC, others of under-remitting into Fed account

The National Economic Council (NEC) presided over on Thursday by Vice President Yemi Osinbajo has said the final report on the forensic audit of revenue accruals by revenue generating agencies confirmed massive under-remittances to the Federation Account to the tune of N8.1 trillion.
Governor Ibrahim Dankwambo of Gombe State, while briefing State House correspondents at the end of meeting, said various Revenue Generating Agencies (RGAs) shortchanged the government of N526 billion and $21 billion between 2010 to 2015.
Dankwambo, who chaired the NEC ad hoc committee on remittances, said the infractions were identified by KPMG who were contracted by the NEC to carry out a forensic audit of revenue remittances to the Federation Accounts.
He said his committee briefed NEC on the findings and it was resolved that the audit period be extended up to June 2017.
The Gombe governor said the financial audit consultancy firm covered 18 revenue generating agencies, who were found culpable of under remittances.
The agencies audited are: the Nigerian National Petroleum Corporation, NNPC; Federal Inland Revenue Service (FIRS); Nigeria Customs Service (NCS) and Nigerian Ports Authority (NPA).
Others include Nigerian Maritime Administration and Safety Agency (NIMASA); Nigerian Communications Commission (NCC); Central Bank of Nigeria (CBN); Department of Petroleum Resources (DPR); Nigerian Petroleum Development Company (NPDC), and several others.
Dankwambo said a subcommittee will be set up to look at the details of the infringements. Those that are criminal in nature will be handed over to office of the Attorney General of the Federation(AGF) for action.
Damkwambo said, “KPMG presented the report of the technical audit of RGAs concluding that a total sum of N526 billion and USD$21 billion was under-paid to the Federation Account.
“NEC’s Ad-hoc Committee chaired by Gombe State Governor, with members including Governors of Edo, Kaduna, Akwa Ibom, Lagos and the Finance Minister, recommended refund of the amounts under-paid.
“Council adopted the presentations and reports of the KPMG and the recommendations of its Ad-hoc Committee, including a resolution to identify instances where there appears to have been criminal infringements and forward such to the Attorney-General of the Federation and the Legal Committee of the National Economic Council for further action.
“Council resolved to pursue strengthening of the NNPC governance structure to prevent further recurrence of such gross under-remittance by the NNPC and other RGAs.”
On the resolution of INEC to extend audit to June 2017, the Gombe governor said, “One of the resolutions of NEC today is to extend the audit to June 2017. So the audit will continue for the remaining agencies. It is NNOC, NPDC, DPR, Customs, Federal Internal Revenue Services, NPA, Maritime Authorities, all the revenue generating agencies, and the details of the infringement are contained in the report. Because it is a voluminous report, there are a lot of items that are there.
“The most important decision that was taken is that a sub-committee will be set up which will be an arm of the legal committee of NEC that will look into details of these kinds of infringements and make sure that those issues that are criminal and require prosecution will be handled by office of the Attorney General of the Federation.”
On if the NEC was going to mention agencies of government that have not been indicted, the governor said, “And also to say that an audit, an exception report, is not an okay report. So we are not looking for a company that is doing well. Accountability does not mean you are doing well, the mirror is very big and, depending on how you look at the mirror, that is how you will see yourself. So it is an exception report, we are not looking at the good boys – we were looking for exceptions. And to go further, it is a forensic audit, detailing this kind of short comings.”
The chairman of Nigeria Governors Forum and Zamfara State Governor Abdulaziz Yari said the NEC discussed the question of whether states are to henceforth determine how much is paid as subsidy and not NNPC, and that the final decision will be taken in the June meeting.
Yari said, “Yes, the item was brought up for discussion but it was referred back to the sub-committee on remittances in which I’m chair. We are doing the nitty-gritty with NNPC in terms of remittances. Don’t forget that the reason we got it right in 2016 on the NNPC side was because the oil prices were too low. It was easy for everyone to get fuel into the country and then make their profit. So, when the price started jacking up, then the marketers started adjusting back because they needed to have a template of cost recovery, and how they are going to make up the difference from the pump price to the landing cost of what they are importing.
“Our problem is the volume, the quantity of consumption, which is not acceptable. Working with the governors, so many decisions were taken, but by next month we are going to adopt that position either for the governors to take responsibility for the subsidy in their states based on the consumption or we look at other ways. For instance, if you say we paid N800 billion subsidy, you will ask who are we paying the subsidy to? And if you look at infrastructure development and capital programmes of the Federal Government, it is about N1.1 trillion, almost 70 percent of what you are spending developing the economy. If there is no infrastructure development then you cannot talk about development of the economy. N800 billion is a huge amount that we must look at who is benefiting from it.
“So, we are coming up with a strategy. We are going to meet in the month of May and June. By next meeting, we will definitely come up with a position of the government at both level of volume of what is being brought into the country and what the state and federal government collaborate to check.”
The Minister of Finance, Kemi Adeosun, reported to Council that the balance in the Excess Crude Account (ECA) as at May 14, 2018 stands at N1,830,682,945.30.
She also reported to Council that the current balance in the Stabilization Account as at May 14, 2018 stands at N 15,725,456,963.83.
She also reported to the Council that the current balance in the Natural Resources Development Fund as at May 14, 2018 stands at N116,104,644,763.39.
The Minister of Budget and National Planning, Udo Udoma, gave an update to council on the just concluded Economic Recovery Growth Plan (ERGP) Focus Labs which were conducted successfully, with the outcomes presented to the public on Tuesday.
He told Council members that the Labs identified 164 projects spread across the six geopolitical zones of the country. He said that the outcomes indicated that over 500,000 jobs are likely to be created by 2020, and that more Labs would be conducted in due course for other sectors, recommending that states should adopt the same model.
-Sun