……….”We are not saying the money is missing; we are saying the figures remain unexplained.”
Senate Public Accounts Committee on Wednesday issued a one-week ultimatum to the external auditors of the Nigerian National Petroleum Company Limited (NNPC Ltd.) to provide a comprehensive breakdown of more than N210 trillion recorded in the company’s audited financial statements but which lawmakers say remains unexplained.
The committee, chaired by Senator Ibrahim Dankwambo (Gombe North), insisted that the auditors must produce the schedules, working papers and supporting documents used in certifying the figures, stressing that they could not distance themselves from financial statements they had signed off on.
At the centre of the investigation are two major entries in NNPC Ltd.’s audited accounts: about N107 trillion classified as receivables and another N103 trillion recorded as payables. Lawmakers expressed concern that despite several engagements with the national oil company, neither NNPC Ltd. nor its auditors had been able to provide a satisfactory explanation for the massive figures.
Representatives of the external audit firm told the committee that the documents requested formed part of their working papers and asked for about two weeks to retrieve and present them. They argued that under professional practice, NNPC Ltd. remained their client and that explanations regarding the figures should ordinarily come from the company.
The explanation was immediately rejected by members of the committee, who maintained that once auditors certify financial statements, they must be prepared to defend every figure contained in them.
Questioning the auditors, Dankwambo said there was no justification for seeking additional time to produce documents supporting figures they had already endorsed.
“When you have figures in the financial statements, there must be supporting schedules showing how those figures were arrived at. If you already have them in your working papers, why do you need to go back before presenting them to this committee?” he asked.
Senator Abdul Ningi (Bauchi Central) reminded the auditors that Sections 88 and 89 of the 1999 Constitution empower the National Assembly to summon individuals and organisations and compel the production of documents required for legislative investigations.
Former Edo State Governor and Senator representing Edo North, Adams Oshiomhole, also faulted the auditors’ position, stressing that the figures now attracting nationwide attention originated from the audit exercise they carried out.
He dismissed claims of confidentiality between the auditors and NNPC Ltd., insisting that Parliament had every constitutional right to scrutinise the accounts of a company wholly owned by the Federal Government.
“NNPC is not a private family business. It belongs to the Nigerian people. We represent those people, and we are entitled to know how every kobo is accounted for. There can be no secrecy between an auditor and a wholly government-owned company when Parliament is carrying out a constitutional investigation,” Oshiomhole declared.
The committee also criticised the continued inability of both NNPC Ltd. and its auditors to reconcile the receivables and payables, despite previous explanations that the amounts were largely related to joint venture cash calls and payments.
Dankwambo said if the figures genuinely arose from joint venture transactions, the company should be able to clearly identify the counterparties involved and reconcile both entries accordingly.
“We have repeatedly been told these amounts relate to joint venture cash calls and joint venture payments. If that is the case, the company should be able to identify whose receivables and whose payables they are and reconcile them accordingly.
“We are not saying the money is missing. We are saying the figures remain unexplained. For amounts of this magnitude to remain unreconciled in audited financial statements is deeply concerning,” he said.
Drawing lessons from global corporate failures, Dankwambo warned the auditors of the reputational consequences of failing to defend audited financial statements, citing the collapse of Arthur Andersen after the Enron scandal as an example of what can happen when auditors fail to uphold professional standards.
At the end of the session, the committee directed the external auditors to return within one week with a detailed schedule identifying every component of the N107 trillion receivables and N103 trillion payables, including all supporting documents and the basis upon which the figures were certified in NNPC Ltd.’s audited financial statements.
The committee maintained that the documents would be critical in determining whether the transactions were properly accounted for and ensuring transparency in the management of public resources.
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