The forensic audit report in era of economic insolvency

If not for gross fiscal indiscipline and maladministration, funds from the agencies should be enough to fund macro-economic policies and development programmes in respect of employment generation and other growth-inducing activities. These agencies have been suspected of falsifying their accounts for ulterior motives. The outcome of the recent forensic investigation into activities of the NNPC […]

If not for gross fiscal indiscipline and maladministration, funds from the agencies should be enough to fund macro-economic policies and development programmes in respect of employment generation and other growth-inducing activities.
These agencies have been suspected of falsifying their accounts for ulterior motives. The outcome of the recent forensic investigation into activities of the NNPC is not cheeringly acceptable.
The House of Representatives committee on finance, in 2012, in its report titled, “Poor Remittance of Internally Generated Revenue to the Consolidated Revenue Fund (CRF)” hinted on how some revenue generating agencies made fool of their projected revenue and their expenditures. For instance, the Nigerian National Petroleum Corporation (NNPC) in 2013 projected an operational income of N626 billion, while planning to spend N618 billion. Also, in the same year, Nigeria Ports Authority (NPA) revenue projection was N155.95 billion while its planned expenditure was N134.92 billion. It was the same story at the Federal Airports Authority of Nigeria (FAAN) which projected revenue N48.78 billion, while it planned N48.78 billion expenditure.
The trick here is a manipulation of Section 22 (1) and (2) of the 2007 Fiscal Responsibility Act which have allowed these agencies remit almost nothing to the government treasury. Section 22 (1) demands these agencies establish a ‘General Reserve Fund’ and only pay in one-fifth of their operating surplus for a year, and Section 22 (2) goes to state that the only one-fifth in question is their operating surplus, these allow the agencies to smartly push their operating surpluses close to zero so that one-fifth of close to zero surplus means close to zero amount of money to be remitted to the government treasury.
By March, 2014 the government became worried when former Governor of Central Bank of Nigeria (CBN), now Emir of Kano, Malam Muhammad Sanusi, alleged that $20 billion oil money was missing from the NNPC’s accounts and then called for investigations. A Senate probe failed to get to the roots of allegation. To this end, the Federal Government employed PriceWaterhouseCoopers, PwC Nigeria to perform forensic auditing and investigation on the operations of the Nigerian National Petroleum Corporation, NNPC. The outcome of the investigation has been made available to the public.
Mr Samuel Ukura, Auditor General of the Federation who hinted the highlights of the recommendations as ordered by the President, said the audit firm asked the Nigerian Petroleum Development Company, NPDC, the upstream subsidiary of the NNPC, to refund a total of $1.48billion (about N248.6billion) to the Federation Account for various unreconciled transactions. This revelation rebuffed the allegation by the former CBN Governor, Malam Sanusi, thereby affirm that no amount is either missing or unremitted to the Federation Account by NNPC as the corporation later claimed that the $1.48billion was never in dispute. It even stated that the delay in payment of this amount was due to reconciliation process between DPR and the NNPC.
The obvious question has become; who is the liar among Sanusi, the Government and the audit firm? For sure, the answer is best known to the government.
The Government should be upright under the present economic hardship of the nation. Financial books of other revenue generating agencies should regularly be audited as part of overall measures to plug leakages and bolster revenue. It is therefore necessary to call on regulatory bodies like Fiscal responsibility Commission, Revenue Mobilization Allocation and Fiscal Commission the Department of Petroleum Resources (DPR) and Office of the Auditor General of the Federation to redouble their efforts in their oversight functions.
Present state of the economy calls for caution and belt tightening measures. Investigations have shown that financial recklessness and inconsistency in all revenue generating establishments also contributed to the puny economy because regulatory bodies are not discharging their statutory responsibilities accordingly.
The nation is at verge of witnessing another democratic transition, the next government must be ready to vigorously work and uplift the economy by closing all revenue drainpipes. Sections of the Fiscal Responsibility act which the revenue managers have exploited should be amended. Act establishing revenue commission should reemphasize its public enlightenment and education role, especially with regard to the public as the most credible watchdog in ensuring increased monitoring of our fiscally disciplined government.  
Any forensic audit reports in this era of the economic insolvency must be seriously and sincerely carried out.
Yusuf An-Nuphawi, Wuye District, Abuja. [email protected]