KPMG Audit Exposes Government Agencies Underpaying Their Revenue Into Federation Account
The National Economic Council (NEC) has asked the the Nigerian National Petroleum Corporation, (NNPC) and 16 other revenue generating Agencies including the Nigeria Customs Service and Nigerian Ports Authority to refund unpaid N526billion and $21billion.
Other agencies to refund the money include Federal Inland revenue Service, FIRS; Nigerian Maritime Administration and Safety Agency, NIMASA; Nigerian Communications Commission, NCC; Central Bank of Nigeria, CBN; Department of Petroleum Resources, DPR among several.
Briefing State House correspondents after the NEC at the Council Chambers, State House, the Gombe State Governor, Ibrahim Dankwanbo, who also chaired the NEC’s ad-hoc technical committee on the probe, said the Council adopted the report and resolved to refer those found culpable in the underpayments to the Attorney-General of the Federation for prosecution.
According to him: “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.
“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.”
The Ad-hoc Committee, which also has Governors of Edo, Kaduna, Akwa Ibom, and Lagos States as well as the Finance Minister, as members, further recommended a refund of the amounts under-paid by the defaulting agencies.
Dankwanbo added that “one of the resolutions of NEC today is to extend the audit to June 2017. So the audit will continue for the remaining agencies: 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.
“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.”
The NEC also heard that the balance in the Excess Crude Account (ECA) as at May 14, 2018 stands at $1.803 billion; the Stabilization Account as at May 14, 2018 stands at N15.72 billion; and the current balance in the Natural Resources Development Fund as at May 14, 2018 stands at N116.10 billion.
Also briefing, the Governor of Zamfara State, Abdulaziz Yari, disclosed that the suspicious subsidy payments by the NNPC was also discussed during the meeting but that it was referred back to the sub-committee on remittances, which he chairs.
Yari said, “Yes, the item was brought up for discussion but it was referred back to the sub-committee 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 is because the oil prices were too low. It was easy for everyone to get fuel into the country and then make its profit.
“So, when the price started jacking up then the marketers started adjusting back because they need 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 the position that either the governors take responsibility for the subsidy in their states based on their 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 programme 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 and we must look into it: who is benefiting from it.
“By next meeting (May or June), we will definitely come up with a position of the government at both levels of volume of what is being brought into the country and what the state and federal government collaborate to check”, he stated.