The Senate has given the external auditors of the Nigerian National Petroleum Company Limited (NNPC Ltd.) a one-week ultimatum to provide a detailed breakdown of over ₦210 trillion recorded in the company’s audited financial statements, which lawmakers said remained unexplained.
The Senate said the auditors, having signed off on the company’s accounts, must produce the schedules and working papers supporting the figures instead of referring lawmakers back to NNPC Ltd, reports Vanguard.
The ultimatum was issued today by the Senator Ibrahim Dankwambo-led Senate Committee on Public Accounts.
The controversy centred on two major balance sheet entries in NNPC Ltd.’s audited financial statements — approximately ₦107 trillion classified as receivables and ₦103 trillion recorded as payables — which senators said had not been adequately explained despite repeated engagements with the national oil company.
The issue arose during the committee’s proceedings when members requested that the company provide detailed schedules supporting the figures. Representatives of the external audit firm informed the committee that the documents formed part of their working papers and requested additional time, saying they might require about two weeks to retrieve them.
Members of the committee, however, objected to the explanation.
Senator Dankwambo questioned why auditors were unable to produce documents backing figures they had already certified.
“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.
The auditors explained that under professional practice, NNPC Ltd. remained their principal and that explanations relating to the figures should ordinarily come from the company.
They also recalled that during an earlier appearance before the committee, it was agreed that NNPC officials would provide explanations on the figures contained in the accounts.
The position, however, was rejected by members of the committee.
Senator Abdul Ningi (PDP, Bauchi Central), who cited Sections 88 and 89 of the 1999 Constitution (as amended), said the National Assembly has extensive investigative powers to summon any individual or organisation and compel the production of documents relevant to an inquiry.
“The Constitution empowers this committee to invite any person and request any document necessary for our investigation. You are before this committee as independent auditors. Do not tell us you must first seek permission from your client before complying with the lawful request of Parliament,” Ningi said.
Lawmakers maintained that the auditors appeared before the committee in their own capacity and were individually responsible for defending the audit opinions they issued on NNPC Ltd.’s financial statements.
Senator Adams Oshiomhole (APC, Edo North) reminded the auditors that the figures generating public concern originated from the audit work they conducted.
Oshiomhole argued that NNPC Ltd., being wholly owned by the Federal Government on behalf of Nigerians, could not rely on commercial secrecy to deny Parliament information required for constitutional oversight.
“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,” he said.
He added: “The alarms were raised because of the work you people performed. These figures came from your audit. Therefore, you cannot tell this committee that you must consult your principal before responding. You are responsible for your audit work and must answer questions arising from it.”
Senator Babangida Useni also argued that professional ethics and confidentiality agreements could not override the investigative powers vested in the National Assembly.
He reminded the auditors that the committee’s Standing Orders empowered it to summon individuals, demand documents and examine the accounts of government-owned corporations.
“If you cannot produce the detailed schedules supporting these figures, then it raises serious questions about whether the audit work was actually done. If it was done, the supporting documentation should already exist,” Useni said.
The committee also faulted the continued inability of NNPC Ltd. and its auditors to reconcile the receivables and payables.
In his remarks, Senator Dankwambo observed that NNPC officials had consistently claimed the figures largely related to joint venture cash calls and payments but had failed to identify the individual transactions or counterparties involved.
He said if both entries genuinely related to the same transactions, they ought to be reconciled and netted off.
“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.
“The inability to identify the components of both figures is precisely why this committee considers the combined amount of over ₦210 trillion as unexplained.
“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.
Several lawmakers also criticised the auditors’ reference to confidentiality obligations owed to their client.
The committee subsequently discharged the auditors and directed them to return within one week with the requested documentation.
