Contrary to the testimony made last week by the Auditor-General for the Federation (AuGF), Mr. Samuel Ukura, before the House of Representatives’ Committee on Public Accounts that it had commenced the audit of the Nigerian National Petroleum Corporation (NNPC), his office has in another breadth disclosed that it is not empowered to audit the oil corporation.
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Appearing before the House committee to defend its 2013 and 2014 budget, the auditor-general had said 20 auditors involved in the audit were recently exposed to a specialised training programme designed to help them adequately examine oil and gas financial documents and audit NNPC’s accounts.
However, responding to a “Request for Audit of the Federation Account” by civil rights lawyer and Senior Advocate of Nigeria (SAN), Mr. Femi Falana, the Legal Unit of the Office of the Auditor-General of the Federation (OAuGF) stated that Section 85(3) of the constitution does not empower it to “audit the accounts of or appoint auditors for government statutory corporations, commissions, authorities, agencies, including all persons and bodies established by the Act of the National Assembly”.
In the letter dated February 19, 2014, Mr. Okafor-Agbi Uche, who signed on behalf of the Auditor-General, said the constitution only empowers it to provide the NNPC and other similar bodies with a list of auditors qualified to be appointed as external auditors and from which the bodies shall appoint their external auditors.
OAuGF said there have been some “ethical and professional threats working against the capability of the OAuGF to carry out its Supreme Audit Institutional (SAI) mandates, for which an Audit Bill has been before the National Assembly.”
“It is hoped that once the Audit Bill is passed into law, these threats shall be mitigated by proper repositioning of the OAuGF to carry out the audit of these institutions,” Uche wrote in the letter on behalf of the AuGF.
Falana had in a letter dated February 7, 2014, requested an audit of the Federation Account, citing the disagreement between the suspended Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, and NNPC over unaccounted for oil revenue.
In the letter, which was obtained by THISDAY, Falana noted that Sanusi had raised the alarm that the NNPC failed to remit $49.8 billion to the Federation Account, stressing that after reconciliation, both parties agreed that the figure was $10.8 billion.
The letter however stated that while the NNPC said the $10.8 billion was not missing but was used for subsidy and pipeline repairs, Sanusi later changed the missing figure to $12 billion and finally to $20 billion.
Falana recalled that during mass protests against the removal of fuel subsidy in 2012, Sanusi had disclosed that N1.3 trillion was spent on subsidy payments but when one of his deputies at the CBN appeared before the Lawan Farouk-led House of Representatives’ Committee, he disclosed that subsidy payments had gulped N1.6 trillion.
He further told OAuGF that after the various subsidy probes, it was discovered that N2.3 trillion was actually spent on subsidy payments, contrary to the submissions by the CBN.
Falana stated that it was obvious that the CBN, which keeps the Federation Account, could not produce a reliable statement of the account and urged the OAuGF to audit the account.
“Since neither the Finance Minister nor the Finance Committee of the Senate is empowered to reconcile conflicting figures pertaining to the finances of the government, we request you to audit the Federation Account in line with Section 85 of the constitution,” Falana said.
He stressed that “unless the audit is carried out without further delay, the CBN and the NNPC will continue to make claims and counter-claims on the state of the economy, to the embarrassment of the nation.”
Falana also threatened to apply to the Federal High Court for an order of mandamus to compel the OAuGF to carry out the audit if it failed to respond to his request within two weeks of the receipt of the letter.
But in its response, the Legal Unit of the OAuGF confirmed to Falana that though Section 85(2) of the 1999 Constitution empowers it to audit the public accounts of the Federation and all offices and courts of the Federation, Section 85(3) states that “nothing in Subsection (2) of this Section shall be construed as authorising the Auditor-General to audit the accounts of or appoint auditors for Government Statutory Corporations, Commissions, Authorities, Agencies, including all persons and bodies established by the Act of the National Assembly”.
The letter noted that Section 85(3) states that the Auditor-General shall only “(a) provide such bodies with (i) a list of auditors qualified by them to be appointed as external auditors and from which the bodies shall appoint their external auditors.”
“(ii) guidelines on the level of fees to be paid to the external auditors and (b) comment on the annual accounts and auditors’ reports thereon,”