By Nathaniel Zaccheaus, Abuja
The Senate Public Accounts Committee, chaired by Senator Ibrahim Dankwambo, on Wednesday gave the external auditors of the Nigerian National Petroleum Company Limited (NNPC Ltd.) one week to provide a detailed breakdown of over ₦210 trillion recorded in the company’s audited financial statements, but which lawmakers said remained unexplained.
The committee insisted that the auditors, having signed off on the company’s accounts, must produce the schedules and working papers supporting the figures rather than refer lawmakers back to NNPC Ltd.
The controversy centred on two major balance sheet entries in the audited financial statements. These are approximately ₦107 trillion classified as receivables and ₦103 trillion recorded as payables.
The senators said the amounts had not been adequately explained despite repeated engagements with the national oil company.
When asked to provide the 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 need about two weeks to retrieve them.
The response immediately drew strong objections from committee members.
Chairman of the committee, Senator Ibrahim Dankwambo, questioned why the 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 recalled that during an earlier appearance before the committee, it had been agreed that NNPC officials would provide explanations on the figures contained in the accounts.
That position, however, was rejected by members of the committee.
Senator Abdul Ningi cited Sections 88 and 89 of the 1999 Constitution (as amended), stressing that the National Assembly possesses extensive investigative powers to summon any individual or organisation and compel the production of documents relevant to an investigation.
“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,” the senator said.
Lawmakers maintained that the auditors were appearing before the committee in their own capacity and were individually responsible for defending the audit opinions they had issued on the NNPC financial statements.
Senator Adams Oshiomhole reminded the auditors that the figures currently generating nationwide public concern originated from the audit work they had carried out.
“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.”
Another senator questioned whether the audit exercise had been properly conducted.
He said, “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. We believe 48 hours should even be sufficient, but certainly not an indefinite period.”
The committee also faulted the continued inability of both NNPC Ltd. and its auditors to reconcile the receivables and payables.
Dankwambo observed that NNPC officials had consistently claimed that the figures were largely related to joint venture cash calls and payments, but had failed to identify the individual transactions or counterparties involved.
According to him, if both entries are genuinely related to the same transactions, they ought to be reconciled and netted off.
He said, “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.”
Several lawmakers also took issue with the auditors’ reference to confidentiality obligations owed to their client.
Senator Oshiomhole argued that NNPC Ltd., being wholly owned by the Federal Government on behalf of Nigerians, could not invoke commercial secrecy to deny Parliament the information required for constitutional oversight.
He said, “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.”
Senator Babangida Useni added that neither professional ethics nor confidentiality agreements could override the investigative powers vested in the National Assembly.
He further reminded the auditors that the committee’s Standing Orders expressly empower it to summon any person, demand documents and examine the accounts of government-owned corporations.
Drawing from international experience, Dankwambo warned the auditors of the consequences of failing to defend audited financial statements, citing the collapse of Arthur Andersen following the Enron scandal as an example of the reputational risks associated with audit failures.
The committee ultimately directed the auditors to submit, within one week, a comprehensive schedule identifying every component of the ₦107 trillion receivables and ₦103 trillion payables.
The submission is expected to include detailed supporting schedules showing the composition of each figure and the basis on which it was certified in the audited financial statements.
Before adjourning the hearing, Senator Dankwambo clarified that the committee had never alleged that the funds were missing.
“We have never said the money is missing,” he said. “What we have consistently maintained is that these figures remain unexplained.
One represents receivables, and the other represents payables.
“Because neither has been adequately explained, the committee refers to the combined amount of about ₦210 trillion as unexplained. That is the issue before us.”
The committee thereafter discharged the auditors and directed them to return within one week with the requested documentation.
