Missing $22.8bn: NEITI Sanctions Auditors For Incompetence But This Is Not Enough

In the imagination of enemies and political opponents of President Goodluck Jonathan, his administration’s effort at tackling the spate of corruption in the management of the nation’s oil and gas earnings and the displayed helplessness of the various transparency and anti-graft agencies are viewed as its biggest failure. How comfortable is the President with the present situation where almost all the anti-corruption agencies under his administration- EFCC, ICPC and now NEITI are in themselves centres of questionable conducts and transactions?

Is it not embarrassing to the President and the leadership of NEITI that a forensic audit effort aimed at tracing every naira earned by this nation from oil and gas has been enmeshed in unending controversy ? The president should really sit down to ask how the nation could have spent hundreds of millions of naira to audit the oil and gas sector only to turn out what could be best described as songs of Solomon.

NEITI as part of its house cleaning exercise has blacklisted the audit firm, Sada Idris and Co. that handled the last audit exercise for what the agency described as a very untidy job and displayed gross incompetence of the firm to carry out thorough audit assessment of the complex accounting methodologies currently obtained in the nation’s oil and gas sector especially the NNPC. But this is not just enough.

In this country, we should begin to force people take responsibility of their actions as a deterrent to others who may want to toe the path of dishonour. It is not enough for NEITI to shift the entire blame to the auditing firm that worked as consultants to the agency. In the first instance, how were the auditors selected and who did the selection?  Is it that NEITI was not privy to the complex accounting standards in our petroleum supply chain to have enabled it select a firm that is well grounded in modern accounting strategies and practices? And why did NEITI not insist on the application of the best operating models so that they can do a good and at least a fairly acceptable job of the trust bestowed on them?

How can we now use figures whose originators are not even sure they are correct to begin to investigate/prosecute those who take pleasure in stealing our commonwealth and/or shortchanging all of us? You see the tragedy of the Nigerian anti-graft situation?

Imagine, just when NEITI is still grappling with the issue of the conflicting figures of the actual missing money as alleged by the whistle-blower and estranged former governor of the Central Bank (CBN), Lamido Sanusi, Taleveras Group, one of the fingered companies in the subsidy jig-saw last week described NEITI’S allegation that it under delivered 152,308,878 litres of petroleum products in 2011 as unfounded and a complete manifestation of the auditor’s absolute ignorance of the contractual agreement in the Federal Government’s crude oil swap arrangement.

NEITI in its audit report produced by Sada Idris and Co and submitted to the National Assembly accused four oil companies including Taleveras Group of under delivering 500,075,239.3 litres of petroleum products valued at $8 billion.

Now, Taleveras has come up in protest to NEITI  to say that “for the swap transaction, there is an underlying security in form of a standby letter of credit in favour of the Petroleum Products Marketing Company (PPMC), noting that if a supplier does not deliver the products, the PPMC is in a position to cash the defaulter’s Letter of credit and these letters of credit are issued in favour of PPMC by first class banks and must be bank confirmed prior to an off take of the crude, so in essence, no letter of credit (L/C),  no lifting of crude.

“As an example, the NEITI report showing 2011 under delivery of about $52 million in their table does not reflect the actual sum, as inventory warehousing cost is not applied to this figure. Balance on account of this ongoing term -deal is fully secured at all times due to the fact that there is an underlying security, always in place, by way of an active bank-issued letter of credit, which in this instance stood at $200 million, in favour of PPMC during the period stated. As at December 2013, the balance on account showed that Taleveras had over supplied in its delivery obligations, subject to reconciliation with PPMC.”

So who do we believe now? You see how bad it is?

Few weeks ago, NEITI Executive Secretary Zainab Ahmed in a 29-page presentation made before the joint House House of Representative Committee by alleged among other thing that “There is similarity in NEITI audit report and the Bernes Declaration report. The report (Bernes Declaration report) has a lot of substance in it. Transactions which sum up to $22.8 billion are off balance sheet items (not disclosed in NNPC’s Audited Financial Statements). The implication is that there may be significant contingent liabilities to the Federation that is not being disclosed”. In a common man’s language, money is missing let’s even leave the amount.

This same agency few days later literally denied all the submissions it made that Wednesday 26^th of February 2014 at the Hon Muraino-led House of Representatives joint committee of Justice, Petroleum (Upstream), and Petroleum (Downstream) that investigated the Berne Declaration allegation of fraud against the NNPC.

Rather than NEITI take responsibility for a shoddy job of auditing the revenue earning from our oil and gas sector, the organization chose to shift the blame of juggling of figures of the missing/unremitted amounts to the media on the ground that the executive secretary was wrongly reported. How long can we continue like this as a country?