- The sheer scale of the grand larceny often dwarfs whatever malfeasance and criminality other groups of unscrupulous civil servants and avaricious vested interests in other areas of governance and sectors of the economy are perpetrating
It will not be out of place to say no government agency, ministry or department has been dogged by corruption allegations like the Nigerian National Petroleum Company Limited (NNPCL). The sheer scale of the grand larceny often dwarfs whatever malfeasance and criminality other groups of unscrupulous civil servants and avaricious vested interests in other areas of governance and sectors of the economy are perpetrating. Every leadership of the state-owned oil company has been enmeshed in a scandal or another.
On Thursday, the Senate Committee on Public Accounts raised the alarm over discrepancies involving trillions of naira in the audited financial statements of the Nigerian National Petroleum Company Limited (NNPCL), describing the revelations as mind-blowing and troubling.
At the investigative session on Wednesday, the committee claimed to have uncovered an absence of comprehensive and detailed records justifying massive legal and auditing fees, as well as disparities in receivables reportedly worth over N210 trillion between 2017 and 2023. The Chief Financial Officer, Dapo Segun, of NNPCL, appeared before the committee
The panel said, “Legal fees were accrued without any explanation or documentation regarding the legal services rendered. The auditors’ fees raise similar questions. There are no clear justifications. Everything we’ve seen and heard from the audited financial statements is troubling.”
Senator Wadada further stated that the main concern is with the receivables
“Trillions of naira are in question, and the new document they presented this afternoon doesn’t match what’s already in their audited report. It’s completely independent and contradictory,” he said.
The committee stated that the concerns emanated directly from the analysis of NNPC’s audited financial statements spanning 2017 to 2023, not speculation. The committee gave a list of 11 queries to NNPC’s finance team and gave them one week to return with answers.
Is there truly a discrepancy of N210 trillion?
Let’s crunch the numbers and separate conjecture from fact.
Senator Wadada claimed the accrued expenses for the NNPCL during the period under review are ₦103 trillion while the receivable was ₦107 trillion.
What do accrued expenses and receivables mean?
Accrued expenses are the amount NNPC owes, while receivable is the amount other entities owe the NNPC. In this case, NNPC owes ₦103 trillion, while other entities owe it ₦107 trillion.
The ideal thing for the senator to do is to subtract the payable (accrued expenses) from the receivable: ₦107 trillion minus ₦103 trillion equals a net receivable of ₦4 trillion. Which is still a huge figure.
What the senator did was to sum the absolute values which is misleading in this case. You don’t add what you’re owing and what you’re being owed. You net off
Verdict.
The discrepancy in the NNPC audited financials is ₦4 trillion and not N210 trillion, as Senator Wadada purported.
Senator Wadada’s statement showed a lack of basic accounting knowledge, which is not something you can castigate him for, as he is clearly not a trained accountant. But one need not have a background in accounting to avoid this kind of blunder, one just needs to ask the right questions and speak to experts before publicly stating one’s position.
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