The Auditor-General of the Federation has accused the Nigerian National Petroleum Company Limited (NNPCL) of failing to account for £14.3 million spent on its London office in 2021. The allegation is contained in the Auditor-General’s 2022 report, which highlighted interim audit observations requiring explanations from NNPCL.

Key Findings

• Audit officials could not verify the expenditures due to lack of supporting documentation.
• The transaction was said to contravene several Financial Regulations (FR) 2009 provisions:
  • Paragraph 112: Mandates accounting officers to ensure security and accountability of public funds.
  • Paragraph 415: Requires expenditure to follow due economy.
  • Paragraph 603(1): Demands detailed vouchers supported by invoices and purchase orders.
• The Auditor-General warned that weak internal controls at NNPCL risked diversion and misappropriation of public funds.

NNPCL Response

• NNPCL claimed the London office operates as a service unit with an approved annual budget and maintains detailed records of personnel costs, fixed contracts, and operational expenses.
• The company argued that without specific transaction references, providing detailed evidence was challenging.
• NNPCL reaffirmed commitment to strengthening internal controls.

Auditor-General’s Rejection

• The explanations were deemed insufficient.
• The report directed the NNPCL Group CEO to recover and remit the £14.3 million to the national treasury.
• Failure to comply could trigger sanctions under Financial Regulations 2009 for irregular payments and failure to account for public funds.

Broader Accountability Issues at NNPCL

• Audit also cited misappropriation of funds, inflated contracts, irregular payments, and failure to deduct statutory taxes, involving over $51 million between 2020 and 2021.
• Roughly N684 million was spent on abandoned projects, unexecuted contracts, and irregular procurements.
• NNPCL has a history of opacity, having not published audited accounts for 43 years until 2020.

Ongoing Investigations

• EFCC is investigating 14 NNPCL officials, including former CEOs Mele Kyari and Abubakar Yar’Adua, over an alleged $2.7 billion fraud tied to refinery rehabilitation projects in Kaduna, Warri, and Port Harcourt.
• Senate Committee on Public Accounts is probing N210 trillion allegedly unaccounted for from 2017 to 2023.
• Previous audit reports also highlighted unauthorised deductions and diversion of N514 billion.

---

NNPCL’s failure to provide transparent accounts, combined with historical mismanagement, underscores persistent governance and accountability challenges within Nigeria’s state oil sector.