From David Onuoja, Abuja
The Senate Public Accounts Committee on Wednesday, gave external auditors of the Nigerian National Petroleum Company (NNPC) Limited, one week to provide a detailed breakdown of N210 trillion in unreconciled figures in the company’s audited financial statements.
The committee insisted the auditors must account for the figures they certified and not refer lawmakers back to NNPC Ltd.
The directive follows the committee’s ongoing probe of NNPC’s accounts, which show about N107 trillion classified as receivables and N103 trillion as payables. The Senate said neither the company nor its auditors have satisfactorily reconciled the transactions behind the entries.
At Wednesday’s hearing, representatives of the audit firm told the committee that schedules supporting the disputed figures were part of their audit working papers. They requested about two weeks to retrieve the documents.
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The request drew sharp objections from lawmakers, who argued that auditors who certified the accounts should have ready access to documents supporting the figures.
Committee Chairman, Senator Ibrahim Dankwambo, asked why the auditors could not produce schedules backing figures already in audited financial statements.
“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 said.
The auditors explained that, under professional practice, NNPC Ltd. remained their client and that explanations relating to the figures should ordinarily come from the company. They recalled that during an earlier appearance, it was agreed that NNPC officials would explain the figures.
Lawmakers rejected the explanation. Senator Abdul Ningi, cited Sections 88 and 89 of the 1999 Constitution, saying the National Assembly has powers to summon individuals and compel production of documents relevant to investigations.
“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,” Ningi said.
Senator Adams Oshiomhole, reminded the auditors that the figures attracting public attention came from the audit they conducted. Another senator questioned the integrity of the audit process, saying the inability to produce supporting schedules raised doubts about whether the audit was properly done.
The committee faulted both NNPC Ltd. and its auditors for failing to reconcile the receivables and payables. Dankwambo noted that NNPC officials had repeatedly said the figures largely related to joint venture cash calls and payments but failed to identify specific transactions or counterparties.
If both balance sheet entries related to the same transactions, he said, they ought to be reconciled and offset accordingly.
Senator Babangida Useni, maintained that neither professional ethics nor confidentiality agreements could override the National Assembly’s investigative powers.
Citing international precedent, Dankwambo warned the auditors of the reputational risks of failing to defend audited statements. He referenced the collapse of Arthur Andersen after the Enron scandal as an example of audit failure consequences.
The committee directed the auditors to return within one week with a comprehensive schedule identifying every component of the N107 trillion receivables and N103 trillion payables.
