The Senate Public Accounts Committee on Wednesday directed the external auditors of the Nigerian National Petroleum Company Limited to submit, within one week, a comprehensive breakdown of more than ₦210tn contained in the company’s audited financial statements, saying the figures remained insufficiently explained.
The committee insisted that the auditors must account for the financial records they certified instead of referring lawmakers back to NNPC Ltd.
The directive was issued during the committee’s ongoing probe of NNPC Ltd.’s audited accounts, as lawmakers stepped up scrutiny of the state-owned oil company over what they described as unresolved discrepancies involving about ₦107tn recorded as receivables and another ₦103tn listed as payables.
The Senate has in recent weeks challenged the massive figures contained in NNPC Ltd.’s balance sheet, insisting that despite several engagements with the company, neither NNPC Ltd. nor its external auditors had provided satisfactory explanations or reconciled the transactions underlying the entries.
At Wednesday’s hearing, representatives of the external audit firm told the committee that the detailed schedules supporting the disputed figures were contained in their audit working papers. They requested additional time to retrieve the documents, estimating that the process could take about two weeks.
The request was met with strong objections from members of the committee, who argued that auditors who certified the financial statements should have immediate access to the documents supporting the figures.
Chairman of the committee, Senator Ibrahim Dankwambo, questioned why the auditors were unable to produce the schedules backing figures already contained in the 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 asked.
The auditors argued that, in line with professional standards, NNPC Ltd. remained their client and that explanations relating to the figures should ordinarily be provided by the company.
They also recalled that during a previous appearance before the committee, it had been agreed that officials of NNPC Ltd. would explain the figures contained in the audited financial statements.
The explanation, however, did not satisfy the lawmakers. Citing Sections 88 and 89 of the 1999 Constitution, Senator Abdul Ningi maintained that the National Assembly has broad investigative powers to summon individuals and organisations and compel the production of documents relevant to its inquiries.
“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 insisted that the auditors were appearing before the committee in their professional capacity and were therefore individually accountable for defending the audit opinions they had issued on NNPC Ltd.’s financial statements.
Senator Adams Oshiomhole reminded the auditors that the figures now drawing widespread public attention were derived from the audit they conducted and certified.
“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,” he said.
The committee also criticised the continued failure of both NNPC Ltd. and its external auditors to reconcile the receivables and payables recorded in the audited financial statements.
