Controversy Over NEITI Report

Fri, Aug 16, 2013

By publisher

6 MIN READ

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The Petroleum Products Pricing Regulatory Agency picks holes in the audit report submitted by NEITI on the oil and gas sector and the solid minerals sector

|  By Anayo Ezugwu  |  Aug. 26, 2013 @ 01:00 GMT

MIXED reactions have continued to trail the recent audit report of the oil and gas sector from 2009 to 2011 and the solid minerals sector from 2007 to 2010, presented by the Nigeria Extractive Industries Transparency Initiative, NEITI. The Petroleum Product Pricing Regulatory Agency, PPPRA, has accused NEITI of misinforming the public on its audit report that the PPPRA should remit N4.423 billion to the federation account.

Reginald Stanley, executive secretary, PPPRA, said that NEITI should desist from confusing Nigerians and challenged it to tell Nigerians where the N4.423 billion it claims was warehoused. “If NEITI is, indeed, desirous of efficiently doing its job, we challenge it to go and consult the records at the Central Bank of Nigeria, where the Petroleum Support Fund, PSF, account is domiciled. It should also go a step further by visiting the records at the Federal Ministry of Finance to confirm if a certain amount of money, as claimed, was remitted accordingly or not by the PPPRA. To all intents and purposes, it is apparent that NEITI is on a wild-goose chase and self-seeking in its putrid claims,” he said.

Stanley also faulted NEITI’s latest claim that, all the companies and government agencies covered by the audit including the PPPRA were fully involved and participated actively in the audit process. According to him, there was never a time the audit report was signed off by the PPPRA management, challenging NEITI to make a copy of the ‘sign-off’ public to prove its claim.

But NEITI has challenged the PPPRA, to show evidence that it remitted about N4.423 billion recovered from oil marketers as over-payment between 2008 and 2009 into the federation account. Orji Ogbonnaya Orji, director of communications, NEITI, said that the position of NEITI on the over-recovery remains that there was no evidence that the recovered fund was remitted to the federation account. Apart from the misunderstanding on the subsidy fund over-recovery, Orji also denied PPPRA’s claims that it never participated in the audit process and signed off on the report before it was made public. He said the agency duly participated in all of the meetings, including providing additional information two days before the final validation deadline.

“The attention of NEITI has once again been drawn to sustained media campaign by the management of PPPRA in a futile effort to discredit the contents of the recently released NEITI independent audit report of the oil and gas industry as it affects the agency. The NEITI report had recommended, among others that the PPPRA should remit over N4.4 billion which the agency recovered from independent marketers to the federation account as required by law. But the PPPRA, instead of availing itself of the remedial measures outlined in the report, choose to contest the findings in the media. The PPPRA challenged NEITI on two fundamental issues, that NEITI should explain the basis for its recommendations that it should refund to the federation account the sum of N4.423 billion and to provide proof that it actually participated in the audit process and, indeed, ‘signed-off’ on the report before it was released to the public,” he said.

According to him, NEITI auditors carried out a painstaking procedure of data and information verification, reconciliation and validation held at the Best Western Hotel, Victoria Island, Lagos, for a period of two weeks. This was to ensure that what the agencies and companies provided was correct. In the particular case of the PPPRA, the agency’s submissions went beyond the two week exercise in Lagos. “NEITI auditors held series of consultations, meetings and made visits all in efforts to lay to rest gaps in the submissions by the agency. When it was clear that some agencies like the PPPRA still had issues to sort out in their submissions, the NEITI board, in its wisdom, further extended the deadline by another two months. When the draft report was finally ready, it was made available to all agencies for their vetting, and more inputs where necessary. I wish to state that the PPPRA received the draft report, reviewed it, and participated in the final reconciliatory meeting. After that meeting from where all other agencies and companies signed-off, the PPPRA still came up with additional information on the 28 of June; clearly two days before the final deadline through a letter with reference number A4/4/735/c.288/1/687/10. In that letter, the PPPRA specifically requested NEITI to consider same as ‘superseding all earlier correspondences on the issues.”

He added that following PPPRA’s letter, NEITI further requested it to urgently provide evidence on its claims such as bank statements of Petroleum Support Fund payments for the period covered by the audit, schedule of collection of “over-recovery’’ from marketers and rationale for determination of national demands for petroleum products but PPPRA never responded.

“We wish to put on record that NEITI audit report discovered that the determined total over-recovery from 10 marketers between 2008 and 2009 amounted to N14.073 billion. From this determined collection, the federal ministry of finance deducted at source the sum of N3.127 billion, while the amount of N4.423 billion was paid by independent marketers into the PSF account managed and controlled then by the PPPRA during the period. The PPPRA further netted off over-recovery due from the subsidy of marketers to the tune of N2.809 billion and remitted this to the federation account.

“Therefore, actual payments made by marketers amounted to N7.232 billion which is N4.423 billion plus N2.809 billion. However, the NEITI report further disclosed that the PPPRA could not account for the amount of N4.423 billion, which was paid by the marketers to the agency. The position of NEITI remains, that this sum should have been and should be remitted to the federation account by the PPPRA, as at the time of this audit there was no evidence that this remittance was made to the federation account. NEITI wants to see proof that these remittances ever happened. This is the crux of the matter,” he said.