Auditor Faults NNPC Over £14 Million Spent in London Office
The Nigerian National Petroleum Company Limited (NNPCL) has come under scrutiny after the Auditor-General of the Federation questioned its inability to account for £14.3 million spent on its London office during the 2021 financial year.
The concerns were raised in the 2022 audit report, which contains interim observations requiring NNPC to provide clarification. Although the company responded to the queries, the Auditor-General described portions of its explanations as “untenable.”
According to the report, the oil company failed to supply audit officials with relevant financial documents or grant access needed to verify how the funds were utilized. This prevented auditors from confirming whether the spending complied with due process, financial regulations, and standards of accountability.
The report highlighted several regulatory breaches, noting that the expenditure violated key provisions of the Financial Regulations (FR) 2009.
These include:
- Paragraph 112, which mandates accounting officers to ensure internal rules and controls for proper revenue management.
- Paragraph 415, which warns that government funds must not be spent simply because they are budgeted, but must reflect “due economy.”
- Paragraph 603(1), which requires vouchers and supporting documents detailing dates, quantities, rates, invoices, and other verifiable information.
The Auditor-General warned that the lack of documentation exposes public funds to risks such as diversion and misappropriation. This issue is attributed to weaknesses in NNPC’s internal control systems.
In its response, NNPC management said the London office operates as a service unit with its own approved annual budget. They insisted that the £14.3 million budget for 2021 was executed according to operational and financial requirements. They added that detailed records of personnel costs, fixed contracts, and other expenditures were available upon request.
The company argued that the audit query did not specify the exact transactions or line items in question, making it difficult to provide tailored evidence.
NNPC added that it remains committed to strengthening internal controls and ensuring transparency across all units, including its London office.
Despite this defense, the Auditor-General maintained that the company’s explanations did not sufficiently address the issues raised. As a result, the audit findings remain valid until NNPC fully implements the recommended corrective actions.
The audit report further directed the Group Chief Executive Officer of NNPCL to immediately recover and remit the sum of £14.3 million into the federal treasury. It warned that failure to do so would trigger sanctions under Paragraphs 3106 and 3115 of the Financial Regulations (2009), which prescribe penalties for irregular payments and failure to account for public funds.
Beyond the London office expenditure, PREMIUM TIMES earlier reported that the latest audit also uncovered broader financial irregularities within the state oil company. These include alleged misappropriation of funds, inflated contract costs, and failure to deduct statutory taxes. The questionable transactions, which occurred between 2020 and 2021, amount to more than $51 million.
The report also indicted NNPCL for questionable spending totalling about N684 million on abandoned projects, unexecuted contracts, and irregular procurements. This further highlights persistent weaknesses in procurement compliance and project oversight.
A Pattern of Controversies
The Nigerian National Petroleum Company Limited has long faced criticism for opacity and weak financial accountability. Until 2020, the company failed to publicly release its audited accounts for 43 consecutive years, earning a reputation as one of the most non-transparent national oil companies globally.
Currently, the Economic and Financial Crimes Commission (EFCC) is investigating 14 NNPCL officials. This includes two former Group Managing Directors, Mele Kyari and Abubakar Yar’Adua, over an alleged $2.7 billion fraud linked to the maintenance and rehabilitation of the Kaduna, Warri, and Port Harcourt refineries. Despite receiving significant allocations for turnaround maintenance over the years, all three refineries have consistently underperformed and recorded zero production.
In a separate development, the Senate Committee on Public Accounts has been probing NNPCL over an alleged N210 trillion discrepancy in its audited financial statements covering 2017 to 2023. Although summoned four times to clarify the inconsistencies, NNPCL management only submitted a written explanation last week.
Previous audit reports have also raised red flags. Notably, the Auditor-General’s 2021 report accused NNPC (as it was then known) of unauthorised deductions and diversion of N514 billion. These add to concerns over systemic financial mismanagement.
Earlier this month, PREMIUM TIMES published an editorial calling on NNPCL to recover and refund all missing public funds. They warned that “no economy survives amid such dubious fiscal exertion on the treasury.”
