The Office of the Auditor-General for the Federation has uncovered 28 major financial irregularities linked to the Nigerian National Petroleum Company Limited, involving N30.1bn $51.6m, £14.3m, and €5.17m in questionable payments, undocumented expenditures, and breaches of financial regulations. When converted to naira, the total amount is about N61.1bn
The red flags, contained in the Auditor-General’s 2022 Annual Report on Non-Compliance (Volume II), detail transactions carried out during the 2021 financial year across the NNPCL and its subsidiaries. The document was obtained by our correspondent on Sunday.
The report, which has been transmitted to the National Assembly, accuses NNPCL of weak internal controls, unauthorised virements, tax infractions, irregular procurement, abandoned projects, and unsubstantiated settlements.
“These findings highlight systemic weaknesses that continue to expose public funds to avoidable risk. Where documents were not provided, payments were unjustified. Where approvals were absent, expenditure breached the law. Recovery and sanctions must follow,” the Auditor-General’s office said.
The latest audit revelations come against the backdrop of earlier reports by The Newsmen this year, which exposed long-running financial discrepancies involving the Nigerian National Petroleum Company Limited.
The Auditor-General’s annual reports for 2017 to 2021 showed that the national oil company was previously indicted for the diversion of N2.68tn and $19.77m within a four-year period.
The breakdown includes N1.33tn flagged in 2017, N681.02bn in 2019, N151.12bn and $19.77m in 2020, and N514bn in 2021, signalling a persistent pattern of unremitted funds, unsupported transfers, and irregular withdrawals that have raised concerns about governance and accountability in the petroleum sector.
Among the most striking revelations in the new report is Issue 2, which concerns the expenditure of £14,322,426.59 at NNPC’s London Office without documentation.
Auditors said the corporation failed to provide utilisation details or supporting schedules for the amount.
According to the auditor-general, Financial Regulations (2009) place strict responsibilities on all accounting officers, including ensuring adequate internal controls and proper documentation for public expenditure.
Paragraph 112 mandates officers to provide clear rules and procedures to safeguard revenue.
In the same vein, Paragraph 603(1) requires every payment voucher to contain full particulars, dates, quantities, rates, and to be supported with invoices, purchase orders, letters of authority, and other relevant documents to enable verification without recourse to additional files.
However, the Auditor-General reported that these statutory provisions were breached in the operation of the Nigerian National Petroleum Company Limited’s London Office in the 2021 financial year.
According to the audit, a total of £14,322,426.59 was spent by the Foreign Office during the period under review, covering personnel costs, fixed contract expenses, and other operational needs.
A breakdown of the expenditure showed personnel costs amounting to £5,943,124.74, fixed contract and essential expenses totalling £1,436,177.11, while other operational costs stood at £6,943,124.74, bringing the total to £14,322,426.59.
Despite the magnitude of the spending, the audit team noted that it was not provided with supporting documents or given access to verify how the funds were utilised.
The report stated that the auditors were unable to ascertain whether the expenditure complied with due process and other requirements of the Financial Regulations.
The Auditor-General warned that the failure to provide documentation points to “weaknesses in the internal control system” of NNPC Ltd, exposing the organisation to the risks of diversion and misappropriation of public funds.
In its response, NNPC management said the London Office operates as a service unit with an approved annual budget and that the £14.32m allocated for 2021 was implemented in line with operational and financial requirements.
It stated that the office maintains detailed records of all transactions, including personnel and contract-related expenses, and expressed willingness to provide the documents upon request.
Management, however, argued that the audit query did not specify which transactions or line items were being questioned, making it difficult to provide targeted explanations. It added that the company remains committed to improving internal controls and ensuring compliance across all its units.
But the Auditor-General rejected the explanation, describing it as unsatisfactory. The report insisted that the query remains valid until NNPC provides full accountability for the funds and implements the prescribed corrective actions.
The audit recommended that the Group Chief Executive Officer of NNPC Ltd appear before the Public Accounts Committees of the National Assembly to explain the utilisation of the £14,322,426.59 spent by the London Office in 2021.
It also directed the recovery and remittance of the entire amount to the Treasury. Failing this, the Auditor-General said sanctions for irregular payments and failure to account for public funds, as outlined in paragraphs 3106 and 3115 of the Financial Regulations, should be applied to the responsible officers.
The report read, “Audit observed that the sum of £14,322,426.59 (Fourteen million, three hundred and twenty two thousand, four hundred and twenty six pounds and fifty nine pence) was expended for the London Office during the 2021 financial year.
“Audit was not availed the necessary documents and the opportunity to confirm the utilisation of the funds that were managed by the London Office and to ascertain that the expenditure was made following due process and economy as required by the extant regulations. The above anomalies could be attributed to weaknesses in the internal control system at the NNPC, now NNPC Ltd.”