A recent report from the Auditor General of the Federation’s office has revealed ruts in Federal University of Petroleum Resources, Warri and huge bad debts of N146 million in six selected oil and gas firms, a development that means huge revenue loss for Africa’s biggest oil-producing country.
The Auditor General’s office has the fundamental function to protect public interest by performing a detailed and objective examination of public accounts and also scrutinising ministries, departments and agencies’ expenses.
The Auditor-general’s said a contract worth N830 million for the Construction of Building, Procurement of Laboratory Equipment and Capacity Building/staff training among others at Federal University of Petroleum Resources, Warri was misapplied.
“These payments show that the purpose for which the fund was appropriated for was not achieved; as the sum of N830 million meant for various projects was used for other activities not included in the Needs Assessment,” Ayeni said.
The university management responded that out of the N416million was used as a 20 percent counterpart fund to Shoreline Development International Limited for a Public-private-partnership (PPP) Agreement/project which the University plans to recover.
However, evidence and reports on the progress of this partnership were not attached to their response to the Auditor general’s office.
The University said the remaining balance of N414 million was borrowed to augment staff salary shortfalls few years ago with letters to government agencies appealing for support during the period of salary shortfalls that necessitated the borrowings provided.
“However, there was no evidence to show that these salary loans were repaid back to the Fund and used for what it was specifically appropriated for,” Ayeni said.
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Nigeria’s auditor general recommended that due to unsatisfactory evidence that does not confirm the Public- Privatepartnership effect and the commencement of repayment of the borrowed funds; the ViceChancellor is required to recover the total funds of N830million and refund back to Treasury with evidence forwarded to his Office for confirmation.
The report also said a contract of N190 million for the construction and furnishing of workshop and laboratory revealed irregularities in payment as no evidence was established that a formal request was made by the contractor for the price variation and there was no formal approval given by the original Tender Board that awarded the contract.
Also, a total sum of N413 million appropriated and approved for the Procurement of Laboratory Equipment ( N13 million) and Staff Residential Complex (N400 million) under the Special Presidential Needs Assessment Phases I & II was yet to be awarded out despite the release of the total funds to execute both projects.
“The Vice-chancellor is required to explain the non-execution of projects on which payments were duly made,” Ayeni said in the report.
The total sum of N990 million was approved for the Construction and Furnishing of a 3-story, 4-floor structure Student Residential Building Complex, with reference number and completion period of 48 weeks; however the project was filled with many irregularities.
“These irregularities are an indication of weak internal control and wastage of public funds. The Vice-chancellor is required to account in details the utilization of N1 billion with relevant approval attestations; otherwise, the total sum should be recovered and evidence of recovery forwarded to my office for verification, Ayeni recommended.
According to the report, the six oil and gas firms include Mid Western, Newcross, Shoreline, Express, Cavendish and Allied Energy have debts of N146 billion which are becoming bad and doubtful.
Audit Fieldwork conducted in 2018 revealed Mid Western has the highest debt with an outstanding balance of N83 million as at 31 August 2018 followed by Allied Energy with a total debt of N34.6 million, while Shoreline, Express, Cavendish and NewCross recorded N23.7 million, N3.6 million, N2.6 million and N1.2 million respectively
Anthony Ayine, Auditor-general of the Federation, said the development will lead to “Loss of revenue to the government as a result of bad debts.”
