The Office of the Auditor-General for the Federation has revealed that Nigeria’s Ministry of Petroleum Resources mismanaged public funds totalling over N514 million.
The petroleum ministry was found wanting on five issues for the period of January to December 2021, according to the ‘Auditor General’s Noncompliance and Internal Weakness in Ministries, Departments and Agencies.’
A payment of N232.5 million was made to curtail militancy in Niger Delta in January 2021. According to the findings, the money was paid to seven companies for consultancy services for stakeholders’ engagement without evidence of venue used. Also, only one out of seven paid vouchers was provided for audit examination.
“Expenditure of this nature should have been handled by the Ministry of Niger Delta, Niger Delta Commission (NDDC) and NNPC, who are direct stakeholders, instead of Ministry of Petroleum Resources,” the auditor general’s report said.
It noted that a sample payment of N49.488 million with voucher number MPR/CAP/49/2021, dated 3rd January 2021, which was made to a logistics company, revealed that, “Restrictive tendering was used instead of competitive bidding; there was no evidence of acceptance of offer by the consultant; there was no technical and finance evaluation.”
The report further highlighted that N2.9 million made to a security personnel was not backed with relevant supporting documents, among other payments that violated financial guidelines.
The audit report recommended that the permanent secretary of the ministry provide justification for payments made and due process followed in the award of contracts. The P.S. will also produce all forms of evidence for execution of contracts, refund and remit the said sum or face sanctions
From the details of the findings, the ministry expended the sum of N137.75m from capital vote for expenditure without approval in accordance with appropriate financial regulations.
This puts the country at risk of extra-budgetary spending, loss of government funds and improper funds management.
Also, at least N25.5 million (7.5 percent VAT, 10 precent WHT, and 1 percent Stamp duty) was not deducted or remitted as statutory tax from payment of N137.92 million made to contractors, contravening the Treasure Circular which speaks to taxes chargeable on contract agreements.
The audit noted that the management’s response was not satisfactory, recommending that the said amount be recovered, or sanctions apply in accordance with financial regulations.
The sum of N43.53 million was further uncovered as payment for the replacement of broken ceiling. The report faulted the expenditure, which was made in five milestones – three in the first three quarters of 2021 and another two in the last quarter of the same year, noting that the repair of the ceiling was not a routine expenditure, which showed irregularities that could lead to diversion of public funds.
The report recommended that the permanent secretary of the ministry justify the expenditure to the Public Accounts Committee of the National Assembly (NASS), provide documentary evidence of compliance or face sanctions for irregular payment.
On non-retirement of cash advances totalling N74.72 million was uncovered against regulations that require accounting officers to ensure prompt repayment of all advances. The audit attributed the noncompliance to weakness in the internal control system at the ministry of petroleum resources.
The report recommended that the leadership of the government ministry justify, recover and remit the said amount, or risk punishment for nonretirement of advances and gross misconduct should take effect. Timipre Sylva was ministerr of state for petroleum ressources at that time, while President Muhammadu Buhari was minister of petroleum resources.
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