The Federal Government of Nigeria has uncovered over ₦60 billion in financial irregularities within the Nigerian National Petroleum Company Limited (NNPC). According to the Auditor-General’s 2022 Annual Report on Non-Compliance, the irregularities include undocumented questionable payments totaling ₦30.1 billion, $51.6 million, £14.3 million, and €5.17 million.
The report highlights systemic weaknesses and poor internal controls that expose public funds to unnecessary risk. It accuses NNPC of unauthorized virements, tax infractions, irregular procurement, abandoned projects, and unsubstantiated settlements. The Auditor-General’s office has recommended the recovery of all unsupported payments, remittance of withheld statutory surpluses, and sanctions for officers responsible for the violations.
A significant portion of the irregularities relates to procurement violations, including inflated variations, irregular vessel substitutions, and emergency procurements without justification. The audit also flagged payments made without supporting documents, including $22.8 million in unsubstantiated Direct Sales Direct Payment settlements and $12.4 million for delayed generator procurement.
The NNPC has responded to the query, stating that the London Office operates as a service unit with an approved annual budget and that the £14.32 million allocated for 2021 was implemented in line with operational and financial requirements. However, the Auditor-General rejected the explanation, describing it as unsatisfactory.
The report has been transmitted to the National Assembly, and the Auditor-General has recommended that the Group Chief Executive Officer of NNPC appear before the Public Accounts Committees to explain the utilization of the funds. The recovery and remittance of the entire amount to the Treasury have also been directed, with sanctions to be applied to responsible officers if the funds are not recovered.
The uncovering of these financial irregularities highlights the need for improved internal controls and transparency within the NNPC. The Auditor-General’s office has emphasized the importance of ensuring that all statutory deductions are remitted promptly and accurately, and that entities must provide clear rules and procedures to safeguard revenue. The significance of this discovery lies in its potential to impact government revenue and undermine trust in public institutions. Next steps will likely involve further investigation and action to address the weaknesses in the internal control system at the NNPC.