By Okafor Joseph Afam
December 4, 2024

The Office of the Auditor-General for the Federation has uncovered financial irregularities amounting to over N514 million in Nigeria’s Ministry of Petroleum Resources. These anomalies, spanning January to December 2021, were highlighted in the Auditor General’s report titled Noncompliance and Internal Weakness in Ministries, Departments, and Agencies.

Key Findings

1. Unjustified Payments for Consultancy Services
   A total of N232.5 million was paid to seven companies for consultancy services on stakeholders’ engagement to address militancy in the Niger Delta. However, the report revealed a lack of evidence of venue usage or service execution. Only one out of seven payment vouchers was made available for audit.

The report stated that such expenditures should have been managed by the Ministry of Niger Delta, the Niger Delta Development Commission (NDDC), or the Nigerian National Petroleum Corporation (NNPC), which are more directly involved in such activities.

2. Breaches in Procurement and Tax Laws

A payment of N49.49 million to a logistics company was processed using restrictive tendering instead of competitive bidding. The contract lacked evidence of offer acceptance, technical evaluation, or financial assessments.

At least N25.5 million in statutory taxes (VAT, WHT, and stamp duty) was not deducted or remitted from payments totaling N137.92 million to contractors, violating Treasury Circular guidelines.

3. Mismanagement of Capital Votes
   The ministry spent N137.75 million from its capital vote without obtaining the necessary approvals, contravening financial regulations. This was flagged as a risk for extra-budgetary spending and improper funds management.
4. Irregular Ceiling Repairs
   N43.53 million was spent on replacing broken ceilings over five milestones within 2021. The report noted that such expenses were irregular and not routine maintenance, raising concerns about potential fund diversion.
5. Unretired Cash Advances
   Advances amounting to N74.72 million remained unretired, violating financial guidelines. The report attributed this to weaknesses in the ministry’s internal control systems.

Recommendations

The audit called for the permanent secretary of the ministry to:

Provide evidence justifying payments and adherence to due process.

Submit documentation on contract execution to the Public Accounts Committee of the National Assembly (NASS).

Refund or recover the misappropriated funds and remit outstanding taxes.

Strengthen internal controls to prevent future lapses.

The report warned that failure to comply would result in sanctions, including charges of gross misconduct and financial penalties.

Leadership During the Period

The anomalies occurred under the leadership of Timipre Sylva as Minister of State for Petroleum Resources and President Muhammadu Buhari as the substantive Minister of Petroleum Resources.

The revelations raise questions about financial accountability in one of Nigeria’s most critical ministries, with calls for immediate corrective action to prevent further loss of public funds.