Key Points
- The Senate Public Accounts Committee has given NNPC Ltd.’s external auditors one week to provide a detailed breakdown of over N210 trillion recorded as receivables and payables.
- Lawmakers said the figures remain unexplained and cannot remain unreconciled in the company’s audited financial statements.
- The committee rejected the auditors’ request for an additional two weeks to retrieve supporting documents.
- Senators insisted the auditors are professionally obligated to defend the financial statements they certified.
- The committee stressed it is not alleging that funds are missing but seeking clarification on the transactions behind the entries.
Main Story
The Senate Public Accounts Committee has given the external auditors of the Nigerian National Petroleum Company Limited (NNPC Ltd.) one week to provide a comprehensive breakdown of more than N210 trillion recorded as receivables and payables in the company’s audited financial statements.
The committee, chaired by Senator Ibrahim Dankwambo, directed the auditors to submit the schedules, working papers and supporting documents used in certifying the accounts, maintaining that the figures remain unexplained and must be properly reconciled.
The disputed entries comprise approximately N107 trillion classified as receivables and N103 trillion recorded as payables.
Proceedings at the hearing became heated after representatives of the audit firm requested two weeks to retrieve the supporting schedules, arguing that the documents formed part of their working papers.
However, the committee rejected the request, questioning why documents supporting figures already certified in the audited financial statements could not be produced promptly.
The auditors maintained that NNPC Ltd., as their client, was better placed to explain the accounting entries, noting that the company had previously indicated it would provide clarifications before the committee.
Lawmakers, however, rejected the position, insisting that external auditors are independently responsible for defending the audit opinions they issue and cannot defer responsibility to their client.
The committee also criticised the continued inability of both NNPC Ltd. and its auditors to reconcile the receivables and payables, despite previous explanations that the figures largely relate to joint venture cash calls and payments.
According to the lawmakers, if both entries arise from related transactions, the company and its auditors should be able to identify the counterparties and reconcile the balances.
The committee subsequently directed the auditors to return within one week with a detailed schedule identifying every component of the N107 trillion receivables and N103 trillion payables, alongside the supporting documentation used in certifying the accounts.
The Issues
The Senate’s inquiry underscores concerns about transparency, accountability and financial reporting standards in state-owned enterprises. While lawmakers clarified they are not alleging that the funds are missing, they argue that financial statements containing trillions of naira in unreconciled receivables and payables undermine confidence in the integrity of audited accounts. The outcome of the investigation could also have broader implications for audit accountability and corporate governance in public institutions.
What’s Being Said
Committee Chairman, Senator Ibrahim Dankwambo, said:
“When you have figures in the financial statements, there must be supporting schedules showing how those figures were arrived at. If you already have them in your working papers, why do you need to go back before presenting them to this committee?”
He further included:
“We are not saying the money is missing. We are saying the figures remain unexplained. For amounts of this magnitude to remain unreconciled in audited financial statements is deeply concerning.”
Senator Abdul Ningi stated:
“The Constitution empowers this committee to invite any person and request any document necessary for our investigation.”
“You are before this committee as independent auditors. Do not tell us you must first seek permission from your client before complying with the lawful request of Parliament.”
Senator Adams Oshiomhole highlighted:
“NNPC is not a private family business. It belongs to the Nigerian people. We represent those people, and we are entitled to know how every kobo is accounted for.”
“There can be no secrecy between an auditor and a wholly government-owned company when Parliament is carrying out a constitutional investigation.”
What’s Next
The external auditors are expected to reappear before the Senate Public Accounts Committee within one week with detailed schedules, supporting documents and explanations for the disputed receivables and payables. The committee is expected to review the submissions to determine whether the entries can be adequately reconciled or whether further legislative action will be required.
Bottom Line
The Senate has intensified its scrutiny of NNPC Ltd.’s audited accounts, demanding full disclosure of more than N210 trillion in unreconciled receivables and payables. While lawmakers insist they are not alleging financial misappropriation, they maintain that the unexplained entries must be fully accounted for to preserve confidence in the company’s financial reporting and audit process.
