Nigeria Auditor-General Queries Multibillion-Naira Irregularities In NPA Accounts

LAGOS JUNE 26TH (NEWSRANGERS)-The Office of the Auditor-General of the Federation has issued seven queries on the audited accounts of the Nigerian Ports Authority in 2017.

The queries include standalone financial statements, non-current assets (depreciation, addition to fixed assets, property, plant and equipment, and interest in joint ventures), current assets (cash and cash equivalent, trapped fund in Enterprise Bank, inventories, trade receivables, etc.), liabilities, statement of profit and loss, and other comprehensive income, expenditures and administrative expenses.

The Auditor General, Adolphus Aghughu, in an audit report sent to the National Assembly, dated May 24, 2021, a copy of which journalists obtained on Friday, demanded explanation from the management of the NPA on its audited accounts, which he said was submitted to his office on February 22, 2019 for comment, in accordance with the provisions of the constitution.

The House of Representatives Committee on Public Accounts invited the Minister of Transportation, Rotimi Amaechi, and the management of NPA to appear before it on July 8, 2021 over the queries.

 Speaking on the N65.763bn spent on fixed assets, Aghughu said the NPA management should furnish the analysis of the assets acquired during the year, showing suppliers, evidence of ownership, gross amounts, outstanding amounts (if any), taxes deducted and remitted to the relevant tax authority and the current status of the assets.

Also on property, plant and equipment, on which N390.581bn was spent, the Auditor General said, “The carrying amount of the property, plant and equipment and properties on lease were qualified in the auditor’s independent report, because they were unable to obtain sufficient and appropriate audit evidence to confirm the completeness, existence and valuation of the carrying amounts.

“In view of the above, the management is required to provide the schedules of movable assets purchased by the concessionaires per the various lease agreement and furnish the list of assets in use and projects in progress acquired or being executed by the concessionaires for the authority under the ports development programmes of the lease agreements for audit scrutiny.”

The NPA is also expected to provide “sufficient records, backed up with a detailed fixed asset register to support the existence, completeness and carrying amounts of property, plant and equipment, as well as properties on lease,” while Aghughu further asked the management to “provide an updated non-current assets register showing the dates of purchase, location of assets and amount depreciated to date.”

The management is also to provide a list of property, plant and equipment transferred to Continental Shipyards Limited at inception as part of the NPA’s capital contribution and furnish the list of various assets, including buildings disposed by the authority in the last three years.

Aghughu further demanded a schedule of bank balances showing the names and locations of the banks at which cash and cash equivalent from current assets of the authority are maintained, the individual account balances and the respective comparative figures.

The office further asked for a “detailed list of the subsidiaries and the bank balances resulting in the observed total difference of N168,458,000 in the bank balances within and outside Nigeria between the group and the authority, which represent the balances of the subsidiaries.

“Cogent reasons why the accounts were garnishee by the law court and detailed efforts towards setting aside the order as shown in the table below being cash and cash equivalent under garnishee order by the law court.”

The office also reported that funds amounting to about $3.231m may have been trapped in Enterprise Bank as the report from the NPA management showed that “there was no movement in Enterprise Bank account with Number 6003605768 during the year.”

It added, “The balance has not changed from $3,231,677.45 for more than two financial years,” asking the management to provide the current status of this bank balance.

The Auditor General also queried the status of the Staff Home Ownership Scheme as well as the N1.5bn deposited as initial takeoff fund with Aso Savings and Loans Plc, which Aghughu said served as an agent for the creation of mortgages and the subsequent collections of repayments on the same mortgages, adding that the NPA later severed relationship with the bank, following the Federal Government directive on Treasury Single Account implementation in 2015.

The office said an audit examination showed that the NPA made an advance payment of about N4.479bn to contractors and demanded that the name of the individual contractor, nature of the contract, age analysis of each of the contracts and reasons for not sanctioning in line with the Financial Regulation 3104(1).

The Auditor General also demanded explanation from the NPA on the current status of about N2.334bn received from shipping companies in 2013 as tracking fees, which was deposited with First City Monument Bank and was supposed to have been transferred to the Economic and Financial Crimes Commission in 2017.

Speaking on circularisation of the management letter with terminal operators, the office said, “According to the Management Report, Page 37, Paragraph 5.3.1, seven terminal operators’ circularised two responses were received, while others had yet to reply.”

Aghughu noted that while one of the terminal operators quoted an indebtedness of $513,150.51, the NPA records were reading $4,485,981.52, showing a difference of $3,972,831.01. He added that while the second operator, ABTL, quoted $619,372.99, the NPA records showed $2,383,675.24 variance, with a difference of $1,764,302.25.

The NPA also queried “trade and other payable” on which N116,674,099,000 was spent, demanding the name of the creditors, services rendered, comparative figures as well as a breakdown of the Value Added Tax and Withholding Tax, stating the reasons the remittances amounting to about N35,317,209,000 were not made to the relevant tax authority.

Apart from a revenue of N239.480bn reported, for which the office is demanding a breakdown into their various components for audit scrutiny, Aghughu also queried under-remittance of operating surplus by the authority in 2017.

He said, “It was observed on Page 15 of the Financial Statements that the operating surplus for the year 2017 was N76,782,268,000 and N42,414,819,000 was appropriated for the year. However, during vetting, it was discovered that the sum of N61,425,814,400 should have been the appropriate operating surplus to be transferred to Consolidated Revenue Fund using 80 per cent as a basis, hence an under remittance amounting to ₦19,010,995,000 be remitted without further delay.”

The Auditor General also demanded explanation from the NPA on how the sum of N116.680m was expended, budgetary provision and evidence of the work done.

Aghughu also queried what he called excessive increase in administrative expenses, with insurance and licenses increasing from N1.182bn in 2016 to N3.809bn in 2017, an increase by about 222.1 per cent, while professional charges rose from N638.482m in 2016 to N7.208bn in 2017, representing 1,029 per cent.

Similarly, cost for repairs and maintenance increased from N209.044m in 2016 to N1.039bn in 2017, an increase of 397.3 per cent, while Oslo rebates stood at N6.409bn in 2017.

The Auditor General is also asking the NPA to provide the list of items insured, insurance policies, budgetary provisions and reasons for the escalation of the cost in 2017 by 222.1 per cent for audit scrutiny, provide the nature of the professional services, names and addresses of the professional firms, report of professional services rendered, which led to professional charges increased to N7,208,021,000 in 2017 from N638,482,000 in 2016.

Aghughu also wants the management to explain with breakdown, the increase in repairs and maintenance in 2017 to N1,039,505,000, from N209,044,000 in 2016, giving a difference of N830,461,000 (percentage increase of 397.3) and also provide the list of vessels that applied and granted Oslo rebates of N6,409,886,000 with relevant supporting documents.

Punch

Proudly MAJAN

Related Post

Short URL: http://newsrangers.com/?p=72805

Posted by on Jun 26 2021. Filed under Business, National. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

Leave a Reply

News Rangers TV

Recent Gallery Slideshow

Photo Gallery

Designed by News Rangers ICT Department