Friday, April 18, 2014

KPMG indicts NNPC auditors on management of fuel subsidy funds

Published:

The report came to light at a Senate hearing

An audit report by KPMG, a renowned management and accounting firm, may have indicted the Nigerian auditors charged with verifying the subsidy claims of fuel importers.

Those who have seen it said the report faulted Akintola Williams Deloitte and Olusola Adekanola and Co, for not detecting that marketers were inflating petrol importation expenses, defrauding the nation of billions of naira in the process.

Although the report is yet to be made public, Bukola Saraki (PDP Kwara State), a member of the senate joint committee investigating the management of funds set aside for petroleum subsidy,  revealed some of its details on Thursday during an investigative public hearing at the National Assembly.

According to Mr. Saraki, the KPMG report, commissioned by the Ministry of Finance to check claims by importers of petroleum products, confirmed that the auditors mingled with marketers in the day-to-day landing of products at the ports, a situation he said eroded their independence

Usually “PPRA verify import documents, and forward those documents to the finance ministry. The finance ministry appoints auditors who verify those claims and reports back to the ministry before payment is made,” Mr. Saraki explained.

“However PPRA mentioned in a report that independent auditors present at the end of the loop to verify the figures for the finance ministry are part of the daily operations of landing the cargoes from where they generate the initial figures. Following this initial revelation, the former minister of finance, Olusegun Aganga, commissioned the independent audit of the process by KPMG.

“KPMG has confirmed that that process is not actually right,” Mr. Saraki said.

Responding to questions from committee members, the Minister of Finance, Ngozi Okonjo-Iweala, admitted the existence of the KPMG report but said she had had no time to carefully examine it.

She however said the indicted auditors were the best the industry could offer.

 “What you are really ta

lking about is the trustworthiness of the professionals that are brought to do their job. When you hire auditors of international repute, they are expected to do their job in a professional manner. Even if you were to bring another one, they might still do what they want to do and give you the wrong figures.”

The Senate later gave the finance minister a seven-day ultimatum to make the KPMG report available to the committee. The report is expected to help their investigation into the management of the nation’s fuel subsidy, which has recently become controversial.

Akintola Williams and Deloitte has however denied any wrongdoing. An official of the company, who gave his name as Simi, said he was not aware of the allegation but that his company tries to uphold the best ethical practices in its businesses.

Both the Abuja and Lagos offices of Olusola Adekanola and Co could not be reached for comments.

 

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