•Says oil firms undertake self-assessment of royalties
•Finds N11b gap in customs’ returns
LARGE-scale fraud in revenue calculation, collection and remittance to the Federal Government by some revenue-generating agencies and oil firms have been confirmed by the Auditor-General of the Federation (AGF) Samuel Ukura.
In the 2009 report now before the National Assembly, Ukura said sharp practices characterised the calculation of the revenue accruing from the oil sector to the Federation Account.
He said significant differences also existed in the figures of revenue remitted to the Federation Account by the Nigeria Customs Service (NCS).
The report is titled: “Yearly report of the Auditor General for the Federation on the Accounts of the Federation of Nigeria for the year ended December 31, 2009.”
Under a sub-head: “Wrong basis of calculating royalties and failure of Department of Petroleum Resources (DPR) to raise assessment,” Ukura said “during the audit examination of accounting and other records at the DPR for the Federation Account, the computation of royalties payable by oil companies was based on actual crude oil lifted by them and not calculated on actual production figures contrary to the provisions of the Memorandum of Understanding (MoU) with the relevant oil companies.”
The MoU provide that payment of royalties should be based on production volume multiplied by the prescribed royalty rates, he said.
According to him, the DPR had shirked its responsibility of raising the assessments on royalties and sending the demand notices to the oil firms for prompt settlement. “Rather, the oil companies are allowed to engage in the self-assessment of royalties payable by them. This action is obviously detrimental to the interest of the country.”
In the report, which The Guardian obtained in Abuja yesterday, the AGF said the attention of the Accountant-General of the Federation had been drawn to “this anomaly.”
The AGF said oil companies in Nigeria owed the government huge sums of money in local and foreign currencies. “Audit investigation revealed that the sum of N1.148 billion on penalty on gas flared and $795.309 million on royalties on crude oil were owed by various oil companies as at December 2009.”
The report also indicated that there were several instances of late remittance and non-payment of penalties by banks to the Federal Inland Revenue Service (FIRS).
“Audit examination of the accounting records maintained for the Federation Account at the FIRS, revealed that the collecting banks were in the habit of late remittance of actual collections to the Central Bank of Nigeria (CBN) thereby contravening the agreement between FIRS and the collecting banks.
“Also, there was no documentary evidence to authenticate the payment of penalties and interests totalling N172.655 million to the Federation Account.”
Ukura added that some money generated from over-recovery was not remitted to the Federation Account.
“The sum of N3.307 billion being the balance in the CBN statement for over-recovery in respect of the Petroleum Support Fund (PSF) Account as at December 31, 2009, which should have been paid back into Federation Account by Petroleum Product Pricing Regulatory Agency (PPPRA) was yet to be transferred to the Federation Account as at December 1, 2009. However, this amount was inclusive of N1.765 billion owed to a private oil company, which was said to be under litigation,” the report stated.
Ukura noted that the Federation Account Allocation Committee (FAAC) had not been rendering its yearly report to the National Assembly as required by the law.
In the case of NCS, the report states: “Audit examination of the records maintained for the Federation Account at the NCS revealed discrepancies between the figures of revenue generated obtained from the Customs and the figures of revenue remitted to the Federation Account by NCS obtained from the CBN components. The discrepancies arose from the figures of nine months – January, February, April, May, June, July, August, September, and December, which indicated that NCS remitted less than the revenue collected during the period to the government. While the figures for the three months – March, October and November indicated that the NCS remitted more than the revenues collected during the period to the Federation Account, which gave rise to a total net difference of N11.122 billion,” the report stated.
Meanwhile, a member of the House of Representatives, Mr. Segun Williams, has doubted the sincerity of the government’s efforts in the ongoing probe of the petrol subsidy scam.
He said for Nigerians to be convinced that the government meant well, the Petroleum Minister, Mrs. Alison-Madueke, should step down as a check against any interference with the probe.
The lawmaker told reporters in Abeokuta, Ogun State yesterday that as at now, the government was yet to find solution to the terrorist activities of the Boko Haram sect and urged dialogue with the group.
And a week after Governor Adams Oshiomhole of Edo State announced the reduction of the school fees in the state-owned Ambrose Alli University in Ekpoma as part of the palliatives to cushion the effects of the recent partial removal of subsidy on petrol, two leaders of the Peoples Democratic Party (PDP), Prof. Julius Ihonvbere and Vincent Akhere, have described the move as “cosmetic.”
Ihonvbere, a governorship aspirant of the party, stated this yesterday in a chat with journalists where he also debunked rumours that he may leave the PDP if he fails to clinch the ticket.
He said going by the position of the leaders of the party that the primaries would be free and fair, he was sure of winning the contest.
The politician asked: “Does the state government have bursaries and scholarships for the students? Has he (governor) fixed the libraries and the laboratories? Are the hostels’ conditions okay, does he respect students and teachers’ unionism? Does the university have a substantive vice chancellor, registrar, bursar now?”
Akhere also carpeted Oshiomhole for the N150.9 billion appropriation bill for 2012, saying the budget was solely proposed to prosecute his governorship election in July.