Audit-Report-on-NNPC
Audit-Report-on-NNPC
Audit-Report-on-NNPC
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Investigative Forensic audit of crude oil revenues and remittances by <strong>NNPC</strong> (January 2012 – July 2013)<br />
4.2.5. Summary of findings<br />
Summary of findings<br />
50<br />
40<br />
30<br />
20<br />
10<br />
0<br />
$49.33 bn<br />
Value<br />
4.2.6. Other findings<br />
$2.33 bn<br />
$47 bn<br />
Increase<br />
Rec<strong>on</strong>ciliati<strong>on</strong><br />
Committee<br />
Secti<strong>on</strong><br />
Adjustm ent<br />
($bn)<br />
4.2.4.1 (1.46)<br />
4.2.4.1 1.00<br />
4.2.4.1 1.37<br />
4.2.4.1 1.7 0<br />
4.2.4.1 0.16<br />
4.2.4.1 (0.44)<br />
T otal 2.33<br />
4.2.6.1. Double valuati<strong>on</strong>s for crude sales under Unutilized Crude and<br />
Product Exchange<br />
We noticed from our review of the bank accounts where unutilized crude receipts are paid into, that<br />
amounts received from customers were usually more that the valuati<strong>on</strong> reported to FAAC. Our<br />
investigati<strong>on</strong> revealed a practice whereby crude oil lifted was valued at a lower price in the FAAC<br />
report than the price paid by the off taker.<br />
In these cases, after the buyer elects a pricing opti<strong>on</strong> under which the purchase will be made, <strong>NNPC</strong><br />
prepares a separate valuati<strong>on</strong> of the lowest under the three pricing opti<strong>on</strong>. <strong>NNPC</strong> would then report<br />
the sale to FAAC using the lowest price valuati<strong>on</strong> while invoicing the off-taker a higher price. We<br />
requested for a schedule and valuati<strong>on</strong> documents invoiced to buyers under unutilized crude and<br />
Product Exchange c<strong>on</strong>tracts during the review period, in order to fully quantify the impact of this<br />
practice <strong>on</strong> the Federati<strong>on</strong> Account. Our request was not granted.<br />
Vanguardngr<br />
4.2.7. Informati<strong>on</strong> provided subsequent to 28 November 2014.<br />
After the submissi<strong>on</strong> of our initial report to the <str<strong>on</strong>g>Audit</str<strong>on</strong>g>or-General of the Federati<strong>on</strong> <strong>on</strong> 28 November<br />
2014, the following was brought to our attenti<strong>on</strong> by <strong>NNPC</strong> regarding our findings <strong>on</strong> Revenue<br />
Remittance:<br />
<br />
Unremitted DPR revenue: <strong>NNPC</strong> notified DPR of our finding (in Secti<strong>on</strong> 4.2.4.4) that the<br />
payments for four DPR liftings did not reflect into the CBN/DPR JP Morgan account. We<br />
then received c<strong>on</strong>firmati<strong>on</strong> from DPR evidencing that the payments were made by <strong>NNPC</strong>. We<br />
C<strong>on</strong>fidential informati<strong>on</strong> for the sole benefit and use of the <str<strong>on</strong>g>Audit</str<strong>on</strong>g>or-General for the Federati<strong>on</strong>.<br />
PwC 58