NDDC Audit and the N6 trillion revenue question mark

Was the recently submitted Niger Delta Development Commission forensic audit report a charade, not-thorough-work cobbled after nearly two years of rigmarole? NSEOBONG OKON-EKONG asks

Hardly had the ink dried on the seemingly disturbing details of the Forensic auditors’ report on the Niger Delta Development Commission (NDDC) than no less an organisation as NDDC’s external auditors picked holes in the reported figures, and emphatically stated that NDDC received N2.396 Trillion in 19 years, and not N6 Trillion; that NDDC has never operated 362 bank accounts but 33 which were closed in 2015 following the introduction of Treasury Single Account (TSA) and reduced to four bank accounts; and that there aren’t 13,000 abandoned projects in the Niger Delta region.

This ugly development leaves many bewildered whether the nation and Niger Deltans have not been sold a dummy, taken for a ride, and made to wait for two years without an NDDC Governing Board, all for nothing.

In the past three weeks the nation’s media has been awash with stories of the submission of the Forensic Audit report of NDDC to President Muhammadu Buhari by Minister of Niger Delta Affairs, Senator Godswill Akpabio.

The highpoints of the audit report which was received by the nation’s Attorney General and Minister of Justice, Abubakar Malami, on September 2, are that NDDC has 13,777 doubtful projects despite receiving N6 trillion allocation in 19 years, 2001 to 2019.

According to the report, within 19 years, from 2001 and 2019, the Federal Government approved over N3.3 Trillion to the agency as budgetary allocation, and N2.4 Trillion as “income from statutory and non-statutory sources” which “brings the total figure to the sum of approximately six trillion Naira given to the Niger Delta Development Commission.” Despite this, “We have on record over 13,777 projects, the execution of which is substantially compromised.”
The forensic audit report also stated that NDDC is running 362 bank accounts resulting in lack of proper reconciliation of accounts.

The NDDC forensic auditors comprised the Lead Forensic Auditors and 16 Field Audit Firms with a Security Committee for securing the lives and properties of the audit firms throughout the duration of the forensic audit exercise, which started in November 2019 and ended in August 2021.

To the consternation of many, however, from the letter below, dated September 6, 2021, addressed to the Interim Administrator of NDDC, signed by Otunba Funsho Owoyemi, Managing Partner of Funsho Owoyemi and Co., who are external auditors to NDDC, the auditors cast doubt on the integrity of the figures reported in the forensic audit.

Titled, Re: Report of the Forensic Auditors on the Niger Delta Development Commission, the external auditors stated that they “found it compelling to straighten the records on some of the issues being paraded in the public space.”
The detailed letter is published in full below:

September 6, 2021

The Interim Administrator,
Niger Delta Development Commission, 167, Aba Road,
Port-Harcourt, Rivers State.

Attention: Director of Finance

Dear Sir,

RE: REPORT OF THE FORENSIC AUDITORS ON THE NIGER DELTA DEVELOPMENT COMMISSION (NDDC)

The above captioned which is now a subject of public discourse has come to our notice and as the current External Auditors to the Commission, we are indeed an interested party in the matter.
Therefore, we have found it compelling to straighten the records on some of the issues being paraded in the public space and our immediate reactions are as follows:

(i) THE TOTAL RECEIPTS OF N6 TRILLION BETWEEN 2000 – 2019:

Our attention was particularly captured by the comment that, the Commission received the sum of N6 trillion since its inception. This assertion is grossly at variance with the records from all relevant sources including the Audited Financial Statements of the Commission over the relevant years of reference.

As the External Auditors to the Commission for the past couple of years, we provide hereunder the breakdown of aggregate receipts by the Commission from year 2000 to 2019 which stood at a total sum of N2.395 trillion:

From the detailed analysis derived from the Audited Financial Statements, it is not unlikely that, unrelated figures were inadvertently included in the aggregate.

(ii) STALLED DEVELOPMENT PROJECTS:

Although, we are not yet privy to the sums of money attached to the over 13,000 abandoned projects said to have been discovered and allegedly reported by the Forensic Auditors; below is the schedule of stalled projects, location by location as at December, 31st 2019.

(iii) THE PASSAGE OF TIME AND THE NEED FOR A REALISTIC CUT– OFF DATE:
As you are aware, real project development by the Commission commenced from year 2001 and it is therefore conceivable that some of the physical works may have been eroded over the period, particularly those relating to road infrastructure, clearing of water ways and the likes. For example, some of the roads constructed over 10-15 years may have differed failures, rehabilitated and/or reconstructed over this period.

For these reasons, it was our expectation that a realistic date for the forensic audit should have been considered in order to achieve the best possible result.

(iv) REALISTIC CLASSIFICATION OF STALLED PROJECT:

By our experience, the Forensic Audit of the Commission’s Development Projects could have been defined as those projects that have not

witnessed any activity in the last 3-5 years and above or whose estimated completed date has lapsed for over 2-3 years and more. It could also be those projects for which contracts have been awarded mobilization paid and the contractors have not commenced several years after mobilization.

NUMBER OF BANK ACCOUNTS OPERATED BY THE COMMISSION:

We have noted with some reservation, part of the information said to be contained in the Forensic Audit report to the effect that, the Commission maintained over 200 bank accounts.

However, from the information available to us, the Commission maintained a total of 24 bank accounts at the Headquarters level and 1 UBA account by each state offices making a total of 33 as at December 31st, 2014.

It is also important to note that, with the introduction of the Treasury Single Account (TSA); the banks accounts have been collapsed into only (4) four as at December 31st 2015.

The government’s decision to carry out a comprehensive review of the activities of the Commission from inception is certainly a laudable step, which inter-alia will bring out useful details that will be beneficial to the Commission and provide basis for government’s future development plan.

• Accordingly, we have considered it imperative to deal swiftly on the matters above by way of clarification to avoid a gross misunderstanding of the financial position of the Commission.

• All figures above were duly agreed with the various management of the Commission, whilst physical verification of projects carried out to justify both the quantum and values of project.

• Similarly, confirmation of bank balances were annually carried out while a post-TSA mandate compliance carried out on all the banks. It is interesting also to state that, the various oversight

offices of government were regularly advised, that is, the Auditor-General Office, Accountant- General Office, the Public Account Committee of the National Assembly.

Besides, the various External Auditors Reports and Management Letters for each year were duly prepared, signed by the various Boards and circulated to all the relevant Agencies mentioned above.

We shall be willing at your instance to provide more clarification and/or explanation to matters within our sphere of work as your External Auditors.

While we look forward to the full/detailed report of the Forensic Audit Exercise when they are received; the above represents our immediate thoughts on the information so far in the public domain.

In a similar vein, an advocacy group, Niger Delta Justice Forum (NDJF) of No. 86 Nwaniba Road, Uyo, Akwa Ibom State, led by Bassey Ime Idongesit, in a September 7, 2021 letter to Attorney-General and Minister of Justice, and published in a national daily on September 8, 2021 also described the audit report as “mendacious and dissembling.”

According to NDJF, “The exact amount of funding received by NDDC from 2001 to 2019 is a matter of public information and available in the Office of the Accountant-General of the Federation and that of NEITI. If this basic but fundamental element of the forensic audit report can be intentionally misrepresented to create a baseless sensation, then the report leaves much to be desired.”

It went further to list the amount audited records indicates that NDDC has received from 2001 to 2019 to be as follows:

FEDERAL GOVERNMENT CONTRIBUTIONS:       N760,165,606,560.32

GOVT (OMPADEC ELECTRICITY FUND):            N2,500,000,000.00

STATE GOVERNMENT GRANTS:                        N18,175,000.00

OIL COMPANIES CONTRIBUTIONS:                  N1,623,690,225,765.07

OTHER INCOME:                                            N19,566,957,137.81

TOTAL RECEIPTS:                                           N2, 405,940,964,463.20

As can be seen from the above, the figures reported by NDJF is within the same band as that indicated by the external auditor of NDDC. Whereas the NDDC external auditor states that the amount received by NDDC over the 19 years in question is N2.396 Trillion, the NDJF reports a sum of N2.405 Trillion. These figures are way below the N6 Trillion which the forensic auditors reported.

NDJF questions: “Does it mean that the auditors don’t know the difference between income and approved budget or were they instructed to engage in deliberate misrepresentation? This misinformation is not only misleading, wicked and unconscionable but also inimical to future growth of the Niger Delta region. It is capable of inciting other regions against the Niger Delta now already being perceived as having frittered away a whopping sum of N6 trillion.”

Already there is insinuation that the forensic auditors were tele-guided in the course of the audit exercise and were not allowed access to relevant and existing documents of NDDC. Some of the forensic auditors were said to have complained aloud of censorship and lack of access to vital documents

The Akwa Ibom based advocacy group has therefore implored the attorney general to verify the forensic audit figures and urgently correct the falsehood because NDDC has had its audited report submitted to the Auditor-General of the Federation, the National Assembly, NEITI, The NDDC Presidential Reports and other regulatory agencies. It is unprofessional, they stated, for the auditors not to have liaised with any of these agencies for independent confirmation of information.

NDJF told the Minister of Justice that the “report should either be referred to the Auditor-General of the Federation for a review or be sent back to the Minister (Niger Delta Affairs) for his continuous entertainment.”

The forensic audit report may eventually turn out to be a shambolic exercise which, ab initio, was cleverly devised to deflect and buy time to continue to maintain absolute control over the finances of NDDC, delay the inauguration of the substantive board, wittingly perpetuate the ongoing illegality of a sole administrator not known to the law setting up NDDC, and thereby unnecessarily heighten the rising tension in the region which could be inimical to oil exploration activities.

QUOTE
The forensic audit report may eventually turn out to be a shambolic exercise which, ab initio, was cleverly devised to deflect and buy time to continue to maintain absolute control over the finances of NDDC, delay the inauguration of the substantive board, wittingly perpetuate the ongoing illegality of a sole administrator not known to the law setting up NDDC, and thereby unnecessarily heighten the rising tension in the region which could be inimical to oil exploration activities

QUOTE 2

Otunba Funsho Owoyemi, Managing Partner of Funsho Owoyemi and Co., who are external auditors to NDDC, the auditors cast doubt on the integrity of the figures reported in the forensic audit. Titled, Re: Report of the Forensic Auditors on the Niger Delta Development Commission, the external auditors stated that they, found it compelling to straighten the records on some of the issues being paraded in the public space

(THISDAY)