By Ben Ekori
Since last year, the media have been awash with the story of the probe of NNPC Limited over alleged unaccounted for N210 trillion in the company’s audited 2017-2023 accounts by the Senate. The probe emanated from an audit query by the Office of the Auditor General of the Federation with regards to two entries listed under “accrued expenses” and “receivables” with totals of N103tr and N107tr respectively. The audit queries simply described the two items as “unreconciled”,
Since the Senate Committee on Public Accounts waded into the matter with its probe, it has been a ding-dong affair between the Committee and NNPC. It turned what should ordinarily have been an open and close investigation into an inquisition. The Committee started off by tagging what the audit query described as unreconciled funds as “missing funds”. It then went ahead to lump the two figures together to arrive at “N210tr missing fund” to create sensational headlines in the media. Not satisfied with that, the Committee began to harass the NNPC with summons and ultimatums, turning down plausible explanations and documents from serving and retired officers of the company all in a bid to establish guilt where not exists.
That the Committee has been working towards a preconceived answer in its probe became obvious last week when Senator Adams Oshiomhole, a ranking member of the Committee, threw caution to the wind calling NNPC “a den of thieves” and rallying the Committee to go beyond its brief to issue a warrant of arrest on the former Group Chief Executive Officer of NNPC, Mr. Mele Kyari. At the hearing, it was clear that the Committee was not interested in getting to the heart of the matter as it was bent on antagonizing the company’s former Chief Financial Officer, Mr. Umar Ajiya, rather than objectively listen to his presentation. That has been the modus operandi of the Committee since it began the investigation.
The Senate saw through the whole charade last week and waded in to call the Committee to order. At a plenary session, the Senate Leader, Senator Opeyemi Bamidele, drew the attention of the Senate to the action of the Committee on Public Accounts in issuing a warrant of arrest as well as the prejudicial comments of Senator Oshiomhole. He pointed out that such action was in breach of extant rules of the Senate which vests the power to issue warrants of arrest on the Senate President after ratification by a plenary session. The Senate promptly dissociated itself from the actions of the Committee and called on Oshiomhole to withdraw his sweeping comment that NNPC was a den of thieves.
While the Senate’s action in dissociating itself from the Committee’s overreach is commendable, the occasion should have also served as an opportunity to take a deeper look at the modus operandi of the Committee which has turned a simple investigation of unreconciled funds into an inquisition about “missing and unaccounted funds”. It must be pointed out that what played out at the Committee’s hearing last week was not a one-off thing. In fact, that has been the norm. At the beginning of the investigative hearing early last year when the Chief Financial Officer of NNPC, Mr Dapo Segun, tried to explain the crux of the matter, he was hushed down in a similar way that the Committee did to Ajiya last week. If the Committee members had patiently listened to the CFO’s explanation, they would not have continued on the path of looking for what was not missing.
For those who have not been following the investigative hearing, Segun’s explanation was that in accounting, accrued expenses are not added to receivables, rather they are netted off from receivables to arrive at the true financial position of the company. To understand that explanation, a bit of definition of the terms “accrued expenses” and “receivables” would suffice. The simple dictionary meaning of “accrued expense” is: “financial obligations a business has incurred but not yet paid, for which it may not have even received an invoice”. On the other hand, “receivables” are: “claims for money owed to a business by customers or clients who purchased goods or services on credit”. In very simple terms, accrued expenses are monies or debts that a company owes, while receivables are monies or debts that others owe the company.
What the above means is that the N103tr under accrued expenses was the amount of financial obligations NNPC owed at that time. The N107tr under receivables in that same period means that NNPC was being owed that amount by its customers. The reconciliation query by the Office of the Auditor General was simply to seek documentation to verify what the company owed and what it was owed. That was the point that Mr. Segun tried to make from the onset of the investigation. His position was that the right thing to do was to net off the accrued expenses from the receivables. He argued that it was disingenuous for the Committee to add up the two items and tag it “missing or unaccounted funds”.
After more than a year of harassing NNPC and its serving and retired officials, it has become clear that the Committee was simply on a wild goose chase. That was the message handed down by Ajiya when he asked out of frustration at last week’s investigative hearing how it was possible for N210tr to be missing from a company that only made a profit of N3tr in the year under investigation. But like the proverbial sanitary inspector who chose to look for mosquito larvae under the bed, the Committee decided to overreach itself by issuing a warrant of arrest for the former GCEO.
Now that it has become very clear to the Senate that its Committee on Public Accounts is working towards achieving a preconceived agenda that has nothing to do with justice or accountability, it should go the whole hog to call off the investigation as it is complete waste of time and resources.
