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Okonjo-Iweala’s Proposed Forensic Audit of NNPC Account Unconstitutional

Nigeria's minister of Finance, Ngozi Okonjo-Iweala

It has emerged that the proposal by the finance minister for the forensic audit of the accounts of the Nigerian National Petroluem Corporation is against section 85 ( c ) of the 1999 constitution  which prescribes procedures for the auditing of federal agencies .

Nigeria's minister of Finance, Ngozi Okonjo-Iweala

Nigeria’s minister of Finance, Ngozi Okonjo-Iweala

Checks showed that the constitution does not allow the minister of finance to nominate auditors or conduct forensic investigations of accounts of any agency as the constitution directly instructed the Auditor General of the Federation to only nominate certified auditors to such affected agencies.

Industry watchers who pointed out that section of the constitution were quick to see the finance minister as pursuing line of action contrary to the law and the constitution even as some of them believed the coordinating minister is using the controversy to hijack the statutory functions of the Federal ministry of Petroleum Resources.

A very highly placed source expressed surprise at the advocacy of the finance minister, asking :” Is she not aware of section 85 (c) of the constitution? This whole audit question is about subsidy claims of NNPC. Are other marketers under Petroleum Subsidy Fund subjected to the same audit before their claims are paid?, the source asked.

Various groups and individuals have advocated one form of auditing or the other. The Finance minister, Dr Okonjo Iweala   had suggested a forensic audit by an external auditor while Human right lawyer, Femi Falana proposed that Accountant General’s Office should handle it. Some voices in the Senate even canvassed that the senate Public Accounts Committee should take up the task.

But aside banning external, forensic audit, the constitution even barred the Auditor General from auditing the agencies directly. The role of the Auditor General’s office is to recommend list of auditors from which the affected agencies would select.

Section 85 (3) of the 1999 Constitution states had stated that  “Nothing in subsection (2) of this section shall be construed as authorizing the Auditor-General to audit the accounts of or appoint auditors for government statutory corporations, authorities and agencies, including all person and bodies established by an Act of the National Assembly, but the Auditor-General shall (a) provide such bodies with a list of auditors qualified to be appointed by them as external auditors and from which the bodies shall appoint their external auditors.”

Checks showed that it was on the basis of this constitutional provision that the senate faulted and declared null and void the forensic audit of the NNPC carried out by the KPMG under the direction of the Federal Ministry of Finance in 2012.

The Chairman of Senate Committee on Public Accounts, Ahmed Lawan had announced that , “The Auditor-General is statutorily expected to provide the bodies with the list of auditors qualified to be appointed by them. Any auditing exercise that circumvents this established and mandatory process is unconstitutional, illegal, flawed and null and void in the eyes of the law.

Senator Lawan said the panel will not accept the audit report because KPMG is not on the list of firms of auditors accredited by the Auditor General of the Federation, adding that “KPMG is not accredited by the Office of the Auditor General of Federation (OAGF) and that the process of selecting KPMG also violates Section 85(3) of the Constitution which provides that the OAGF shall recommend external auditors for government agencies.

He said it is mandatory for all government agencies to engage services of only auditing firms that have been accredited by the OAGF in compliance with the law,calling  on the KPMG and others interested in auditing NNPC or other bodies to subject themselves  to accreditation process by the OAGF.

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