FAAC Meeting Ends In Disarray Over NNPC’s N37bn Underpayment

FAAC Meeting Ends In Disarray Over NNPC’s N37bn Underpayment
  • PublishedMarch 28, 2018

The Federation Accounts Allocation Committee meeting, which was met on Tuesday to consider and approve the statutory allocation for February, ended in deadlock.

The committee could not approve the allocation to the three tiers of government owing to what was described as discrepancies in revenue figures presented to the committee by the Nigerian National Petroleum Corporation.

The meeting, which is put together to consider and approve revenues into the Federation Account and allocation to the three tiers of government, is usually chairman by the Minister of Finance, Mrs. Kemi Adeosun.

Other members of the committee are the Accountant-General of the Federation, Alhaji Ahmed Idris; commissioners for finance from the 36 states; representatives of revenue- generating agencies such as the Federal Inland Revenue Service, the Nigeria Customs Service and the NNPC, among others.

Idris confirmed the inconclusiveness of the meeting during a media briefing shortly after the gathering, which was held at the headquarters of the Ministry of Finance.

He said the committee came to the decision to postpone the meeting after discovering that the revenue remitted by the NNPC into the Federation Account was understated.

Idris stated that following various submissions made at the meeting by the members of FAAC, it was decided that there was a need to postpone the meeting pending the reconciliation of the revenue figure.

He said, “Let me be quick to tell you that the meeting was inconclusive because issues around reconciliation of figures are on the table.

“Obviously, you are all aware that anything that has to do with the federation revenue is statutory and therefore constitutional. And we must always verify our figures to the last kobo, failing which we will be committing illegality and unconstitutionality.

“It is on that note that we observed some issues in the figures given by one of the major revenue-generating agencies, namely the NNPC. And the committee is of the opinion that until and unless these figures are reconciled, corrected, verified and are factual, we cannot distribute the revenue as the case is.”

He added that the revenue would not be distributed until all outstanding issues were resolved.

The AGF said that while the government was committed to meeting its obligations to the people, such must be done in line with constitutional requirements.

He stated, “Let me be quick to inform Nigerians that we are sensitive to the issues but again, we have to follow the constitution and the necessary laws for the distribution of revenue and it is on this note that I inform you that the meeting has not been concluded.

“We will look at the revenue figures as submitted by the NNPC and reconcile such figures, and upon the conclusion of the reconciliation of that figure, we will share the revenue accordingly.

“We have to explain this to Nigerians, bearing in mind that as civil servants, workers in the federal, state and local governments deserve to have their salaries and all other commitments of the government.”

When asked how much the under-remittance was by the NNPC, the AGF failed to provide the amount, but added that the committee would investigate and determine the figure.

He added, “It’s not about the quantum of amount that is being distributed; it’s about reconciliation. In finance and accounting, when you hear reconciliation, it means figures don’t tally as presented by different sections and once figures do not agree, they must be made to agree.

“Unless we get to the bottom of it, have clarity and some level of certainty, we remain where we are.”

When asked when the meeting would be reconvened, he said, “As soon as possible; as we leave here, we are going to embark on the exercise because we feel time is of the essence. We must meet our responsibilities to the Nigerian workers.”

The Chairman, Forum of FAAC Commissioners, Mahmoud Yunusa, who spoke in an interview with our correspondent after the meeting, said that the amount in contention was about N100bn.

He said, “We started this meeting last week and the NNPC did not submit their figures until yesterday (Monday), which we were not able to review until this morning.

“This morning when we were reviewing the figures as presented by the NNPC, it came as a great surprise to see that the amount was less than N100bn. So, we decided that we will not accept the figure presented, that we will contest it.

“And we are contesting the figure because pipeline vandalism has reduced, while crude oil prices have continued to go up. So, we are wondering why the nation cannot raise enough money through that sector to share to states so that everyone can pay workers, contractors and so on.”

Yunusa added that the inability to approve the revenue for the month of February on time might affect the payment of workers’ salaries before Easter.

Investigations by our correspondent revealed that the amount remitted by the NNPC into the Federation Account for February was N74.06bn.

This, according to documents made available to the committee, is N37.76bn lower than the N111.83bn remitted in the previous month.

The document, which was obtained by our correspondent read, “A total sum of N74,067,185,437.92 was collected in the month of February, 2018, this shows a negative variance of N1,939,889,304.24 or 2.55 per cent below the approved monthly budget for 2017.

“Compared to the collection of N111,835,458,519.12 in January, 2018, this sum (N74,067,185,437.92), the February collection was lower by N37,769,273,081.20 or 33 per cent.

“We were unable to meet the approved budget as a result of low collection from concession rentals and PSC (Product Sharing Contract) and royalty.”

Meanwhile, Adeosun has reconvened the meeting of FAAC for today (Wednesday).

The meeting, according to a statement by her Media Adviser, Oluyinka Akintunde, on Tuesday night, is expected to hold at 9am at the headquarters of the finance ministry.

Akintunde said the minister had also called for an emergency meeting next week with the Group Managing Director of the NNPC, Dr. Maikanti Baru, and key management of the corporation over revenue payment into the Federation Account.

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