Sanusi’s Alleged Missing US$20 Billion and PriceWaterCooper Audit Report

NNPC PriceWaterhouseCooper Audit Report Analysis

Abel Ude (ACA), (NIGERIA MOMENT), Uyo –

President Jonathan in line with Section 7(2) of the NNPC Act, directed that the 
full report of the PWC Audit of the NNPC accounts be released immediately to the public so that all Nigerians will be properly informed on the matter.

Following the release of the referenced audit, I have been reading several comments on social media on the report of Price Waterhouse Cooper (PWC)  on the alleged US$20 Billion said to be missing by the former CBN Governor Sanusi. I am surprised at the proud level of ignorance Nigerians display when commenting on issues they know next to nothing about.

A whole lot of comments centred on the the auditor’s statement that in carrying out their assignment, “The procedures we performed did not constitute an examination or a review in accordance with generally accepted auditing standards or attestation standards. Accordingly, we provide no opinion, attestation or other form of assurance with respect to our work or the information upon which our work was based.”

People criticized the report on the basis of this and felt the report was indicting or that PWC was not thorough in carrying out its mandate. My submission on this is that the task carried out by PWC was not an AUDIT but an Investigation which can be termed a NON Audit Service. Audits are statutory while non -audit services like Investigations such as carried out by PWC are not statutory.

In an Audit the auditor is expected to form an opinion as to the truth and fairness of financial statements and compliance to local legislation and IFRS, however for non-audit service as this investigation the scope of work is not LAID DOWN IN STATUTE so it is agreed between the Office of Accountant General of Federation (OAFG) and PWC. This was clearly stated “Our services were performed and this Report was developed in accordance with our engagement letter dated 5 June 2014 and subject to the terms and conditions included herein. Our Scope of work included the following:

  1. Analysis of remittance shortfalls from NNPC into the Federation Accounts;
  2. Analysis of submissions made by key stakeholders in relation to these alleged shortfalls; and
  3. Producing an independent Forensic report detailing our findings.”

This Investigation was commission based on the inconsistent allegations of missing US$49.12 and later US$20 billion, the report started with events leading to the commission and the findings of the report was eye opening.

Nigeria National Petroleum Corporation (NNPC)  had earlier explained that oil revenue for the period under review was US$67 Billion but further investigations revealed that actual revenue was US$69.34 billion. Actually total revenue remitted to federation account was US$50.81 billion as against US$47 billion earlier stated by NNPC.

A figure of US$740 million  excess remittance was established while further unverified indirect cost of US$2.81 billion was established this cost alongside other costs totaled US$14.16 billion. These cost are broken down as follows US$8.7 billion DPK and PMS subsidy payments, Costs directly attributable to domestic crude US$1.46 billion, Total other third party financing arrangement US$1.06 billion, and Equity crude oil processing cost US$130 million. If the sum total of these cost is net off against actual revenue of US$69.34 billion expected total remittance ought to have been US$50.07 billion but actual remittance is US$50.81 billion which gives the above potential excess remittance.

Also mentioned as part of the gross revenue is a figure of US$5.11 billion NPDC revenue, PWC termed the US$5.11 as unremitted revenue however the Attorney General Legal Opinion relied upon by the firm indicated that NPDC was to make dividend payments in line with its dividend policy alongside Petroleum profit tax, Royalties and signature bonuses. This term is misleading as we do not know the dividend policy of NPDC and as a wholly owned subsidiary the company has its own statement of financial position and income statement and as such could not possibly remit all its earnings to NNPC.

Hence to restate the figures of PWC,

Revised Actual Revenue will be US$69.34 less US5.11 which his US$64.23.

Revised Actual Revenue US$64.23 billion
Total Established Cost (US$14.16) billion
Expected Remittance US$50.07 billion
Actual Remittance US$50.81 billion

Please note that NNPC is entitled to dividends from the Net Revenue of NPDC so the term unremitted NPDC earnings is misleading. The report also mentioned NPDC as owing NNPC US$1.75 billion USD for NNPC’s assets in Joint Ventures with Shell.

The report exposed various means NNPC was fleecing the federation account through “computational errors”, reduction of ex-depot price for PMS subsidy claims US$36.05 million overcharge from PPPRA , increased ex-depot DPK price US$205 million overcharge, over claim on subsidy payment US$980 million, duplicated charges of US$63.7 million, approximation error of US$4.68 million, Unsubstantiated cost of US$305.89 million. These fraudulent practices are not isolated to NNPC alone most government agencies and the three levels of Government are cesspools of these schemes.

The now Emir Sanusi emphasised spending monies on subsidies without appropriation and I agree with him to an extent but he should note that the NNPC Act LFN 33 of 1977 states in chapter 320 part 1 as follows

“The Corporation shall maintain a fund which shall consist of –
(a) such moneys as may from time to time be provided by the Federal Government for the purposes
of this Act by way of grants or loans or otherwise howsoever; and
(b) such moneys as may be received by the Corporation in the course of its operations or in relation
to the exercise by the Corporation of any of its functions under this Act, and from such fund there
shall be defrayed all expenses incurred by the Corporation.”

Until laws enabling the NNPC operates the way it currently does are repealed we would only be scratching the surface of an Augean stable.

The claims of the Emir Sanusi where outrageous as regards the figure though to be fair to him he maintained that the monies where not stolen but only unreconciled and unremitted to the Federation Account. It would have helped the polity if the Emir had liaised with NNPC and the attorney general’s office before making inconsistent statements for the teeming uninformed population to feed fat on.


Abel Udi (ACA) is a Chartered Accountant.

Abel Udi (ACA)
Abel Udi (ACA)