FG to audit accounts,
tax filling of oil coys
By CHIDI NNADI
Monday, December 5, 2005
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The Federal Government would soon begin auditing of accounts
of all oil companies operating in the country. This would
be carried out in three levels: process audit, financial audit
and physical audit.
The Minister of Solid Mineral Development, Mrs Obiageli Ezekwesili,
who disclosed this at the opening ceremony of the South-West
Road Show of the Nigerian Extractive Industries Transparency
Initiative (NEITI) in Lagos last week, said the audit would
critically review and challenge, where appropriate, the annual
accounts and tax filings of the oil companies.
Already, she said the National Stakeholders Working Group
(NSWG) has engaged the services of an international audit
company, the Hart Group, to carry out the audit assignment.
“The same auditors would be in a position to prepare
a credible annual statement, on both a disaggregated and aggregated
basis, of all revenues by the government.
“It involves looking at the books of relevant government
agencies that have a role in collecting the sector’s
revenue in the form of royalty, taxes, etc as well as the
Central Bank where the monies are deposited in government
accounts,” she explained.
According to her, in the end standard templates would be developed,
which would be the basis for a framework for future reporting.
Mrs Ezekwesili stated that in the context of the financial
audit, the NSWG would ensure regular public reporting of the
payment and revenue data.
Her words: “The statements prepared by the independent
auditors would be regularly and automatically published on
a timely basis in formats and through media easily accessed
by the public in Nigeria and internationally.”
The minister said to enhance accountability, statements on
payments to and revenues received by the government would
be disaggregated with payments going into the Federation Accounts
separated into their federal, state and local components.
This, she said, would be achieved through applying existing
constitutional sharing formulae and payments to agencies such
as the Niger Delta Development Commission (NDDC).
Explaining the nature of the other types of audit, she said:
“The process audit would concentrate on the process
by which the affairs of the sector is handled and whether
this provides an adequate basis for protecting the interest
of the Federal Government in such matters.
“The physical audit is expected to comprehensively report
the amount of crude oil lifted, produced exported, lost etc.”
She said that the report of the comprehensive audit on the
extractive sector in the country is expected to be a very
important milestone in their work in the NEITI.
She also said that one obvious challenge they had in the course
of carrying out their work in the NSWG was that many Nigerians
have limited knowledge of the operations of the oil and gas
as well as the mining sectors.
The situation, she said, has led to skepticism and apathy,
adding that “it became obvious that we needed to embark
on aggressive sensitisation, knowledge sharing and perception
re-engineering.”
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