New Telegraph

NPA: Agency mired in financial infraction

More queries on the 2017 audited accounts of the Nigerian Ports Authority (NPA) have been issued by the Office of the Auditor- General of the Federation, BAYO AKOMOLAFE reports

Since the advent of the democratic government, agencies in the Nigerian maritime industry deal with large amounts of money and engage in numerous transactions, thereby making them prime targets of fraud by government officials. Over the years, series of financial frauds have been discovered at Nigerian Maritime Administration and Safety Agency (NIMASA), Nigeria Customs Service (NCS) and Nigerian Ports Authority (NPA). For instance, as financial mismanagement keeps on recurring in the industry, the management of NPA and Transportation Minister, Rotimi Amaechi, have been asked to appear before the House of Representatives Committee on Public Accounts next week, July 8, to answer a new query issued by the Accountant General of the Federation.

Query

The queries include standalone financial statements, noncurrent assets (depreciation, addition to fixed assets, property, plant and equipment, and interest in joint ventures), current assets (cash and cash equivalent, trapped fund in Enterprise Bank, inventories, trade receivables, etc.), liabilities, statement of profit and loss, and other comprehensive income, expenditures and administrative expenses. The Auditor General, Adolphus Aghughu, in an audit report sent to the National Assembly dated May 24, 2021, demanded explanation from the management of the Authority on its audited accounts, which he said was submitted to his office on February 22, 2019, for comment, in accordance with the provisions of the constitution. Worried by the huge discrepancies in the financial statement, especially the N65.763 billion spent on fixed assets, Aghughu said that the NPA management should furnish the analysis of the assets acquired during the year, showing suppliers, evidence of ownership, gross amounts, outstanding amounts, taxes deducted and remitted to the relevant tax authority and the current status of the assets.

Plant and equipment

Also on property, plant and equipment, on which N390.581 billion was spent, the auditor general said: “The carrying amount of the property, plant and equipment and properties on lease was qualified in the auditor’s independent report, because they were unable to obtain sufficient and appropriate audit evidence to confirm the completeness, existence and valuation of the carrying amounts.” In view of the above, the query added that the management should provide the schedules of movable assets purchased by the concessionaires per the various lease agreement and furnish the list of assets in use and projects in progress acquired or being executed by the concessionaires for the Authority under the ports development programmes of the lease agreements for audit scrutiny. Further, Aghughu asked the management to provide an updated non-current assets register showing the dates of purchase, location of assets and amount depreciated to date, adding that the management was also to provide a list of property, plant and equipment transferred to Continental Shipyards Limited at inception as part of NPA’s capital contribution and furnish the list of various assets, including buildings disposed by the Authority in the last three years.

Bank balances

Furthermore, Aghughu demanded a schedule of bank balances showing the names and locations of the banks at which cash and cash equivalent from current assets of the Authority were maintained, the individual account balances and the respective comparative figures. He also asked for a detailed list of the subsidiaries and the bank balances resulting in the observed total difference of N168.46 million in the bank balances within and outside Nigeria between the group and the Authority, which represent the balances of the subsidiaries. Also, the accountant general reported that funds amounting to about $3.231 million may have been trapped in Enterprise Bank as the report from the NPA management showed that there was no movement in Enterprise Bank account with Number 6003605768 during the year. It added: “The balance has not changed from $3.231 million for more than two financial years, asking the management to provide the current status of this bank balance.”

Staff home

The status of the Staff Home Ownership Scheme (SHOS) as well as the N1.5 billion deposited as initial takeoff fund with Aso Savings and Loans Plc was also queried, which Aghughu said served as an agent for the creation of mortgages and the subsequent collections of repayments on the same mortgages, adding that NPA later severed relationship with the bank, following Federal Government’s directive on Treasury Single Account implementation in 2015.

Contracts

He said an audit examination showed that NPA made an advance payment of about N4.479 billion to contractors and demanded that the name of the individual contractor, nature of the contract, age analysis of each of the contracts and reasons for not sanctioning in line with the Financial Regulation 3104(1). In addition, the auditor general demanded explanation from NPA on the current status of about N2.334 billion received from shipping companies in 2013 as tracking fees, which was deposited with First City Monument Bank and was supposed to have been transferred to the Economic and Financial Crimes Commission in 2017. On terminal operators, Aghughu noted that while one of the terminal operators quoted an indebtedness of $513,150.51, NPA records were reading $4.49 million, showing a difference of $3.97million. He added that while the second operator, Apapa Bulk Terminal Limited (ABTL), quoted $619,372.99, the NPA records showed $2.38 million variance, with a difference of $1.76 million. Apart from a revenue of N239.48 billion reported, for which the office is demanding a breakdown into their various components for audit scrutiny, Aghughu also queried under-remittance of operating surplus by the Authority in 2017, noting that the operating surplus for the year 2017 was N76.78 billion and N42.41 billion was appropriated for the year. Aghughu also queried what he called excessive increase in administrative expenses, with insurance and licenses increasing from N1.182 billion in 2016 to N3.809 billion in 2017, an increase of about 222.1 per cent, while professional charges rose from N638.482 million in 2016 to N7.208 billion in 2017, representing 1,029 per cent. Similarly, cost for repairs and maintenance increased from N209.044 million in 2016 to N1.039 billion in 2017, an increase of 397.3 per cent, while Oslo rebates stood at N6.409 billion in 2017.

Last line

Government should suspended top management of the Authority found culpable for an in-depth investigation.

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