Home News Poor implementation of audit reports is bane of extractive sector – Mittee

Poor implementation of audit reports is bane of extractive sector – Mittee

by Business News Report

Poor implementation of independent audit reports in oil and gas sector is hampering prudent management of the extractive sub-sector’s revenue, Mr Ledum Mitee has said.

Mitee, who is the Chairman of Nigeria Extractive Industries Transparency Initiative (NEITI) National Stakeholders Working Group, stated this in a statement in Abuja.

The statement, signed by Mr Orji Ogbonnaya, NEITI’s Director of Communications said that Mitee spoke at a workshop organised by NEITI in Lagos. He said that the workshop marked the commencement of NEITI’s comprehensive audit of the oil and gas sector activities in 2012.

“If NEITI reports were given the attention they deserved, such issues as confirmation remittances of funds to the Federation Account will not be a subject of controversy,’’ Mittee said. According to him, the current controversy over allegation of unremitted funds should underscore the need by all relevant agencies to give NEITI audit recommendations the deserved seriousness and support. He said that with adequate funding and support, the data collection processes of NEITI would be automated, adding that it would enable the organisation to get real time data which could be resorted to in time of controversy.

“A properly resourced NEITI whose audit recommendations are promptly addressed remains vital not only to our economic wellbeing, but enable the citizens derive needed benefits from our extractive resources,’’ Mitee said. He said that in auditing the oil and gas sector, NEITI was providing critical and reliable information required for the massive reforms in the sector. He said that the audit was being done at a time when the issues of transparency and accountability were attracting increasing attention in the country.

“It is the first audit that could be conducted under the new set of NEITI requirement and standards that were approved in May, 2013.

“It is coming at a time in our national history that the nation is embroiled in a very unfortunate allegation of non-remittance of oil revenues to the Federation Account,’’ he said. Mitee said that the remittances controversy would not have arisen had relevant government agencies and institutions taken NEITI recommendations seriously.

He said the workshop would expose all the 88 oil and gas companies in the country and more than 24 agencies covered by the audit to information and data NEITI required for the audit.

“Specifically, this audit will establish the quantities of hydrocarbons produced, exported or imported, and how the licensing processes and agreements were reached and implemented between government agencies and the companies,’’ he explained.

Mitte also said the exercise would examine and validate accuracy of royalties, tax payments, product importation, fuel subsidy management, measurement processes and pricing of federation equity crude.

According to him, it will also check remittances of funds due to government to the Federation Account, among others. Mitee said that the audit would cover key areas as hydrocarbon flows, volumetric analysis and technical assessment of hydrocarbons streams and examination of procedural system.

“The audit involves data reconciliation, aggregate reporting of hydrocarbons produced and computation of financial implications as well as value analysis during the period under review,’’ he said. Representatives of 88 companies and government agencies including Shell, Chevron, Mobil, Agip, NNPC, CBN, FIRS, DPR and Office of the Accountant-General of the Federation participated at the workshop.

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