The Damming KPMG report that the government of Nigeria is hiding from it's people

On Thursday December 1, the Minister of Finance, Ngozi Okonjo-Iweala, cringed when the senate joint committee investigating the management of funds set aside for petroleum subsidy handed her a seven-day ultimatum to produce a secret forensic report on the Nigerian National Petroleum Corporation in her custody.
The audit (click to download): Consolidated Detailed Findings-v1, done for her ministry by renowned audit and advisory consultancy, KPMG, which exposed the massive financial malfeasance and monumental corruption in the NNPC, is one document the federal government, the petroleum ministry and the NNPC have worked hard to conceal for a little over a year now.
The report, which could trigger a fierce face-off between the federal and state governments, is one of the most closely guarded secrets in Nigeria today. It contains shocking details of how the NNPC, and by implication, the federal government has been swindling the states.
So when the committee requested Mrs. Okonjo-Iweala to produce it, she became a bit uneasy, knowing that doing so might embarrass the administration and sparked some troubles for the NNPC, a source close to her told the Times. Initially the minister didn’t make any commitment, but when pressed by committee members, she reluctantly acceded to the request.
It is not known at press time whether she has sent the document to the committee. Contacted yesterday, her spokesperson, Paul Nwabuikwu, said he had no information on the matter. Calls to the chairman of the senate joint committee, Magnus Abe (PDP, Rivers), were unanswered. But as at noon today, long after the ultimatum given to Mrs. Okonjo-iweala expired, a source close to the committee said the minister was yet to make the report available. He said there was high-powered lobby by the NNPC not to make the document public.

The damning report
But the Times has scooped the report for you in case the minister fails to produce it or does so to the committee in camera.
As far as the 41-page report is concerned, the NNPC is a cesspool of monumental corruption and fraud. The report detailed the corporation’s sharp business practices, violation of laid down rules and regulations, illegal deductions of funds belonging to the state, and failure to account for several billions of naira that should go to the federation account.
The agency, the report says, has also severely defrauded our country in subsidy claims. Auditors found that between 2007 and 2009 alone, the NNPC over-deducted funds in subsidy claims to the tune of N28.5bn. It has not been able to account for the sum ever since.
The over-deduction from its remittance to the federation account for 2010 and 2011, believed to be in several billions of naira, is not captured in the report.
The Federal Government, through the Federal Ministry of Finance, hired KPMG and another Nigerian auditing firm, S.S. Afemikhe & Co., in July 2010, to look into the books of the corporation following allegations of “wrongful deductions at source by the NNPC to fund its operations” by the 36 state governors.
There were also concerns at the time that “the procedures for managing and reporting the country’s crude oil and gas revenues are opaque and characterized by gaps, overlaps and inconsistencies in the role of key parties responsible for the assessment, collection and reporting on these revenue streams.”
Officials of the petroleum ministry and the NNPC, a source at the finance ministry disclosed, developed cold feet after the auditors were sent in, and indeed tried hard to frustrate the representatives of the two audit firms by failing to supply evaluation criteria for commercial bids submitted in respect of petroleum products importation.
Believing that would turn the auditors away, our source further explained, the corporation also failed to provide them with other relevant documents such as the criteria for allocation of products and product volumes to importers/suppliers and periodic prequalification list of approved products importers/suppliers.
But in spite of the difficulty they faced, the auditors were able to determine that the NNPC had been anything but transparent in the management of our country’s oil resources.
The report that emerged from the audit was just too damning that the leadership of the petroleum ministry, the NNPC and some few other elements in the Federal Government have worked hard to keep it away from the 36 state governors and federal lawmakers in particular and Nigerians in general.

Stealing the states blind
In what is likely to anger state governors, the audit established that the corporation was in the habit of arbitrarily estimating subsidy claims and then over-deducting funds from proceeds of domestic crude sales.
“For example,” the report said, N25bn was deducted as subsidy estimate for September 2009 from domestic crude sales proceeds while PPPRA approved a subsidy of N23.8bn. N35bn was also deducted as subsidy estimate fro November 2009 but PPPRA approved of N21.3bn.”
The auditors’ analysis indicates “over-deduction for these two months amounted to N14.9bn. However, only N4.2.bn was swept into the Federation Account by the NNPC as adjustment for subsidy claimable in the two months.” That is beside the N11.8bn subsidy claim the NNPC claimed it paid for imported products that didn’t reach consumers.
State governors have always complained that the NNPC was shortchanging them through illegal deductions from revenues payable to the federation account.

Fraudulent underhand tactics
Over-deduction is however not the only way the corporation is defrauding the federal and state governments. According to laid down regulations, the NNPC is invoiced in dollars for domestic crude allocations but is expected to remit the equivalent naira value to the Federation Account. But auditors found to their chagrin that in doing that, the corporation used exchange rates far lower than those published by the Central Bank of Nigeria.
Using this “fraudulent underhand tactics”, the NNPC succeeded in cheating the three levels of government of a whooping N85.2bn in three years – N25.7bn in 2007, N33.8bn in 2008 and N26.7bn in 2009.
When the auditors requested explanations for these exchange rate disparities, the NNPC claimed it obtained the exchange rates it used from the CBN via telephone.
The report also severely indicted the NNPC over the shoddy and non-transparent manner it renews crude sale contracts every year. The auditors noted that “evaluation criteria for renewal of contracts are not clearly stated in the contract document”, and that the selection exercises were based on individual discretion and wrong assumptions and criteria.”
The NNPC claims that renewal of contract was based on performance of off-takers (buyers). But the auditors observed that the basis and process for determining performance were not clearly defined.
The auditors wondered why in 2007 and 2008, some companies not on the approved list of buyers for that year were allocated crude, a practice the examiners believe had led to crude being sold to non-credible buyers, even with relevant guarantees and safeguards not implemented.
Specifically the auditors queried the allocation of crude to Ovlas Trading (2, 852,316 barrels in 2007 and 906, 269 barrels in 2008) Petrojam (2,818,914 in 2007), Oil Fields (950,166 barrels in 2007) and Zenon (906,000 barrels in 2008) even when they were not on the list of authorized buyers for that year.
Contracts for the importation of products, the auditors wrote, were also routinely awarded without regard for approved guidelines and procedures. “We observed that contracts for the importation of petroleum products were awarded to companies and suppliers not listed in the approved prequalification list used for the fourth quarter 2008 importation,” the report noted.
The auditors specifically queried the award of contracts in that manner to Astana Oil Corporation Limited, Natural Energy and Oando, when they were not prequalified for patronage that year.
Among other forms of misdemeanour, ranging from poor accounting to shoddy record keeping, the auditors also indicted the corporation for leaving its own storage facilities, unused, and then proceeding to incur additional cost from leasing of third party storage facilities.
The auditors reported that DPK tanks (with storage capacity of 18,000 cubic metres) at the PPMC depots within the Mosimi Area had not been used for three years even though there were in good condition. Yet the corporation, the examiners added, had been leasing storage facilities from third parties.
The spokesperson of the NNPC, Levi Ajuonuma, declined to comment on the report, saying he had nothing to say until the government releases it officially.

( culled from : Premium times and African spotlight )

Open letter to Pastors on Fuel Subsidy #OccupyNigeria

Dear Sir,

Open Letter to My Pastor: What Would the Prophets Do?
For the hurt… of my people am I hurt, I am black; astonishment hath taken hold on me.
Jeremiah 8: 16 

Know ye not that we shall judge angers? How much more things that pertain to this life?
1 Corinthians 6: 3 

Thou shall not muzzle the mouth of the ox that treadeth out the cord… this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope.
1 Corinthians 9: 13 

I write you this letter because I am a Christian and because I sit under your ministration – and I listen to God’s Word through you constantly.

Our nation is in crisis. The people have been subjected to a government policy – fuel subsidy removal, alongside a debilitating cost of government – that impoverishes us. Yes, the current trend of subsidy payments is unsustainable, but visible cuts must start from government with clear steps to deal with the rot in the oil sector. Leadership is by example, not by decree! Many of us affected are here in church today – we give offerings, we work for the church, we answer when you call. Now, we need you to answer our call.

I have waited for you to offer guidance; waited for you to speak to us; waited for you to share in our pain the way the prophets from Elijah to Nehemiah have; waited for you to speak up against bad governance and selfish leaders; but you have not.

We have been on the streets from Monday, and will be on the streets in greater numbers from tomorrow – but have not heard the sound of your voice, clear and strong.
This is not the first time sir. At crucial times in our nation’s life – the disappearance of our last president, the drive to get out the votes, etc – I have found the voices of many ministers missing. I don’t mean bland admonitions about corruption and good leadership; I mean actual statements that you think of your congregation, and you feel with them.

This is not right. This is not what the Bible says.

I don’t need you to be Martin Luther King Jr sir; you don’t have to be Matthew Kukah. All I require is for you to speak for what is right. Can you imagine how powerful it would be if you and your contemporaries lead the congregations of all the churches and speak against this bad governance decision on Monday?

The Bible commands you to, sir.
See Proverbs 31: 9:
Open your mouth, judge righteously; defend the rights of the poor and the needy. 

Didn’t Bishop David Oyedepo once say, “A closed mouth is a closed destiny”? Some of you might like the President personally, especially as he is a believer, but this is about Nigeria and Nigerians; not about Goodluck Jonathan.
I am not sending you this letter because you are an easy target – in fact in Nigeria these days; pastors are the hardest people to speak with. It is your Biblical duty to speak, and to act.
Jesus avoided the secular realities of his day, but none of His disciples did – and, sir, you are not Jesus. The prophets and the apostles were vocal about governance: Jeremiah, Nehemiah, Elijah, Paul to mention just a few.
And what am I even saying? Jesus called out the leadership of his time! In Luke 13:31; he was absolutely clear what he thought about the Roman leader Herod: he called him a “fox”.
You are influential and powerful by His anointing. Imagine if all of you come together and say no to this wicked policy! With or without you we will fight, and by God’s grace, we will win; but with you we can win even bigger – and quicker.
What do I want you to do, sir? Please see below:

1. Do not give bad leaders comfort through silence – speak up and take a stand on the issue of fuel subsidy removal.
2. If you support it, speak up; if you are against it, announce your support for Nigerians who are peacefully protesting and encourage other members to join. You should also join the protests – it will be a powerful boost.
3. For those members that cannot join, encourage them to visit sites such as www.eienigeria.org to get information as to how they can support this movement.
4. Your church should support the efforts of many Nigerians – who are using their meager resources to support this effort. Provide materials: buses, food, drinks, phone access, and anything else that can make this a success.
5. It is too late for these announcements to be made in church, but can you please help spread the message through the cell meetings/fellowship and weekly services this evening and through the week. Also, if the President doesn’t revert to the old price of petrol per litre, then this message will still be relevant for next Sunday, as we will still be on the streets.

I beseech you sir to listen to the warning that Mordecai gave Esther when King Ahasuerus began a reign of oppression against the children of Israel (Esther 4: 14): “Think not with thyself that thou shalt escape in the king’s house, more than all the Jews,” he said. “For if thou altogether holdest thy peace at this time, then will relief and deliverance arise … from another place, but thou and thy father’s house will perish.”
 
As book of 1 Timothy 1:7 reminds us: “God hath not given us the spirit of fear; but of power, and of love, and of a sound mind. 

The times call for power and a sound mind.
Your Son-in-the-Lord,


Chude Jideonwo

Tracking Corruption : will this work in Nigeria?

 

We all know that in Nigeria corruption is a major problem, in my opinion, it is one of the major reasons we aren’t developing as a nation. Everyone wants a piece of the national cake, and instead of adding value and getting paid for it, most simply rely on getting a kickback in exchange for granting access.

Even though we still have a long way to go in the war against corruption, hopefully this new website, Corruption Tracker would help us expose those who partake in this shameful practice, thus slowly and steadily eradicating corruption altogether.

By collecting and making public reports of sticky fingered officials and lawbreaking governments, the website hopes to shame people out of their bad behavior, or compel citizens to act.

If a government official forces you to engage in a bribe, who do you tell? It’s not an easy question to answer, especially in regions where corruption is rampant.Corruption Tracker - http://www.corruptiontracker.org/, a startup launched at Singularity University‘s graduation, aims to shine a light on corruption attempts in the hopes that it will cause the guilty parties to change their nefarious ways. Sunlight is, of course, the best disinfectant.

The website (http://www.corruptiontracker.org/) , which maps reports of corruption around the world, has already gathered ahandful of reports from users, but it’s also cross-referencing existing databases from anti-corruption organization Global Integrity. While the site might now seems like a list of petty grievances, it will start being more effective as it grows in popularity. “We need at least 10,000 reports to make a truly global database,” says Corruption Tracker team member Dr. Clarence Tan.

Corruption Tracker is already making a concerted effort to verify its corruption claims. The startup is taking a three-pronged approach: relying on regional expert volunteers, leveraging artificial intelligence techniques to map corruption attempts around the world (Corruption Tracker is still working on this), and using the power of crowdsourcing. If enough people are reporting corruption, they figure, it’s probably happening.

Tan cites the example of Ushahidi to show how well crowdsourcing can work. During the recent Arab Spring uprisings, the crisis-mapping website waited until it received three text messages or two pictures from different sources before reporting an incident. Ushahidi later went out and checked on these reports and found that 91% were accurate. This bodes well for Corruption Tracker–once it reaches critical mass, verification will largely take care of itself.

So far, Corruption Tracker’s reports mostly seem to be political in nature (one recent report from India: “Village Sharpanch Bhanushali of Shilatne Village is encroaching on private Property and setting up village play ground with slides and jungle gym and is demanding to buy property at discounted rate of…and threatening ‘or else encroachment will continue’”.) But eventually, Corruption Tracker anticipates covering issues related to the private sector, utilities, education, health care, and more.

“In three to six months when we see what kind of critical mass we get, we’ll decide our next steps,” says Tan. [The site] is word of mouth, but that can be a very powerful tool.”

( culled from :1976ad.com)