The Nigerian National Petroleum Company Limited (NNPCL) is under scrutiny after the Auditor-General flagged its failure to properly account for £14.3 million spent on its London office, according to the latest 2022 audit report.
The findings, described as interim audit observations, demanded explanations from the national oil company. Although NNPCL responded, the Auditor-General said several of the explanations were untenable.
According to the report, the £14.3 million was expended in the 2021 financial year. However, audit officials said they were denied access to documents needed to verify how the funds were managed, whether expenditures followed due process, or if they complied with principles of economy as required under the Financial Regulations (FR 2009).
The report cited violations of financial rules guiding expenditure management, including:
Paragraph 112 – requiring accounting officers to ensure proper internal controls for revenue and expenditure.
Paragraph 415 – mandating strict economy in public spending, stating “money must not be spent merely because it has been voted.”
Paragraph 603(1) – requiring all payment vouchers to carry full details and supporting documents such as invoices and purchase orders.
The Auditor-General warned that the opaque spending created risks of diversion and misappropriation of public funds, blaming the issues on weaknesses in NNPC’s internal control system.
NNPCL told auditors that the London office is a service unit with an approved annual budget, and that the £14.3 million expenditure was executed in line with operational and financial needs.
The company added that the audit query did not specify the transactions being questioned, making it “challenging to provide tailored evidence.” It insisted that the London office maintains detailed records, which can be made available on request.
NNPC also said it remains committed to strengthening internal controls to ensure transparency and compliance.
Despite the company’s defence, the Auditor-General said the response was not satisfactory, and maintained that the findings remain valid until NNPC implements the audit recommendations.
The report directed the Group Chief Executive Officer to recover and remit the £14.3 million to the treasury.
If not, sanctions for irregular payments and failure to account for public funds—as stipulated in Paragraphs 3106 and 3115 of the Financial Regulations—should apply.
The new audit report follows a pattern of accountability concerns around NNPCL.