… the Probe that Shouldn’t Have Been
By Ben Ekori
The Nigerian Senate has moved to distance itself from actions taken by its Committee on Public Accounts during an ongoing investigation into alleged discrepancies in the audited accounts of the Nigerian National Petroleum Company (NNPC) Limited, highlighting growing debate over the interpretation of the state energy firm’s financial records and the conduct of the inquiry.
The probe, which began last year, stems from audit queries raised by the Office of the Auditor General of the Federation concerning two balance-sheet items in NNPC’s audited accounts covering 2017 to 2023. The entries, listed under “accrued expenses” and “receivables,” amounted to approximately N103 trillion and N107 trillion respectively and were described by auditors as “unreconciled.”
Since the Senate Committee on Public Accounts launched its investigation, the matter has generated significant public attention, with some lawmakers characterising the figures as “missing” or “unaccounted for” funds. NNPC officials, however, have consistently argued that the figures represent standard accounting entries that require reconciliation rather than evidence of financial losses or missing assets.
The dispute intensified last week when Senator Adams Oshiomhole, a member of the committee, described NNPC as “a den of thieves” during a hearing and supported efforts to issue a warrant of arrest against former Group Chief Executive Officer Mele Kyari. The comments and proposed action drew criticism within the Senate.
At a subsequent plenary session, Senate Leader Opeyemi Bamidele argued that the committee had exceeded its authority. He noted that, under Senate rules, the power to issue warrants of arrest rests with the Senate President and requires ratification by the full chamber. The Senate subsequently dissociated itself from the committee’s actions and called for the withdrawal of the remarks made against NNPC.
The controversy has also reignited discussion over the technical accounting issues at the centre of the investigation. According to NNPC management, accrued expenses represent financial obligations incurred but not yet paid, while receivables reflect amounts owed to the company by customers and counterparties.
NNPC executives have maintained that the Auditor General’s query was intended to verify supporting documentation for both categories rather than to suggest that the combined amount was missing. They argue that, under standard accounting practice, accrued expenses and receivables should not be added together to determine financial exposure but assessed separately to establish the company’s net position.
During earlier hearings, NNPC Chief Financial Officer Dapo Segun reportedly explained that the disputed figures reflected accounting balances requiring reconciliation and documentation rather than cash holdings. Former Chief Financial Officer Umar Ajiya reiterated the position during last week’s proceedings, questioning how N210 trillion could be deemed missing from a company that reported profits of roughly N3 trillion during the period under review.
While the Senate’s action in dissociating itself from the Committee’s overreach is commendable, the occasion should have also served as an opportunity to take a deeper look at the modus operandi of the Committee which has turned a simple investigation of unreconciled funds into an inquisition about “missing and unaccounted funds”. It must be pointed out that what played out at the Committee’s hearing last week was not a one-off thing. In fact, that has been the norm. At the beginning of the investigative hearing early last year when the Chief Financial Officer of NNPC, Mr Dapo Segun, tried to explain the crux of the matter, he was hushed down in a similar way that the Committee did to Ajiya last week. If the Committee members had patiently listened to the CFO’s explanation, they would not have continued on the path of looking for what was not missing.
For those who have not been following the investigative hearing, Segun’s explanation was that in accounting, accrued expenses are not added to receivables, rather they are netted off from receivables to arrive at the true financial position of the company. To understand that explanation, a bit of definition of the terms “accrued expenses” and “receivables” would suffice. The simple dictionary meaning of “accrued expense” is: “financial obligations a business has incurred but not yet paid, for which it may not have even received an invoice”. On the other hand, “receivables” are: “claims for money owed to a business by customers or clients who purchased goods or services on credit”. In very simple terms, accrued expenses are monies or debts that a company owes, while receivables are monies or debts that others owe the company.
What the above means is that the N103tr under accrued expenses was the amount of financial obligations NNPC owed at that time. The N107tr under receivables in that same period means that NNPC was being owed that amount by its customers. The reconciliation query by the Office of the Auditor General was simply to seek documentation to verify what the company owed and what it was owed. That was the point that Mr. Segun tried to make from the onset of the investigation. His position was that the right thing to do was to net off the accrued expenses from the receivables. He argued that it was disingenuous for the Committee to add up the two items and tag it “missing or unaccounted funds”.
After more than a year of harassing NNPC and its serving and retired officials, it has become clear that the Committee was simply on a wild goose chase. That was the message handed down by Ajiya when he asked out of frustration at last week’s investigative hearing how it was possible for N210tr to be missing from a company that only made a profit of N3tr in the year under investigation. But like the proverbial sanitary inspector who chose to look for mosquito larvae under the bed, the Committee decided to overreach itself by issuing a warrant of arrest for the former GCEO.
The episode underscores broader challenges facing Nigeria’s public accountability institutions as they seek to balance oversight of state-owned enterprises with adherence to due process and technical financial standards.
For investors and international observers, the dispute highlights the importance of transparent financial reporting, rigorous audit processes, and clear communication of accounting practices in state-owned companies that play a central role in the country’s economy and energy sector.
As the investigation continues, attention is likely to remain focused not only on NNPC’s financial records but also on the Senate’s approach to parliamentary oversight and corporate accountability.
