Forensic audit reveals massive mismanagement of N6 trillion in NDDC funds

President Muhammadu Buhari has promised that the federal government will take all necessary steps to reclaim the over N6 trillion that was allegedly misappropriated between 2000 and 2019 while the Niger Delta Development Commission (NDDC) was in operation.

To that end, the president has ordered that the NDDC’s forensic audit report be forwarded to the Federal Ministry of Justice for action.

The president, speaking shortly after receiving the Forensic Audit Report from Senator Godswill Akpabio, Minister of Niger Delta Affairs, claimed that there was evidence of substantial compromise in the execution of 13,777 as well as the existence of a “number of NDDC’s bank accounts amounting to 362” that lacked proper account reconciliation.

Mr. Abubakar Malami, the Attorney General of the Federation and Minister of Justice, who received the report on behalf of the president, assured that it would be critically examined before action and implementation.

In October 2019, Buhari ordered a comprehensive forensic audit of the NDDC’s activities from its inception to August 2019, in response to public demand for the commission to be more effective and result-oriented.

According to the president, there was nothing tangible on the ground in the region to show for the vast sums of money committed over the years through the Commission, which many had characterized as a conduit pipe for politicians to siphon trillions of naira.

Despite the vast resources made available to improve citizens’ living standards, the president stated that his administration was concerned about the colossal loss caused by uncompleted and unverified development projects in the region, which prompted the Commission to conduct a forensic audit.

“It is on record that the federal government approved N3, 375, 735,776,794.93 as budgetary allocation and N2,420,948,894,191 as Income from Statutory and Non Statutory Sources between 2001 and 2019, bringing the total figure to around N6 trillion given to the NDDC,” he said.

“It is clear that the federal government invested significant resources in the development of the Niger Delta from 2001 to 2019.” As a result, it is critical for both the federal government and the general public to be fully informed about what has been spent and how it has been spent.

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“The purpose of a forensic audit is to ensure that public funds are used with integrity and accountability. In light of this, the federal government will strategically implement all aspects of the audit exercise that will promote probity and greater prosperity for the Niger Delta Region and Nigeria as a whole,” he said.

Buhari specifically stated that his administration would use the law to address the deficiencies identified in the audit report as needed.
“This will include, but is not limited to, criminal investigations, prosecution, and the recovery of funds that were not properly used for the public purposes for which they were intended, as well as a review of the laws to reposition and restructure the NDDC for efficiency and better service delivery, among other things. All legal due processes will be strictly followed in all of these instances of actions,” he added.

Senator Godswill Akpabio, the Minister of Niger Delta Affairs, stated earlier in the report that the exercise was not carried out to “witch-hunt” anyone, but rather to ensure that the huge sums of money committed to the region each year are justified.

He bemoaned the fact that, despite successive governments’ efforts through the creation of various interventionist programs and projects, the region had remained backwards since 1958.
According to him, the audit committee’s report revealed that over 13,000 projects in the Niger Delta had been abandoned, and that some contractors had returned to site on their own and completed about 77 road projects before the report was submitted. According to Akpabio, the report also included the names and identities of a large number of beneficiary companies.

“The Forensic Auditors established the exact status of all contracts for projects and programmes in all constituent states during the period under review classified as completed, ongoing, abandoned, terminated, taken-over, and non-existent through Field Verification,” he declared.
The auditors also looked for funding gaps, irregularities, mismanagement, and due process violations/conflicts of interest, according to the Minister.

“A Personnel Audit and Review of NDDC’s Governance and Organizational Structure was also carried out,” he added. An operational guideline/manual and a fit-for-purpose organogram have also been developed to aid NDDC’s transformation into a globally competitive development agency.

“Available financial records of the commission were examined with the goal of determining the total amount of funds received by the Commission from all sources, both statutory and non-statutory, as well as the total amount of funds and other resources paid to contractors and the total amount outstanding as debts with respect to such projects during the reference period.

“The auditors have also made policy recommendations in terms of steps that should be taken in the future to ensure that such irregularities and mismanagement are avoided.”
In a summary of the report, the Lead Forensic Auditor, Alhaji Kabir Ahmed, stated that the team recommended managerial and structural changes, the most important of which was the downsizing of the NDDC’s board.
He also stated that, in order to save money, the team recommended that members of the Board be appointed on a part-time basis going forward.

While revealing that oil companies in the country were still behind on their contributions to the Commission, Ahmed suggested that any oil company that defaulted for three years should have their license revoked.

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The report also recommended withholding 50% of the ecological fund at source, which should be paid to the Commission because both the federal and state governments had failed to do so.
In addition, the auditors recommended that the Federal Inland Revenue Service collect funds on behalf of NDDC from oil companies across the country as a measure of effective revenue collection. The report also urged the government to seek restitution from contractors and former and current NDDC employees who have been charged with defrauding the agency.