The
Senate Joint Committee on the Subsidy Scheme reopened investigations
into the payment of subsidy to oil marketers on Thursday with an audit
firm, KPMG, disclosing that importers were overpaid by N25bn between
January 2006 and June 2010.
A Partner at KPMG, Mr. Dimeji Salaudeen,
gave the details of the transactions after he was compelled to appear
following a subpoena by the committee on Wednesday.
KPMG was appointed by the former
Minister of Finance, Mr. Olusegun Aganga, to audit all subsidy payments
between 2006 and 2010, following allegations of round tripping and sharp
practices in the administration of the scheme.
Reviewing KPMG’s report, Salaudeen, who
was initially evasive in his responses to questions, said a total of
N1.6tn was paid out to participants in the subsidy scheme during the
period being investigated.
According to him, the payments averaged
N460bn annually, with 10 out of the 70 marketers involved getting about
82 per cent of the total payments within the period, adding that only 14
marketers participated in the scheme as at 2007.
He said, “We found out that there was
net over payment to marketers of N25bn. We found out that this was due
to the application of inappropriate documentation; inappropriate CBN
rates and charges; and arithmetic errors.
“We also looked at the role of PPPRA in
the entire subsidy regime and discovered that government’s framework was
weak, a situation where a significant discretion rest with the
Executive Secretary of PPPRA because the board left significant power in
his hands.”
“PPPRA’s internal audit function had a
major weakness. We took a small sample of participants and independently
verified the payments made to them; we discovered certain payments were
made by PPPRA on the basis of documentations that were basically
altered,” he added.
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