NEITI to audit utilisation of 13% derivation funds


The Nigerian Extractive Industries Transparency Initiative, NEITI, has said its new fiscal allocation and statutory disbursement audit exercise covering 2007 to 2011 will examine the issues surrounding the controversial 13 per cent oil derivation allocations to benefitting states.

NEITI Executive Secretary, Mrs. Zainab Ahmed, stated this yesterday in Abuja at the template workshop on fiscal allocation and statutory disbursement audit.

The derivation funds comprise 13 per cent of federally allocated revenue payable to the oil producing states.

The executive secretary, represented by the Director of Communications, Mr. Ogbonaya Orji, said the decision to conduct the audit became necessary following mutual suspicion and distrust existing among the federal, states and local governments over “who gets what and how.”

She said the workshop was organised to acquaint Federal Government agencies and other government entities expected to be covered by the audit on the templates designed for the exercise.

“The audit is expected to cover actual disbursements of funds accrued to the Federation Account from the oil and gas sector to beneficiaries such as federal, state, local governments and other relevant agencies as well as tracking actual application of these funds.

“The audit will also examine the issues surrounding 13 per cent derivation to benefiting states,” Ahmed said.

The NEITI boss explained that the general application of the audit exercise of the statutory allocation received and how they were disbursed and applied would be examined from records of the Niger Delta Development Commission, NDDC; the Petroleum Technology Development Fund, PTDF and the Central Bank of Nigeria, CBN.

She added that the exercise would also cover Federal Government’s share of derivation; administration and application of the excess crude oil account and the 13 per cent derivation allocation to states and local government councils and ecological funds disbursement and utilisation.

NEITI added that it had engaged the service of a reputable firm, SIAO, an indigenous professional audit and tax assurances firm through a transparent and competitive bidding process.

The Chairman, Revenue Mobilisation Allocation and Fiscal Commission, RMAFC, Mr. Elias Mbam, noted that to promote good governance and socio-economic development in the country, fiscal allocation and disbursement of the extractive industries revenue from the Federation Account to beneficiaries should not only be just and fair, but must be fully accounted for.

Mbam said the workshop was in line with the RMAFC ideals on total disclosure, accountability and transparency in government business and urged stakeholders to use the knowledge gained from the workshop to promote accountability in fiscal allocations and disbursement.

He said: “It is a common knowledge in Nigeria that revenue from the extractive industry is a major contributor to the Federation Account.

“The sector contributes about 80 per cent of the revenue accruing to the Federation Account. Accordingly, in order to promote good governance, unity and socio-economic development of our country, fiscal allocation and disbursement of the extractive industries revenue from the Federation Account to the beneficiaries should be just, fair, equitable and fully accounted for.

“I, therefore, wish to enjoin all the participants to be actively involved in all the deliberations of the workshop, it is my hope that the knowledge you will gain from this workshop would be used to promote transparency and accountability particularly in fiscal allocations and disbursements of the extractive industries revenue from the Federation Account.”


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