The Auditor-General of the Federation (AuGF) has revealed that the National Insurance Commission (NAICOM) underreported its 2022 revenue by N4,047,762,249.90 and made a duplicate payment of N248 million to RT Briscoe for a batch of vehicles.
In the Auditor-General for the Federation’s report for the 2022 financial year, the nation’s auditor claimed the commission worked with its external auditor to alter figures in its audited financial statements, noting that this suggests weak internal controls.
The allegations stemmed from the 2022 audited financial statement of the commission, which covered the tenure of Sunday Thomas, the former Commissioner of Insurance, who was appointed in 2020 but was not reappointed by President Bola Tinubu’s administration after the expiration of his first term in 2024.
The insurance regulator has declined to comment on the allegation, which could cast a shadow over Thomas’ tenure.
Thomas, a seasoned insurance professional with over 40 years of experience in leadership, regulatory, and advisory roles, retired from the commission after Steve Oronsaye’s report set an eight-year tenure limit for directors in ministries, departments, and agencies (MDAs).
He served as Director-General of the Nigerian Insurers Association (NIA) starting in 2010, became Deputy Commissioner of Insurance (Technical) at NAICOM in April 2017, and later held the position of Commissioner for Insurance from May 2020 until April 2024.
InsideBusinessNG reached out to Insurance Commissioner Olusegun Omosehin for comments on allegations from the Office of the Auditor-General for the Federation, but the request was ignored.
The Office of the Auditor-General of the Federation noted a revenue understatement, pointing out that NAICOM’s source document for 2022 showed N9,241,026,112.90, while its audited financial statement for the same year reported earnings of only N5,193,263,863.00.
The Auditor-General’s report noted that the undisclosed revenue from the conflicting figures totaled N4,047,762,249.90, an action it says violates paragraph 112 of the 2009 Financial Regulations, which requires accounting officers to ensure the accurate collection and proper accounting of all public funds received and spent.
NAICOM, in its defence, explained that there was no intentional effort to understate revenue for that year. The audit had only reflected the agency’s operating fund, excluding the N2,542,057,034 Education Fund and the N1,694,704,689 Security and Insurance Development Fund, which were reported separately.
The commission, referencing pages 25, 28, and 31 of the Financial Statement, pointed out that combining the two funds, totaling N4,236,761,723, confirms that no amount was understated.
However, the gap between the N4,236,761,723 stated in NAICOM’s defense and the N4,047,762,249.90 allegedly under-remitted by the commission may have prompted the Auditor-General to dispute the commission’s position and uphold the query against the insurance regulator.
Due to discrepancies between the commission’s defense and the alleged unremitted funds, the Auditor-General has asked the commission to submit the trial balances, general ledger, and audited accounts for the years 2020, 2021, and 2022 to the Public Accounts Committees of the National Assembly.
The commission was also asked to provide reconciliations of the trial balances, general ledger, and audited accounts for 2020 to 2022, remit the shortfall of N4,047,762,249.90 into the Consolidated Revenue Fund, and present evidence of the remittance to the federal lawmakers.
The Auditor-General warned that failure to comply would trigger sanctions for not collecting and accounting for government revenue, as well as gross misconduct, as outlined in paragraphs 3112 and 3129 of the 2009 Financial Regulations.
Regarding the double payment for vehicles, the Auditor-General noted that NAICOM breached the provisions in paragraphs 415, 603, and 708 of the 2009 Financial Regulations, revealing that NAICOM made duplicate payments of N247,999,995.00 to RT Briscoe for delivering two 2021 Toyota Hiace vans and six 2020 Toyota Hilux vehicles.
“The sum of N247,999,995.00 was paid twice to the company on 31 March 2022, through Remita Reference Nos 640142584 and 640139229 in Batch Nos 4560 and 4561 respectively”.
“The double payments implied the loss of N247,999,995.00 to the government, and the procured motor vehicles were not recognised as items of Property, Plant, and Equipment in the audited Financial Statement of the Commission, thus misleading users of the financial information”, the Auditor-General stated in the 2022 Report released recently.
NAICOM explained that there was no double payment, as the initial transaction on the TSA platform failed, was reversed, and then later reprocessed and successfully completed.
The Auditor-General, maintaining that his findings still stand after dismissing NAICOM’s defence, called on the Commissioner for Insurance to explain to the Public Accounts Committees of the National Assembly the duplicate payment of N247,999,995.00 and the omission of motor vehicles from the Property, Plant, and Equipment category in the 2022 audited financial statements.
The insurance regulator was asked to provide the bank statement for the payment, while federal lawmakers were tasked with recovering and ensuring the remittance of the duplicate payment of N247,999,995.00 to the Treasury.
The Auditor-General instructed the insurance regulator to send the bank statement for the payment, along with proof of remittance, to the Public Accounts Committees of the National Assembly; otherwise, the sanctions for irregular payments outlined in paragraph 3106 of the 2009 Financial Regulations would apply.
By Badejo Ademuyiwa
