Nigeria’s Power GenCos Reject Sector-Wide Forensic Audit
Nigerian power generation companies (GenCos) have faulted the demand by their sister sector, the electricity distribution companies (DisCos) for an all-inclusive forensic audit of the power sector.
They argued that as the revenue-receiving arm of the sector, the Discos cannot request that other players be audited.
The Executive Secretary of Association of Power Generation Companies (APGC), Dr. Joy Ogaji, said that a system stress test, not forensic audit, is what the sector needs. Discos had called for an all-inclusive forensic audit as a condition to guarantee their participation in a planned audit of their operations by the federal government and the World Bank.
There are speculations that the GenCos may have recommended to the Nigerian Electricity Regulatory Commission (NERC) to disband the practice of cash collection and multiple payment accounts by the DisCos.
The DisCos urged NERC to institute a uniform payment platform to track the Nigeria’s revenue inflow. Ogaji, in response to the discos, said Discos call for a sector-wide forensic audit is laughable; they collect and keep the market’s monies. The DisCos don’t do that, so why do they ask for everyone to be involved in the planned forensic audit?”
“Forensic audit is about financial propriety, not operational activities. What are they afraid of? Why are they in court to stop the process? If they call for a system stress test, to show the capacities of each participant in the market, then it is understandable.
In fact, that is what the sector needs now. Let the GenCos, DisCos and TCN show the capacities they all claim to have. How can you forensically audit me when I don’t collect market money?,” stated the GenCos.
But to engender a transparent business environment that facilitates and supports NERC’s regulatory oversight functions, the GenCos recommended the development of a platform for financial performance benchmarking.
They explained that a proposed platform – Revenue Stream Audit Paradigm (TRAP), would be a methodology that would ensure, in the first instance, that multiple revenue accounting by the Discos is eliminated.
TRAP, according to the GenCos, will equally seek to benchmark energy delivered against revenue collected as a measurement of revenue collection efficiency of the Discos.
“This ostensibly will enable a locked-step approach, from a tariff perspective, towards the determination of revenue requirements for the Discos. TRAP, therefore, seeks to institutionalise transparency as a core paradigm in Disco revenue accounting and reporting. TRAP also presents an opportunity for the development of a national e-payment portal through which customers can pay for services.
“Currently, the DisCos utilise multiple payment platforms for services, including payment for energy consumed. This has resulted in the creation of multiple accounting streams for the different payment channels. This presents a loophole for unscrupulous operators to divert and hence under-report revenue inflows,” the GenCos stated.
By Chibisi Ohakah, Abuja