Auditor goes for illegal recipients of oil billions

The Ministry of Finance and the Bank of South Sudan have illicitly transferred over $55 million of shares from oil revenue meant for local beneficiaries to private accounts for “unknown reasons” in unprecedented disregard of the Petroleum Revenue Management Act, 2013.

A detailed report by the auditor-general—which was presented in Parliament on April 19, 2021, by the head of Finance and Economic Development Committee James Magok Ater—has revealed.

Consequently, the National Audit Chamber has ordered a reversal of all transactions made to parties other than those stipulated in the Act. The two government monetary institutions that helped execute the illegal transfers – must now help undo it.

The Petroleum Management Act, enacted two years after independence, provides that oil-producing regions and communities across South Sudan get certain shares of the oil revenue.

Upper Nile State, Northern Upper Nile, Unity State, and Ruweng Administrative Area were entitled to 2% of the total oil revenue. They got less than that according to an explosive report of the Auditor General.

Unlawful transactions

Data analysed by The City Review reveals that, out of the USD 25.5 million deposited by the Bank of South Sudan (BOSS) to the account of the 2 percenters from 2014 – 2020, a staggering USD 5.1 million was misappropriated.

Accounts belonging to Angelo Beda, Biro Tor Bior, and the Ministry of Finance undeservingly received $38,890, $151,500, and $4,700,615 respectively. Another suspicious transfer worth $279,503 was made to a payee named “Oil Revenue”. All transactions made hereunder were for “unknown reasons”.

The report also details how beneficiaries of the 3% share of net oil revenue, which include Renk Community, Ruweng Administrative, Melut Community, and Maban Community were deprived of their legal rights.

At a period spanning from 2014 to 2020, the Bank of South Sudan deposited $60.1 million to the 3% account. The audit report notes $59.5 million was wired to individual bank accounts and private entities.

A breakdown of the transactions shows that the four communities shared $1.9 million among themselves with more than half of the revenue siphoned by individuals, including $94,861 illicitly sent to Lual Diing Wol – who is allegedly in Germany for treatment.

Other illegal disbursements were sent to accounts belonging to Ohisa Moses Beda ($2.3 million), Bona Alith Arow ($1.2 million) and James Deng John ($170,201). These transactions, the Audit Chamber says, were made in 2015.

Within the same year, the institutions facilitated the transactions of $30,000 to Emmanuel Igau Mayen, $50,000 to Thon Abraham Luk Malual, and $170,000 to William Ruei Lok. Besides the transaction purportedly made medical cover, all these transactions have no justification.

An astonishing finding of the report also reveals that some of these illegal transactions were made to big corporations like the World Bank ($36,824), Equity Bank ($4,000,000), and South Supreme Airlines ($4,130,000).

H.T Global Health, Oryx Energies Kenya Co. Ltd, Keer Marine for River Transport Co. Ltd, and the Office of the President received $191,253, $2.2 million, $2 million, and $1.3 million respectively.

The biggest beneficiary of the 3% oil revenue was the Ministry of Finance and Planning. With the help of the Bank of South Sudan, the institution remitted $22.2 million to various accounts.

Part of the money was also disbursed to Moris Yei Akol Tiit, who walked away with $137,000. The rest of the funds were wired to accounts with funny identities.

The accounts, named Payment Transfer to Foreign Cash Received, Payment Transfer, and Oil Revenue A/C received $7.5 million, $1 million, and $1.1 million respectively, with the remaining $600,000 sent Adium Forex Bureau.

The Auditor General said the data excludes the period from 2011 to 2013 before the Petroleum Revenue Management Act was passed, a revelation the total shares misappropriated could be much higher.

But on Thursday, the Council of States Ad hoc Committee ordered the governments to repay the 2% and 3% shares of the Net Oil Revenue to the oil-producing regions from July 2011 to December 31, 2020.

According to the Auditor General, Amb Steven Wondu, there was no satisfactory evidence that the Ministry of Finance and Planning complied with the provision of the Petroleum Revenue Management Act, 2013 on the matter of allocation and the transfer of 2% and 3% of net oil revenue to the oil-producing states and communities.

The Ministry of Finance and Planning and the Bank of South Sudan have also been ordered to avail additional missing data critical for verification of the report with warning that any attempt to block access to the information in question could backfire. Mr Ater also acknowledged the finding.

The Ministry of Finance and Planning opened accounts for the 2% and 3% share net oil revenue for producing states and communities in July 25, 2014, at the Bank of South Sudan.

Ater said that the ministry of finance has paid money to people that does not belong to them, he emphasised that the money belongs to the beneficiaries and those are the oil-producing states and the communities.

“The money has to be paid back to the rightful owners. We are already on the way to take action point and the lawful procedures have to be taken. The council is going to take the lawful procedures,” he said.

Call for accountability

The audit was tabled in the House months after the UN Security Council Committee panel of experts wrote to Dar Petroleum Operating Company (DPOC) President Zhou Zuokun on February 16, 2021, seeking an explanation of how state’s share from oil revenue fund was expended.

The letter was copied to Nilepet Managing Director Eng Bol Ring Muorwel among other stakeholders in the oil sector.

‘‘The Security Council expressed concerns [on] reports of misappropriation and diversion of public resources and lack of transparency, oversight and financial governance in South Sudan. The panel is requesting information about Dar Petroleum Operating Company (DPOC), in which the government of South Sudan has a financial stake through Nilepet,’’ the letter partly read.

At the time, President Salva Kiir formulated an audit committee, to be assisted by Alex (an international consultant outfit) to probe the probable leaks in oil revenue.