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Questions raised over FRC N1bn IFRS Academy fund

By BusinessNews Staff on May 11, 2015

Questions are being asked as to the appropriateness of alleged keeping of N1 billion meant for International Financial Reporting Standards (IFRS) Academy in current accounts with some first tier banks by the Financial Reporting Council (FRC) contrary to financial rules and regulation of public service.

BusinessDay investigations revealed that the N1 billion had been depleted to about N800 million due to indiscriminate spending by the council. Jim Obazee is the executive secretary, FRC.

Part of the expenditure profile of the money, according to sources, was payment of minimum of $100,000 annually to subscribe to the International Accounting Standards Board (IASB) foundation for the past two years, with about $120,000 being proposed for this year.

A document in possession of BusinessDay shows that only N50 million is left in Access Bank, where the N1 billion was originally lodged; N700 million now in Zenith Bank, and N50 million in GTBank.

Some board members are said to be querying the ostentatious lifestyle of the executive secretary and the mode of dispensing favours indiscriminately to his cronies.

For instance, it was alleged that he approved payment of N4 million to one Titus Osawe, an assistant director, for “information, data sourcing and analysis” during the FRC investigation of CBN financials.

In addition to this, FRC was said to have also spent about N30 million taxpayers’ money on hotel accommodation for just three people during its investigation of CBN.

Some of the board members are also raising eyebrows over two armoured vehicles allegedly being used by Obazee –one in Abuja and another in Lagos.

Sources at the council told BusinessDay that some of the disenchanted members after series of complaints and petitions have resigned to fate.

It was learnt that a board member of FRC (name also withheld), who questioned why FRC should not be committed to best practices and procedures in corporate governance in conduct of its business was recommended to the Institute of Chartered Accountants of Nigeria (ICAN) for sack.

Part of the letter by the board member reads: “Why are we not having a fixed deposit account or purchasing of treasury bills to earn income? The balance on this account is high enough to warrant such. Why is the decision of the board regarding Treasury bill with the N853 million of IFRS Academy fund not complied with? Why is the amount kept in the current account with Access Bank and later transferred to Zenith Bank still under current account? Who bears the loss of income for over two years now?”

Informed sources said that the board member was prompted by the feelings that this money may have been fixed privately, saying that “at minimum of 10% interest rate on fixed deposit, the fund could earn about N100 million annually”.

The board member is said to have expressed his displeasure over Obazee’s singular instruction for the movement of the money out of Access Bank, because the board member challenged him on his style of leadership.

The IFRS Academy fund is a product of contribution by banks and the Central Bank of Nigeria (CBN). The objective of the academy, which is yet to take-off is, among others, to make sure that there is the required competence and skills to move the council forward.

It was also learnt that Obazee masterminded the two-step downward demotion of all FRC staff as shown in a letter signed by R.O Egbule, chairman, National Salaries, Incomes & Wages Commission, which is at the presidency.

Currently, Obazee is said to be keeping about 16 security operatives – eight in Abuja and eight in Lagos and most of them are police officers and SSS operatives.

Also, the council is said to be paying Obazee N600, 000 as ‘incidental’ allowance –excluding hotels and air tickets for ‘any trip’. The frequency of his trip determines the amount he earns as incidental.

It was also learnt that the FRC has spent about N225 million for printing 150, 000 certificates which it mandated companies to purchase. Each certificate costs N1, 500. Unfortunately, only 15,000 people have registered so far for the certificate, further questioning the council’s prudence in managing taxpayers’ money.

The board member, who questioned the alleged outrageous price for the printing of the certificates, sent a petition to the board.

Part of the letter reads: “Printing (N78.99 million) – This is scandalous and it was stated to be for certificates. Adequate explanation should be supplied since the old stock has not been utilised up to 10% before this additional expenditure. The figure is material and should not be expended as it cannot be exhausted in 5 years.”

On Obazee’s local travel expenses, which got swollen by N600, 000 per trip irrespective of the frequency in a week (air ticket and accommodation excluded), the board member also warned: “The N124.89 million on travelling local is double the figure of last year. Full breakdown should be received as this is a big jump. Documentary as against verbal explanation should be received.”

[Business day]

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