While only a few people would query the rationale for sacking Mr. Jim Osayande Obazee, the Executive Secretary of the Financial Reporting Council of Nigeria (FRC), the timing of the decision has raised some fundamental questions, especially given the suspension by the Minister for Industry, Trade and Investment, Okechukwu Enelamah, of the controversial corporate governance code that led to the action.
Yet, I had more than three years ago warned in my column, “One Central Bank, Four Governors”, that Obazee is unfit for the kind of responsibility he was saddled with.
As I wrote back then, the story can be traced to 1982, when the Nigerian Accounting Standards Board (NASB), a private sector initiative was established in collaboration with the Institute of Chartered Accountants of Nigeria (ICAN).
Ten years later in 1992, then military president, General Ibrahim Babangida, converted the NASB into a government parastatal under the Federal Ministry of Commerce.
In 2003, the NASB Act was passed by the National Assembly with the primary functions to “develop, publish and update Statements of Accounting Standards to be followed by companies when they prepare their financial statement and to promote and enforce compliance with the standards”.
Following a critical appraisal of the NASB by the International Monetary Fund (IMF) in 2010, the then Executive Secretary, Mr. Godson Nnadi began a process for establishing a new body that would not only regulate accounting and auditing standards in the country but would also be independent of both ICAN and ANAN.
Shortly after he commenced that process, Nnadi was appointed Finance and Economic Development Commissioner in Enugu State where he hails from.
Before he left, Nnadi handed over to his protégé, Obazee who saw to the drafting and eventual passage of the Financial Reporting Council of Nigeria (FRC) Bill in May 2011.
I have it on good authority that, either due to compromise on the part of the National Assembly committee that was to provide oversight, or out of negligence, the lawmakers simply endorsed the draft presented to them by Obazee without any input.
Even at that, there is nothing in the FRC Act 2011 (which I once took the trouble to read) that empowers Obazee to be interrogating CBN Governors as he tried with Sanusi Lamido Sanusi in 2013, harassing promoters of commercial banks as he did last year with Stanbic IBTC or compelling church leaders to vacate their positions as he recently attempted with some dubious guidelines.
But the controversy has also thrown up the question of whether churches and mosques are above accountability. That needs to be addressed.
Whatever may be Obazee’s excesses, and he is a man renowned for sundry acts of recklessness, his problem started in December 2012 when he announced that the FRC had designed an accounting system for churches, mosques and other not-for-profit organisations that would compel them to report their financial transactions periodically from January 2013.
To achieve this objective, he unveiled the Statement of Accounting Standards (SAS) 32 which stipulates that the financial statements of such organisations shall include Statement of Accounting Policies, Statement of Financial Position, Statement of Activities (income and expenditure), Statement of Changes in Net Assets, Statement of Cash flows, Notes on Accounts and Five-year Financial Summary.
I don’t know how much compliance there has been in that direction but Obazee once lamented publicly about the challenge he was facing.
“In keeping other peoples’ money, you have to prepare account. That is why churches fought me so badly, took me to court as a person and then my office too.
“Mosques and orthodox churches freely complied, but those Pentecostal churches called me to ask questions.
“They said ‘this church is church of God and we are accountable to God.’
“And I told them: ‘Very good, so you must take this church to heaven, you can’t operate it here’.
“When public funds are involved, government needs to ensure proper accountability” he said at the time.
Since not-for-profit organisations exist for social, religious, educational, professional or other charitable reasons, and their income are not captured in the tax net, Obazee has a point.
Even when a non-profit organisation may have assets and may be profitable, the accruing funds are expected to be deployed in pursuit of the goals for which those institutions were established; and not to be shared by some promoters.
Yet, we all know that there are religious and other non-government organizations in our country that are established and run like family businesses. That is not right.
In most civilised societies, donations to churches, mosques and other religious centers are well documented not only for record purposes but also to ensure that the sources of those funds are not from criminal enterprises like money laundering, drug trafficking, graft etc.
For instance, during the 2010/2011 academic year when I was in the United States with my family, we were worshipping at the Chapel of Resurrection Parish of the Redeemed Christian Church of God (RCCG) in Cambridge, Massachusetts.
On the church offering/tithe envelope, you have to write your name, address and phone number along with the amount being paid.
I once asked the Pastor why I had to fill all those details just to give offering or pay tithe and he said they were important for the American authorities that would examine their books.