Sanusi and the FRCN Report: Beyond Impunity

By Johnson Momodu
When I read the following headline: “Sanusi May Go To Jail”, in the

Nigeria Pilot of February 24, 2013, I was curious and wanted to see the

contents of the report submitted in June 2013, by the Financial Reporting

Council of Nigeria (FRCN), which investigated the operations of the

Central Bank of Nigeria (CBN). When, eventually, I had access to the

report, I was amazed by the sheer number of infractions, commissions and

omissions, all packed into one report.
The 13-page FRCN report, is a compilation of assorted financial

infractions, from the mildest to the most serious – financial

indiscretion, misapplication, mismanagement and misappropriation of funds,

embezzlement, fraud and plain financial theft – committed with impunity

and utter recklessness by the leadership of the CBN. While some of these

infractions may be treated as excusable human lapses, they are enough,

under normal circumstances, to cause a public officer his job or in some

cases a reduction in rank.
The Financial Reporting Council of Nigeria (formerly the Nigerian

Accounting Standards Board) was established as a private body in 1982. It

became a government agency in 1992 under the Federal Ministry of Trade and

Commerce. In July 2011, a Bill for the FRCN Act was passed through the

Senate and signed into law by President Goodluck Jonathan.

The primary functions of the FRCN are to develop, publish and update

statements of Accounting Standards and to promote and enforce compliance

with the standards. Essentially, therefore, the FRCN is generally accepted

as a unified independent regulatory body for accounting, auditing,

actuarial valuation and corporate governance. Its members, which include

the CBN, are mainly government and private institutions.

The reason for going into the origin, status and functions of the FRCN is

to show, not only that it is professionally endorsed by all accounting

institutions but also that it has the backing of the law. The FRCN report

of June 7th 2013 was a follow-up of the 2012 Audited Account of the CBN,

in which some 22 infractions were discovered. The issue of recklessness

was raised in connection with certain huge financial expenses incurred

under the special access item in the CBN Account. These were the subjects

of the query issued by President Jonathan to the CBN Governor on 6th May,

to which the Governor responded on 21st May (2012). Unfortunately, the

FRCN was not satisfied with the explanation given by the Governor, which

it described as “a clear display of incompetence, nonchalance, fraud,

wastefulness, abuse of due process and deliberate efforts to misrepresent

facts on the part of the leadership of the CBN.”
The FRCN report found Sanusi to be guilty of wastefulness and financial

recklessness in various items of its internal administration of government

funds. This was compounded by the incompetence of the Governor in a number

of areas. The report specifically mentioned CBN's poor handling of the

Asset Management Corporation of Nigeria (AMCON), which led to a loss of

over N2.37 trillion; unauthorized overpayment to External Auditors and the

write-off of “loans to the tune of N3.856 billion in 2012.”

The Report also listed areas in which the CBN Governor abused due process.

They include: the failure to set up a Board of Trustees (BoT) as required

by the provisions of the Memorandum of Understanding (MoU) signed by the

CBN and other Deposit Money Banks on Banking Resolution Sinking Fund;

allowing some parastatals to have debit or overdrawn accounts with the

CBN; non-implementation of the personal Income Tax (Amendment Act 2011;

non-compliance with the provisions of Section 6(1) of the Industrial

Training Fund (ITF) Act Cap 19, LFN 2004), etc.
By far, the more damaging parts of the FRCN report are those dealing with

fraudulent activities. Here, there are startling revelations of falsified

figures involving such cases as the amount expended on the printing of

banknotes; fraudulent claims for air charter flights, including payment of

Emirate Airline, for local flights in Nigeria, which the Airline does not

operate, acquisition and disposal of nonexistent fixed assets, etc.

It is almost certain that the FRCN report contains the highest number of

financial infractions ever committed by a single government official in

the history of Nigeria. That is why its conclusion was unequivocal: “Your

Excellency may wish to exercise the Powers conferred on Mr. President by

Section II(2) of the Central Bank of Nigeria Act 2007 or invoke Section

II(2) of the said Act and cause the Governor and the Deputy Governor to

cease from holding office in the CBN.” The report also sought permission

for the FRCN to conduct a fuller investigation the outcome of which

“should lead to prosecution of those found to be involved in the

misappropriation and/or misapplication or otherwise of the funds of the

For the war on corruption to be meaningful in Nigeria, the recommendations

of the FRCN report must be enforced to the letter. The rule of law must

apply and there should be no sacred cows. Unless those found guilty in

the CBN case are prosecuted, the Government has no justification holding

other Nigerians to account when they violate the laws of the land.

Momodu sent this piece via

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