JUST IN: Paul Usoro SAN Led Administration Releases NBA Financial Report As At 31st August 2018

Paul Usoro, SAN, President of the Nigerian Bar Association, has in fulfillment of his campaign promises published the NBA financial statement. The publication is on the financial statement of the Association as at the 31st day of August 2018, and finance diagnostics report, contains Statement of Financial Position, Statement of Comprehensive Income, Statement of Changes in Net Assets, Notes to the Financial Statements, and the Adjustments to the audited opening balances. Below reads the press statement NBA FINANCIAL STATEMENT AS AT 31 AUGUST 2018 AND FINANCE DIAGNOSTIC REPORT 1. In our published Statement of 06 October 2018, we had informed you, our dear colleagues, of the engagement of PricewaterhouseCoopers (“PwC”) for the twin assignment of preparing the NBA Financial Statement (“FS”) as at 31 August 2018 and a Finance Diagnostic Report. The detailed scope of work for the assignment was fully reproduced in our said Statement which, for ease of reference, can be found at the NBA’s website. 2. I am pleased to inform you that PwC has submitted the twin work products i.e. the Financial Statement as at 31 August 2018 and the Finance Diagnostic Report both of which are being circulated, with this my Statement, to our Members; these documents have also been posted and published on the NBA website. The Diagnostic Report is fairly straight-forward and speaks for itself. It essentially highlights in lucid detail and with complete clarity the fault-lines in our extant Finance Unit and makes fundamental recommendations on remediation steps that we must urgently take. 3 With regard to the Financial Statement, perhaps I need to highlight a few areas for the benefit of our Members, viz: The NBA Admin Account which is the NBA’s main operational account was overdrawn and had a debit balance of N42,020,950.27 as at 31 August 2018 and this is reported as part of the Current Liabilities in the FS the breakdown of which is set out in Note 6 to the FS at page 7 thereof. Note in particular, the line item “Short-term borrowings” in Note 6. The FS however shows Cash and Cash equivalent[1] position of N126,113,841.00 (see page 2 of the FS) as at 31 ________________________________ [1] “Cash equivalent” refers to instruments and holdings such as stocks and similar investment instruments that could easily be converted into cash. NBA as at 31 August 2018 however had no such cash equivalent as Note 5 to the FS bears out; what we had were only cash balances in Bank accounts. 1. August 2018, the breakdown of which is provided in Note 5 to the FS at page 6 thereof. Note 5 shows that most of the Cash were in dedicated accounts (e.g. MacArthur Foundation Accounts, Stamp and Seal Account, North East Account) the proceeds of which ought not be used for NBA operational activities. As we pointed out earlier, the NBA Admin Account is the NBA’s main operational account and it had an overdrawn balance of N42,020,950.27 as at the said date. The balances in the other, arguably, non-dedicated accounts (all of which are detailed along with the dedicated accounts in Note 5 to the FS) when tallied (i.e. having isolated and kept aside the funds in the dedicated accounts), was less than N20,000,000.00 as at the said date. 2. On the liabilities side, the Total Current Liabilities, as at 31 August 2018, according to the FS, was N446,542,516.00 – see page 2 of the FS. In contemplating this amount, we must draw Members attention to the Caveat that is prominently entered at page 1 of the FS whereat PwC expressly forewarns the NBA of the possibility of a restatement or adjustment of this figure based on fresh information and data which may be unearthed sequel to the preparation of this Financial Statement. In my discussions with PwC, any such Restatement or Adjustment would be reflected in the Q1 2018/2019 Financial Statement which is under preparation, in fulfilment of our commitment to consistently publish Quarterly Financial Statements. Q1 2018/2019, for Members information, covers the period August to October 2018, given the fact that the NBA’s current Financial Year end is 31 July 2018 of every year (a practice which, at the appropriate time, we would propose a change, for the reasons rightly highlighted at page 26 of the Diagnostic Report under the heading “Financial Planning and Budgeting”. The Q1 2018/2019 FS would be published, hopefully, in a fortnight and most definitely before the NEC meeting scheduled for 06 December 2018 where the two Financial Statements and the Diagnostic Report would be formally presented and deliberated upon. 3. The Statement of Comprehensive Income which is a component of the Financial Statement as at 31 August 2018 shows that the NBA had a total income of N519,245,091 in the month of August 2018 (see page 3 of the FS). Notes 7 and 8 to the FS at pages 7 and 8 thereof provide the breakdown of this income and show that the bulk of the income – N499,661,339.00 – accrued from AGC activities (to wit, registration fees, donations, sponsorships, etc.). 4. The Statement of Comprehensive Income also shows that the NBA’s Total Expenditure in the month of August 2018 was N866,570,811.00 with a Finance Cost[1] of N500,000.00 (see page 3 of the FS). The details of the expenditure are set out in Notes 9 and 10 at pages 8 to 11 of the FS. The bulk of the expenditure (N737,275,378.00) relates to the AGC – see Note 9 under the line item “Unrestricted program expenses” and see the breakdown of these expenses in Notes 9a and 9a(i). When these two heads of cost (i.e. the Expenditure and the Finance Cost) are tallied (N867,070,811.00) and matched against the NBA’s Gross Income for the month of August 2018 (i.e. N519,245,091.00), the NBA recorded a Deficit of N347,825,720.00 in that month, as shown in the Comprehensive Income Statement (see page 3 of the FS). Again, I must highlight the earlier caveat by PwC to the effect that fresh information and data may result in the restatement and/or adjustment of this figure in our Q1 2018/2019 FS. 5. As I earlier mentioned in this Statement, the FS as at 31 August 2018 as well as the Finance Diagnostic Report would be tabled before NBA NEC for deliberation on 06 December 2018. We also expect that the Q1 2018/2019 FS would be ready before the said date and would also be presented and deliberated upon by NEC, in fulfilment of our commitments to you, our colleagues, during the campaigns and in my Inaugural Address. I must also mention that PwC has graciously agreed to be present at the NEC meeting to clarify and/or address any issues that NEC Members may require of them. 6. Finally, it is perhaps important that we remind our Members that, by publishing this FS and Diagnostic Report, we are not on a mission to witch-hunt and/or probe anyone. As you would observe, the FS only sets out the facts and figures without any forensic analysis thereof. All that we seek to achieve is to institutionalize the basic principles of governance, transparency and accountability into the NBA body politic in a manner that makes for efficient and transparent ________________________________ [1] NBA took an overdraft facility in August 2018 as captured in Note 6 to the FS and the cost of that facility is what is referred to as “Finance Cost”. conduct of our affairs thereby earning the Association the respect and admiration, not only of our Members but of our global audience. It is our hope that the consistent 2-year practice of what we have just begun – and by God’s Grace, will maintain – would inculcate these practices into the NBA DNA and make them irreversible by succeeding NBA administrations. Paul Usoro, SAN, FCIArb Download the full copy in PDF Format]]>