SANUSI RESPONDS 3: Memorandum Responding to THE FRCN ALLEGATIONS 1. Corporate Governance Briefing Note Allegation 1:that there is weak corporate governance at the CBN on account of the fact that the office of the Governor is fused with that of the Chairman of CBN’s Board of Directors. Response: i.This allegation ignores the fact that global best practice is that the Governor of the central bank is the Chairman of the Board of Directors of the central bank. See Annexure A, which shows the composition of the Board of Directors of central banks in over 55 different countries. 2. Alleged Fraudulent Activities Payments to NSPMP Briefing Note Allegation 2:that the CBN’s breakdown of “Currency Issue Expenses” for 2011 and 2012 indicated that it paid the Nigerian Security Printing and Minting Plc(NSPMP) N38.233 Billion in 2011 for printing of banknotes, whereas the entire turnover of NSPMP was N 29.370 Billion. Response: i. The expense item of N38.233 Billion to NSPMPwas made up as follows: a. N28.738Billion payment to NSPMP in 2011; b. N6.587Billion accrued liability in 2011 but paid in 2012 when deliveries were received; and c. N2.829Billion audit adjustment journal entry into the account at the end of 2011 in respect of prepayments to NSPMP. ii. See Annexure Bfor the evidence of payment to the NSPMP. Evidently, the difference between the numbers in the financial statements of CBN and NSPMP is a simple reflection of timing differences between recognition of expenses by the CBN and income recognition by the NSPMP, with both entities applying conservative accounting policies.
Posted on: Sun, 16 Mar 2014 12:11:04 +0000
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