The Nigerian Bar Association (NBA) has published the 2020 Q2 Management Account in line with the Paul Usoro SAN’s led administration’s transparency and accountability objective.
The Q2 Management Account and Notes to the Account from the President below:
- In keeping with our commitment to promote and entrench transparency and accountability in the management of the NBA’s finances, we are delighted to publish hereby and with this Statement the NBA 2020 Quarter 2 Management Account (“MA”, “Management Report” or “MR”) covering the period April to June 2020. The Q2 MA was tabled before the NBA National Executive Committee (“NEC”) at its meeting that was held on 20 August 2020 and was adopted and duly approved by NEC.
- Similar to what we did in respect of the previous Management Reports, perhaps I need to highlight a few areas in the 2020 Q2 MR for the benefit of our Members, viz:
- The FS shows Cash and Cash equivalent position of N1,235,222,286.00 as at 31 December 2019 (see page 4 of the MR), the breakdown of which is provided in Note 4 to the MR at page 8 thereof. [“Cash equivalent” refers to instruments and holdings such as stocks and similar investment instruments that could easily be converted into cash. NBA as at 30 June 2020 however had no such cash equivalent as Note 4 to the FS bears out; what we had were only cash balances in Bank accounts.] Note 4 shows that a large chunk of the Cash – N501,000,000.00 drawn from the Bar Practicing Fee (“BPF”) Account – was in fixed deposit investment. The NBA NEC had earlier approved the investment, the interest amount of which is paid by the Bank, on a monthly basis, into the BPF Account which, as at 30 June 2020 (Q2 ending), had a credit balance of N230,458,322.00 while the NBA Admin Account had a credit balance of N169,533,321.00. The remainder of the large sums in the NBA Accounts were in dedicated accounts – N92,884,513.00 in the COVID-19 Relief Account, N76,854,371.00 in the Stamp and Seal Account, N37,103,784.00 in the NEC Account, N21,894,630.00 and N75,583,396.00 in the MacArthur Foundation respective Naira and US Dollar Accounts – and not accessible to NBA for administrative and/or operational activities. The interest income from the afore-stated fixed deposit investment as at 30 June 2020 was N3,747,541.00 – see Note 6 at page 11 of the MR and also Item (i) in the Appendix at page 23 of the MR.
- On the liabilities side, the Total Liabilities as at 30 June 2020 was N684,541,036 made up of Total Non-Current Liabilities of N166,901,444.00 and Total Current Liabilities of N517,639,592.00 (see page 4 of the MR). As the MR’s Note 10 (see page 22 thereof) shows, the Non-Current Liabilities is made up entirely of the rental income on the NBA Alao Aka-Bashorun House located at Victoria Island, Lagos (“NBA Alao Aka-Bashorun House”). The lease of that property to a newly licensed Bank “for a fixed term of 10 years certain with an option to renew, commencing on the 1st day of October 2020 and ending on the 30th day of September 2030” was reported to NEC at its meeting of 12 March 2020. Only the rent for the first 3 (three) years has been paid so far by the Tenant. In accounting terms, that income is represented as Deferred Income and is therefore an NBA Non-Current Liability. This Deferred Income was also reported in our 2020 Q1 MR as Total Non-Current Liabilities. The Total Current Liabilities, as at 30 June 2020, as earlier stated, was N517,639,592 as against N556,639,109.00 as at 31 March 2020 (see page 4 of the MR). The details of the Current Liabilities are set out in Note 5 of the MR at pages 8-11 thereof. The most significant of these liabilities is the Lagos State Government (“LASG”) Land Charges for the NBA Alao Aka-Bashorun House amounting to N397,794,423.00 (see Note 5 of the MR at page 8) which was reported in our 2020 Q1 MR (see also my Release of 01 August 2020 on the MR). This liability predates the current NBA administration and we are still expecting a favorable response from LASG to our request for a substantial if not complete waiver of the Charges. The other significant liability is the aggregate of the Other Payables which as at 30 June 2020 stood at N53,622,442.00 as against N86,768,259 for the Quarter ending 31 March 2020. The significant reduction in the Other Payables amount is, amongst others, attributable to the repayment of N25,000,000.00 to the MacArthur Foundation in final settlement of the inherited liability of N64,086,155.00 the repayment of which was approved by NEC at its meeting that was held on 28 March 2019. There are two significant items in the Other Payables amount of N53,622,442.00 and these are the outstanding Withholding Tax payable amount of N19,938,497.00 and another N19,574,695.00 which represents the 2018 AGC payables. Worthy of note is the fact that, as the figures confirm, we have paid down almost completely the liabilities that were inherited from the previous administration, save for the LASG Land Charges of N397,794,423.00. As at 31 August 2018, these liabilities stood at N446,542,516.00, not including the afore mentioned MacArthur Foundation liability of N64,086,155.00 and the LASG Land Charges of N397,794,423.00 which, when aggregated with the earlier recognized N446,542,516.00, takes our inherited liabilities to a total of N908,423,094.00. The initially recognized inherited liability of N446,542,516.00 was as at 30 June 2020 almost fully paid down. Indeed, as at the said end of Quarter 2, the outstanding from that initially recognized inherited liability stood at about N30,242,695.00 made up of 2018 AGC payables (N19,574,695.00); National Secretariat building payable (N4,000,000.00); 2018 NBA National Officers’ Elections (N2,660,000.00); Seminars and workshops (N114,000.00); Photography Expenses (N1,876,000.00); and Committee meeting, transport and traveling expenses (N2,018,000.00) – see MR Note 5a pages 9-11. In contemplating this Current Liabilities amount, however, we must draw Members attention to the Caveat that is entered at page 3 of the MR 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 Management Report. A classic instance of such restatement is the afore-mentioned LASG Land Charges which was uncovered in 2020 and was captured for the first time in the Q1 Accounts. In my discussions with PwC, any such other or further Restatements or Adjustments would be reflected in the Q3 2020 Management Report which would cover the period July to September 2020.
- The Statement of Comprehensive Income (at page 5 of the MR) which is a component of the MR shows that the NBA had a total income of N172,680,519.00 as at Q2 ending. Notes 6 and 7 to the MR at pages 11 to 17 thereof provide the breakdown of this income and show that the Restricted Income stands at N110,287,978.00 while the Unrestricted Income totals N62,392,540.00. The Restricted Income is essentially made up of 2 items i.e. Stamp Sales amount of N17,393,102.00 and COVID-19 Relief Donations of N92,893,000. The COVID-19 Relief Donations constitutes 54% of the Total Income and the list of donors as at the period ending is captured in Note 7a of the MR at pages 12-17. Bar Practice Fees (N52,259,699.00) constitutes the single largest Unrestricted Income and represents 30% of the Total Income. The other significant amounts under Unrestricted Income are (a) the redeemed pledges of N5,500,000.00 in respect of the 2019 Annual General Conference; and (b) the Interest Income of N3,747,541.00 – see Notes 6 and 6a at page 11 of the MR and also Appendix Item (i) at page 23 of the MR.
- The Statement of Comprehensive Income (see page 5 of the MR) also shows that the NBA’s Total Expenditure for Q42 2020 was N212,281,601.00. The details of the expenditure are set out in Notes 8 and 9 of the MR at pages 17 to 21 thereof and also in the Appendix to the MA, particularly in its Items 2 page 24 of the MR, all of which provide further clarity on the expenditure for the Quarter. 94% of the Total Expenditure, as the MR Appendix shows, is “attributed to general and administrative expenses. The highest spend during the Quarter was” the 10% BPF “remittance to NBA Branches which amounted to N65,754,594.00 . . . Another significant spend during the period was the sum of N51,115,000.00 paid to Leadway Assurance Company Limited as premium to procure” Group Life Assurance “cover for 51,115 verified NBA financial members under the Group Life Insurance Scheme for the year 2020”. The Statement of Comprehensive Income shows a Deficit of N39,601,083 for the period which means we spent that much amount more than or beyond the aggregate income of N172,680,519.00 for the same period. In other words, the Total Expenditure of N212,281,601.00 for the period exceeded the aforestated Total Income of N172,680,519.00 for the same period by N39,601,083.00. This is understandable given the fact that the bulk of the NBA’s Income traditionally comes from the BPF payments which comes into the BPF Account in very heavy stream between January and March of each year. In the subsequent months of the year, these fees come in trickles and that fact is reflected in this MR. However, because we have always, throughout our tenure, managed the funds of the Association prudently, we were not at all short of cash consequent upon that deficit and this is reflected in the cash balances (including the fixed deposit investment of N501,000,000.00) that are captured in Note 4 of the MR at page 8 – also see paragraph 2(i) at page 1 of this Release. I must, however, again highlight the earlier caveat by PwC to the effect that fresh information and data may result in the restatement and/or adjustment of the expenditure figures in our Q3 2020 MR. Finally, I do need to mention that the total expense amount of N212,281,601.00 excludes capital expenditure on the NBA National Secretariat building construction project in Abuja. The building-related expenditure for the Quarter, which was N141,980,616.47, is captured and disclosed in Item 5 of the MR’s Appendix at page 24. As I mentioned in my Address to NEC at its earlier referenced meeting that was held on 20 August 2020, that project has now been completed save for very few outstanding touch-ups and the imminent construction of a motorable access into the building from the Muhammadu Buhari Way.
- With the preparation and publication of this Q2 2020 Management Account, we have taken one more practical step towards institutionalizing the basic principles of governance, transparency and accountability in the NBA body politic thereby promoting efficiency and transparent conduct in our affairs and also earning the respect and admiration, not only of our Members but of our global audience. As I mentioned in my 2020 Q1 MR Release of 01 August 2020, “we had actually taken the constitutional step of amending the Nigerian Bar Association Constitution, 2015 (as amended) (‘NBA Constitution’) to include a provision that mandates the preparation and presentation “to the National Executive Committee at its quarterly meetings the Management Report and Accounts of the Association for the preceding quarter” and “the said Quarterly Management Report and Accounts shall be published and circulated to all members of the Association” – see Section 8(5)(g)(v) of the NBA Constitution.
- We have in the course of our administration religiously kept to this governance practice and the NBA has been the better for it, amongst others, from an integrity perspective. It remains for us to present our NBA Administration’s Closing Account covering the period 01 July to 28 August 2020 at our Annual General Meeting that would be held virtually on 28 August 2020. That Closing Account would not only present our income and expenditure for the period 01 July to 28 August 2020, it would also show definitively our cash/cash equivalent balances together with the liabilities that would be inherited by and passed on to the succeeding NBA Administration under President-Elect Olumide Akpata.
- As we mentioned in our Release on the 31 August 2018 MA, “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”. As we prepare to bow out of office on 29 August 2020, we feel very gratified that we have kept faith with our commitment in this regard and are hopeful that the succeeding administration of President-Elect Olumide Akpata will persist and persevere with the practice.
 1 Clause 4 of the Lease Agreement stipulates that “the rent shall be fixed for the first five (5) years and shall be subject to review thereafter for the 5 years remainder of the Lease Term at the rate of not less than 10% of the Annual rent amount afore-specified. The rent shall be paid always in advance at the planned yearly ratio of 3:2:2:3 meaning that the rent for the first three years shall be paid in advance and as a condition precedent to the commencement of this Lease and the rent for the subsequent 2 (two) years shall be paid in advance of the commencement date of the said 2-year term and the same shall apply to the succeeding 2 (two) years thereafter and also to the last and concluding 3 (three) years”.
 The invoice for the Land Charges was sent to the NBA by LASG on 28 July 2018 and was brought to my attention only in 2020. As soon as I knew of this outstanding liability, I wrote to LASG on 22 May 2020 requesting for a complete waiver of the Charges or at the minimum a waiver of the “Premium Lease Renewal fee of N379,669,000.00 thus leaving the NBA with the . . . responsibility of paying the balance fees of N18,125,423.00”. We are counting on a favorable consideration of our pending application with LASG.
 3 See the published Communique/Resolutions of the NBA NEC Meeting that was held on 28 March 2019, specifically Item 5 thereof.