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FG moves to curtail huge negative net assets of N39trn

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8 months ago

The Federal Government has initiated measures to contain the huge negative net assets, which stood at ₦39 trillion in its 2021 consolidated financial statements.

In this regard, all directors of finance, internal audit, and heads of accounts of ministries, departments, and agencies (MDAs) have been charged to ensure timely legacy asset renditions.

The Accountant General of the Federation (AGF), Dr. (Mrs.) Oluwatoyin S. Madein, who stated this in her keynote address on Tuesday at the sensitisation retreat with DFAS and DIAs in Abuja, frowned at the pace of rendition of legacy assets by MDAs, which she said has been disappointingly slow.

The Accountant General of the Federation warned her office will initiate measures to enforce compliance, and sanctions may be applied to non-compliance MDAs that continue to delay these critical renditions.

Speaking on the workshop’s theme, “National Assets Register & the Strategic Importance of Legacy Asset Rendition in the Implementation of IPSAS Accrual Basis Accounting in Nigeria,” Mrs. Madein reiterated the strategic importance of legacy asset rendition.

“You may recall that Nigeria adopted IPSAS accrual accounting with effect from 1st January 2016; however, till date, many legacy assets are yet to be recognised, measured, and uploaded.

“Consequently, we still have huge negative net assets in our 2021 consolidated financial statements, which stood at 39 trillion naira,” Mrs. Madein stated.

Giving further insights, she said, “The AGF’s office will initiate measures to enforce compliance. Sanctions will be applied to non-complying MDAs that continue to delay these critical renditions. By adhering to these directives, MDAs can contribute meaningfully to the national interest while avoiding any penalties associated with non-compliance.

“The strategic importance of legacy asset rendition cannot be overstated. Unfortunately, the pace of rendition by Ministries, Departments, and Agencies (MDAs) has been disappointingly slow. This delay hampers the timeliness and accuracy of the consolidated financial statements and significantly impacts our ability to address the net asset deficit. As expected, MDAs are therefore urged to expedite action on the rendition of legacy assets.”

As the country navigates through a challenging economic landscape marked by rising inflation and significant external debts, Dr Madein stressed the imperative of adopting a holistic approach to fiscal management, ensuring transparency and accountability in financial reporting.

She said legacy asset management represents a pivotal tool for strengthening the nation’s fiscal position and alleviating the budgetary pressures, and by “systematically cataloguing and valuing legacy assets—long-term resources that have often been overlooked—MDAs can unlock substantial value that would otherwise remain dormant.”.

Dr Madein pointed out that, moreover, effective legacy asset management will yield asset optimisation, debt management, increased accountability, and economic growth because, by revitalising and effectively managing legacy assets, it can stimulate economic activity and create job opportunities, thereby contributing to national growth.

She noted that, in alignment with the International Public Sector Accounting Standards (IPSAS), preparing stand-alone GPFS is vital for enhancing transparency and accountability in financial reporting.

A stand-alone GPFS is defined as financial statements that are prepared independently by an entity, focusing solely on its financial position, performance, and cash flows.

The Executive Director of Ministry of Finance Incorporated (MOFI), Ms. Kemi Owonubi, said the first, immediate steps for the MDAs are to prioritise the asset enumeration and submission of required data.

She urged the MDAs to comply with the reporting standards and preparation of financial statements, as well as adherence to timelines.

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