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Why Pastors, Imams Are Angry With FRC

If there is one government agency that Pastors and Imams are very angry with presently, it is the Financial Reporting Council of Nigeria (FRC). Religious leaders are extremely bitter with Section 9 of the FRC code.

For those who don’t know the code reads: “The Founder or Leader of a NFPO occupies a special position in the organisation and is committed to the success and longevity of the NFPO. Accordingly, a Founder or Leader should not take on too many responsibilities in the organisation or have an indefinite term in the running of the organisation.”

“Where for any reason, a Founder or Leader of NFPO also occupies any of the three governance positions of Chairmanship of the Board of Trustees, the Governing Board or Council, and the Headship of the Executive Management (or their governance equivalents), the following provisions shall apply before the end of the organisation’s financial year in which this Code takes effect.”

“The Founder or Leader shall cease to occupy these three governance positions simultaneously. This is to ensure the separation of powers and avoid possible concentration of powers in one individual.”

“The Founder or Leader may, however, choose – subject to the agreement of the organisation’s apex authority as expressed in the Annual General Assembly, Annual Meeting, Annual Stakeholder Engagement, Annual Conference, Annual Synod, Annual Fellowship Assembly or their equivalents – only one of these three governance positions subject to his current tenure. This is to ensure a clear division of responsibilities at the head of the organisation between the running of the governing body and the executive responsibility for the management and fulfilment of the organisation’s mission.”

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“Where the Founder or Leader has occupied all or any of these three governance positions for more than 20 years, or is aged 70 years or above, the choice in section 9.2.2 above should only relate to the Board of Trustees as in section 9.4(c) below, except the constitution of the organisation otherwise provides.”

“In the case of religious or cultural organisations, nothing in this code is intended to change the spiritual leadership and responsibilities of Founders, General Overseers, Pastors, Imams and Muslim Clerics, Presidents, Bishops, Apostles, Prophets, etc., which are distinguishable from purely corporate governance and management responsibilities and accountabilities of the entities.”

“Conflicts with Founders or Leaders should, therefore, be addressed by: Recognising and respecting past achievements and strategy of the Founder or Leader with assurances that change has become inevitable to enable his dream live on; making provisions if not already in existence, or drawing the Founder’s or Leader’s attention to the maximum tenure already stipulated by the Charter and imploring the Founder or Leader to respect it; considering and ensuring Founder’s or Leader’s continued advisory or spiritual  role by creating a Board of Trustees (BOT) for which the original Founder or Leader can become the First or Life Chair; and (d) elevating deserving and senior members of the organisation to the Board of Trustees.”

Besides, another part of the FRC code that Pastors, Imams and other religious leaders are angry with is the Part D of the code which talks of accounts and audit of the organisations and their assets. It reads: “The annual financial statement of the NFPO should be prepared in accordance with approved framework of accounting and financial reporting issued from time to time by the Financial Reporting Council of Nigeria.”

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“Audited annual financial statements shall be distributed to relevant stakeholders after the Audit and Risk Management Committee has reviewed them and the Governing Board has approved them. The Chief Financial Officer of the NFPO shall be responsible for preparing annual and other periodic financial statements.”

“Depending on the size and needs of the NFPO and its stakeholders, in addition to the annual financial statements, the board may decide to commission and produce interim financial statements.”

“Directors are stewards of the NFPO’s financial and other resources. The Governing Board should ensure that the financial resources are used to further the NFPO’s objectives and that the organisation’s funds are appropriately accounted for by regularly receiving and reviewing up-to-date financial statements and any auditors’ letter or audit and risk committee report.”

“The Governing Board of NFPO should ensure complete inventory of all the assets of the organisation, both non-current assets and current assets wherever they may be situate, while also ensuring as far as possible both the possession and legal ownership.”

“The prohibition of NFPO assets being used for purposes other than the intended charitable objective makes it mandatory that founders, directors, managers and volunteers should not have control over them for personal use.”

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“Where any form of assets has been bought by the organisation for the use of a Founder or Eminent member, such assets remain under the control of the organisation, who also retains legal ownership.”

“This position is different when members voluntarily donate cash or other assets outside the purview of the organisational control, as a gift to such persons, in which case, such assets belong to such persons personally. The basis of any personal donations or gift must be clearly stated to facilitate proper accountability for organisational assets.”

“Where the organisation is involved or associated with another entity engaged in commercial activities, the profit from such ventures should be ploughed back into the funds of the organisation after accounting for all expenses relating to the venture.”

The FRC also says the board of every NFPO should establish a whistle-blower policy that encourages individuals to report credible information on illegal practices or violations of policies of the organisation to the appropriate authorities. It also specifies that the organisation will protect the individual from retaliation and identify the parties to whom such information can be reported.