Nigeria’s Federal Executive Council has approved a national policy on the enforcement of financial regulations in government agencies.
The Minister of Works and Housing, Babatunde Fashola, disclosed this while briefing State House Correspondents on decisions reached at Wednesday’s cabinet meeting.
According to Fashola, the policy will also help in the assessment of the life span and disposal of government assets.
“The Ministry of Works and Housing presented a policy memorandum. The purpose of the policy memorandum was to seek better enforcement of the financial regulations of government, especially the revised 2009 regulations with regards to valuation process for plants, equipment, land, property and machinery, and also how the schools off when they reach the end of life.
“This policy is premised against the context of the executive order 11 that enthrones maintenance, as a conscious government policy. And we think because of that, government assets should last longer than the life cycle usually prescribed in the existing financial regulations, such as four years and nine years for other classes of machinery.
“The other context behind the policy was also in order to help the government manage expenditure in the face of revenue challenges on certain items of governance, on which government can spend less if, as a result of policies, the government takes certain actions. For example, if you slow down the depreciation policy on vehicles, for example, your replacement rate will slow down, as well.
“So we propose for the council to adopt policies to change the depreciation threshold from four years to six years for vehicles. And we also propose a strategic percentage depreciation rate per year for different classes of vehicles, for vehicles that are under two liters and those over two liters. And we also proposed that plant and machinery should now be depreciated over a period of up to 10 years instead of what currently exists in the financial regulations.”
Giving more insight, the Minister said heads of governmental agencies must also be carried along when purchasing or disposing properties, to ensure that laid down procedures are properly followed.
“We also propose that Ministries Departments and Agencies, heads of the Ministry as accounting officers and Ministers must sign off now on request for valuation of properties, especially when agencies are trying to buy properties.
“Finally, we also propose that government approves the sale of two properties, at the 2001 rates, which were 18 and 20 million at the time, those were the market values of those properties, but they were sold at 5 million and 2 million in 2001. So we’ve said that the government should approve that the buyer should pay the open market rate at that time in order to consummate the transaction.
“They were properties sold as a result of the Proceed prosecution for narcotics by NDLEA, so they were proceeds of drugs, but the valuation process followed the NDLEA Act instead of the financial regulations. So, essentially those policy proposals were approved by the council,” Fashola added.
PIAK
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