On behalf of the Council and entire members of the Nigerian Institution of Estate Surveyors and Valuers, I want to profoundly express my deep appreciation and gratitude to you for your favourable consideration of our request for this meeting. I believe with all my heart that this meeting will open a new channel of synergy and profitable collaboration between your critical Agency and our Institution resulting in a more robust and efficient management of our national Assets.
IPSAS, as we know, as stakeholders, was adopted by the Nigerian FEC for Public Sector Accounting as much as IFRS was adopted for Private Sector Accounting Reporting as far back as 2010.
Since then, your Office has been playing a leading and co-ordinating role for effective implementation by all levels of governance in the country.
Of great importance for reference, are your directives and circulars of 13th May, 2013 and 23rd October, 2014, respectively, to advance the implementation effort of IPSAS with a view to achieving reasonable migration by all MDAs to accrual Basis of Accounting by 2016.
Through the aforementioned memos from your desk, as the Chairman of FAAC Sub Committee on IPSAS Implementation, an administrative structure of IPSAS Implementation was put forth as follows:
1. The FAAC Sub-Committee;
2. The Federal government of Nigeria (FGN), State/Local Government Implementation Committees;
3. The IPSAS Project Management Team, (OAGF, OAGS/LG Treasury);
4. The MDA Implementation Committee/Work Stream.
Though, we have not confirmed the secretariats of all these above-stated implementation Committees, we confirmed that membership criteria and category of workers to be part of the committees were handed down accordingly.
Of particular interest to us is the composition of the MDAs-IPSAS Implementation Committee. This interest is coming from the point of view that as important and as critical as the competence of our professional members is, the Committee did not factor the Valuer’s competence either as an in-house member or as out-sourced input.
Furthermore, among others, the Terms of Reference of the MDA IPSAS Committee included:
- To identify and document all assets and liabilities of the MDA grouped as follows:
a) Investment Property;
b) Property, Plant and Equipment;
c) Biological Assets and Agricultural produce;
d) Intangible assets among others.
Additionally, the Hon. Minister of Finance, Mrs. Kemi Adeosun, had announced the creation of an Asset Tracking Management Project (ATM Project) for all federally owned Asset directing that an Asset Register be raised by all MDAs to be collated by her Ministry for a Central and Unified National Asset Data Base. (ThisdayNews Paper of March 6, 2017).
We wish to respectfully observe that the above-stated TOR and the Honourable Minister’s directive cannot be successfully achieved without the Professional input of the Estate Surveyors and Valuers, if best practice is our desire in implementation. This is because no asset register will be complete without the value competence which Estate Surveyor and Valuer are the only authorized Professional Body to determine value of assets.
Moreover, in addition to the TOR, asset Registers templates were attached to the directiveof 23rd October, 2014, a sample of which is herewith attached.
We observe that the attached templates to your directive did not conform to the requirements of the IFRS and IVSC Performance Standards.
Kindly permit me to call your attention to the convergence of IFRS, IVS and IPSAS (all International Financial/Valuation Reporting Standards) on annual Accounting Reporting which are two models of Fair Value and Depreciated Cost Model. These two concepts are not new to us here.
While Fair Value is critical to assessing the real performance of the asset and to providing meaningful key performance indicators (KPIs) about important matters such as sustainability and asset management performance;
Depreciated Cost involves depreciation in the improvement from the cost of the new asset as of the effective appraisal date which may not always be based on the traditional reducing balance or straight line methods.
It will take the judicious application of the competence of the Estate Surveyor and Valuer to achieve this convergence.
By the provisions of the Estate Surveyors and Valuers’ Registration Board of Nigeria Act, Cap E13 LFN 2007, the Nigerian Registered Estate Surveyor and Valuer is enabled solely, to practice the profession of Valuation of all class of Asset in Nigeria which includes facilities management. This same law criminalizes any valuation done by any non-valuers.
It is against the realities of all of the above that I make the following request from your Excellency:
1) Inclusion of Qualified Estate Surveyor and Valuer in all the MDA’s IPSAS Committees at all levels;
2) Engagement of registered Estate Firms in the Valuation and preparation of Public Sector Asset Register;
3) The adoption of the reviewed attached sample of Fair Valuation Template/Schedule;
4) Issuance of a directive to all MDAs to the effect that Asset Registration and Valuation should be captured in the 2018 Budget for those which have not valued their assets for IPSAS compliance.
5) Implementation of immediate establishment of Directorate of Valuation in the Financial Reporting Council of Nigeria (FRCN).
6) The establishment of asset management Department in each MDA, to be headed by a qualified Estate Surveyor and Valuer.
Regrettably, the Directorate of valuation in the Financial Reporting Council of Nigeria (FRCN) which is expected to mid-wife Valuation related function of the Council has not been established as required by law since the Council came into existence, over four years.
The AGF Sir, if you just ensure these requests are granted, then, you have made my tenure as the President of the Nigerian Institution of Estate Surveyors and Valuers.
While thanking you again for this rare privilege of this chat with your Office, I look forward to a mutually beneficial synergy as we remain in touch. I assure you of our unflinching commitment to capacity building and knowledge upgrade and internal discipline.
Please accept the assurances of my highest esteem and kind regards.
ESV. Dr. B. J. Patunola - Ajayi (FNIVS, FRICS, Thd)