Financial Structure: Effective & Efficient Financial Model

Consequent upon the outcomes of the decisions arising from the recently concluded Top Management and Board Retreat held in Abuja as well as several interviews with Leaders across levels in the organization, the following are major growing Financial Management concerns that require immediate intervention. It is indicative of the need for turnaround, reorganization and repositioning of the company for increased profitability and strong expenditure controls.

• Financial architecture fragile
• financial policies – Financial procedures
• Accountability for risks and controls establishment needs streamline
• Relationships between recurrent and capital costs, and personnel costs and non-personnel costs improperly maintained
• Resources critical to project success and the possibility non-availability resources not enhanced
• Relationship between inputs staggered.
• Contingency measures for financial project inputs not adequately positioned
• Capital expenditure - Recurrent costs. Likewise, staff costs and non-staff costs relationships
• Antecedents and mechanisms of financial resilience weak
• Diversification of activities –Risk management lack proper financial procedures
• Cost controls and financial performance lack effectiveness
• Cost centres – cost management structure weak

Initial Analysis

• Staff expenses not properly fixed to align with performance levels.
• Disrespect for Due Process in authorization of expenses
• Poor or Total lack of Structured performance measurements to determine remunerations.
• Authorization and approval levels of expenses not maintained.
• Cost centers profitability measurement not properly maintained and monitored
• Corporate financial structure overruled by lack of financial discipline
• Over bloated expenditures without controls
• Absence of zero-based budgeting practices
• Budget and budgetary limits not properly controlled or respected
• Poor or Gross Lack of Performance Management and Reward System
• Investment policies not in place for profitable investments
• Optimization of profitability in market share not monitored efficiently
• No financial plan nor model to adequately track leakages.
• Debt collection processes weak and unstructured
• No Consequence for abuse of expenses by Top management
• Ineffective and Inefficient budget monitoring processes.
• Absence clearly defined strategic Business Unit budget /budgetary controls vis-à-vis cost centers
• Stock and inventory management poor and needs improvements.
• Insurance and risk management plan and policies poor.

Review of transactional processes.

• Review of existing transactional processes to determine integrity of transactional activities and align with the newly established processes.
• Profile and x-ray the accounting architecture in place in line with the business processes and redefine for proper financial reporting and proper record keeping standards set.

Comprehensive audit of the financial transactions to determine accuracy of the components in the financial statements.

• Question infractions and align with corrections of the anomalies.
• Books of accounts are maintained in line with new financial plan/framework.

Identify potential loss areas militating against profitability in cost centres /SBUs.

• Review costs structure and control processes and focus on implementation of established financial policies. For instance
• Corporate offices and Strategic Business Units
• Targeted Market areas
• Operational activities
• Contractors providing goods and services
• Projects and portfolio management
• Assets and investment