NNPC DOA and DFA Walkthrough Session July 2022 PDF

Delegation of Authority (DOA) and Delegation of Financial Authority (DFA) Framework for NNPC Limited Walkthrough Session for Management Staff from M6 and above July 2022 NNPC Limited PIA Implementation NNPC PIA IMPLEMENTATION AGENDA DOA and DFA Framework for NNPC Limited: Walkthrough Session O...

Delegation of Authority (DOA) and Delegation of Financial Authority (DFA) Framework for NNPC Limited Walkthrough Session for Management Staff from M6 and above July 2022 NNPC Limited PIA Implementation NNPC PIA IMPLEMENTATION AGENDA DOA and DFA Framework for NNPC Limited: Walkthrough Session On July 18, 2022 Venue: Hybrid Arrival, Tea and Registration 08:00 am – 8.55 am All Opening Prayer - 2nd Stanza National Anthem 09:00 am – 09:05 am All Health & Safety Moments 09:05 am - 09:15 am NMSL & GHSE Session Objectives & Ground Rules 09:15 am – 09:20 am PMO Opening Remarks 09:20 am - 09:25 am CEO Overarching Legal Architecture of the new DOA Framework 09:25am - 09:35 am OALP Pre-transition to NNPC Limited: Delegation Of Financial Authority (DFA) 09:35 am - 09:45 am SCM Transition to NNPC Limited: Overview of the Delegation of Authority (DOA) Framework 09:45 am – 10.05 am PIA Team KPMG Delegation of Authority (DOA) - Strategic Decisioning 10:05 am - 10:25 am PIA Team KPMG 10:25 am – 10:45 am PIA Team KPMG 10:45 am – 11:00 am SCM 11:00 am – 12:00 pm All Physical @ Amphitheatre, Delegation of Financial Authority (DFA) - Financial Authority Limits NNPC Towers, Procurement and Contracting under the new DOA regime Abuja Q&A & Wrap-up/ Next Steps Virtual Closing Remarks @ MS Teams 11:55 am - 12:05 pm World of new SLT Lead Reference: numbers 12:05 pm - 12:10 pm CFO Opening Prayer – 2nd Stanza of the National Anthem Oh God of creation, direct our noble cause Guide our leaders right Help our youth the truth to know In love and honesty to grow And living just and true Great lofty heights attain To build a nation where peace and justice reign. HEALTH MOMENT 4 BASIC TIPS IN Preventing and Managing Low Back Pain HEALTH MOMENT Dr C.B Onigbogi NMSL JULY 2022 Dr C.B Onigbogi COMMON CAUSES OF LOW BACK PAIN (LBP) Dr C.B Onigbogi KEY FACTS ABOUT LOW BACK PAIN (LBP) ▪ Back injury occurs through long awkward spine postures, bending, and lifting too quickly. ▪ LBP is the leading cause of job-related disability globally ▪ 84% of adults experience LBP in their lifetime (1 in 3 persons). ▪ 40% of spinal surgeries are unsuccessful (‘failed back surgery syndrome’). ▪ 95% of people with LBP recover within 12 weeks using conservative care options. Watch out for ‘redflag’ symptoms. BASIC TIPS IN PREVENTING AND MANAGING LOW BACK PAIN Dr C.B Onigbogi COMMON HOME REMEDIES Dr C.B Onigbogi LEST WE FORGET. More Movement = Less Back Pain. ..as we march into the new NNPC THANK YOU Dr C.B Onigbogi SAFETY MOMENT 11 SLIPS, TRIPS AND FALLS BY GROUP HEALTH, SAFETY, ENVIRONMENT, AND QUALITY DEPARTMENT Slips, Trips and Falls Slip Trip Fall Quick Facts • Leading cause of injury in the workplace • Mostly occur due to poor housekeeping, insufficient lighting, and improper footwear • Cause about 700 fatalities per year in the U.S. – Bureau of Labour Statistics Slip, trip, and fall hazards Wet Floor Obstruction of access ways Cables across walkways Poorly lit areas Tips to prevent fall accidents Make sure cables are properly arranged and kept away from office aisles Remove all obstructions across access ways Hold the handrails when using the stairway Always wear a shoe with good friction Keep working areas well lit Clean spills immediately Fix good foot mats Avoid rushing Thank you for your attention LOG ONTO MYSAFETY SOLUTION TO REPORT ANY UNSAFE ACT, UNSAFE CONDITION, NEAR MISS, AND ACCIDENT SESSION OBJECTIVES & GROUND RULES 17 NNPC PIA IMPLEMENTATION WALKTHROUGH SESSION FOR MANGEMENT STAFF FROM M6 AND ABOVE: DOA FRAMEWORK 1 2 3 OBJECTIVES 4 To provide insights to several linkages (legal, To walk Management staff regulatory, To clarify governance To obtain on grade levels M6 and structural, and structures, controls and feedback and seek above through the new governance controls) compliance checks to the support DOA/DFA for clear and that exist between the be enforced arising from of Management staff consistent understanding. DOA, DFA and the the new DOA/DFA in driving the required subsidiaries governance framework. change structure GROUND RULES ..your full participation is needed to make this session more productive Time Management: Let’s keep to time and stay focused on the discussion topic Keep phones and mobile devices on silent and away during session Active Participation – everyone has an obligation to engage during the session Be open-minded and collaborative Practice mutual respect: respect every ideas, questions and comments OPENING REMARKS 20 OVERARCHING LEGAL ARCHITECTURE OF THE NEW DOA FRAMEWORK 21 THE OVERARCHING LEGAL ARCHITECTURE NNPC Ltd. Board & Board Committee Charter Level 3 Memorandum and Articles of Association (MEMARTs) Level 1 Delegation of Authority (DOA) and Delegated Financial Authority (DFA) Petroleum Industry Act (PIA) 2021 Level 2 NNPC Limited & Subsidiaries Commercial/ Operational ease/objectives Companies and Allied Matters Act (CAMA) 2020 The Nigerian Code of Corporate Governance (NCCG) 2018 DOA/DFA do not stand on their own. They rest on the shoulders of the law. Public Procurement Act Fiscal Responsibility Act Treasury Single Account 22 UNPACKING THE LEGAL ARCHITECTURE [LEVEL 1] THE OLD FOUNDATIONS [Section 64(a) of PIA Public Procurement Act Fiscal Responsibility Act Treasury Single Account 23 UNPACKING THE LEGAL ARCHITECTURE [LEVEL 1] THE NEW FOUNDATIONS PIA CAMA NCCG 24 UNPACKING THE LEGAL ARCHITECTURE [LEVEL 2] NNPC LTD. & SUBSIDIARIES PIA/CAMA THE MEMARTs The Constitutional Document of a Company Key Elements 25 UNPACKING THE LEGAL ARCHITECTURE [LEVEL 3] NNPC ltd. Board & Board Committee Charter DOA/DFA THE MEMARTs • Alteration of share capital – Section 125 of CAMA • Directors – Articles 3.4 of NNPC Ltd. MEMART; Section 273 of CAMA • External auditors – Section 401 of CAMA • Alteration of Memorandum and Articles of Association. NNPC Ltd. to approve as Shareholder of the Subsidiary through its Board • Mergers, Acquisitions, JVs & Divestments • Changes to Legal Structure. • Dividends - – Articles 3.4 of NNPC Ltd. MEMART; Section 273 of CAMA 26 UNPACKING THE LEGAL ARCHITECTURE [LEVEL 3] NNPC ltd. Board & Board Committee Charter DOA/DFA Financial Authority Limits (Contract, Expenses and Procurement) THE MEMARTs • Subsidiary Board approval • Finance Committee approval • NNPC Ltd. to approve as Shareholder of the Subsidiary through its Board • Annual Budgets - The Board, upon the confirmation of the Shareholders, prescribe and set the annual budget • of the Company • Subsidiary Board to approve Management Team – Article 3.4 of • NNPC Ltd. to pre-approve through NNPC Ltd. MEMART • Board Changes to Name, Mission, Values, Logo and Domain Name – Section 30 of CAMA 27 PRE-TRANSITION TO NNPC LIMITED: DELEGATION OF FINANCIAL AUTHORITY (DFA) 28 Tenders Boards Under the Public Procurement Act (2007) ▪ The PPA 2007 was the primary regulation that guided procurement in NNPC before PIA 2021 ▪ Tenders Board - Contract approving body with delegated powers from the GMD that considered and approved contracts within defined financial thresholds with SCM as Secretariat. ▪ GMD/GEDs/MDs etc were addressed as Chairman (relevant Tenders Board) 1) 2) 3) 4) 5) 6) Federal Executive Council (FEC) NNPC Tenders Board (NTB) DEXCOM Tenders Board MEXCOM/CHQ Divisional (DIVCOM) Tenders Board SBU ED (Divisional) DIVCOM/CHQ Departmental (DEPCOM) Tenders Board PPMC/NPSC/NGC/NGMC Area Managers Tenders Boards The Tenders’ Board is responsible for the approval of: ✓Procurement Strategy ✓Prequalification/Bids (Technical/Commercial) Evaluations reports ✓Negotiated contracts for consultancy and non-consultancy Services ✓Contract variations resulting in price changes; Previous Delegation of Financial Authority (DFA) TRANSITION TO NNPC LTD: NEW DOA AND DFA 32 Agenda S/N Topic Details Start End Overview and value proposition of the new framework for NNPC Limited Guiding principles Key design elements 9:35am 9:45am • • • Overview of focus areas and actions Highlights of strategy and policy matters Subsidiary decision items requiring pre-approval from the parent 9:45am 10:05am • • • • Overview of the DFA and key elements Approval limits for NNPC Limited Approval limits for Subsidiaries Risks and Controls 10:05am 10:25am • 1 2 3 Overview of DOA Framework DOA DFA • • OVERVIEW: DELEGATION OF AUTHORITY (DOA) FRAMEWORK 34 Overview of NNPC Limited’s DOA Framework C. Value Proposition A. Components 1. Delegation of Authority (DOA) 2. Delegated Financial Authorities (DFA) 1. Clarity of roles and responsibilities. 2. Sound stewardship of all resources and assets. The DOA details matters reserved for shareholders, the Board and the matrix of delegated authorities for strategy & policy, governance, legal, HR, finance, risk and assurance matters The DFA is a sub-set of the DOA and it details the financial authority limits delegated to various cadres of Management 4. Effective and informed decision-making. 5. Consistent accountability and reporting throughout NNPC Limited. B. Stakeholders Shareholders of NNPC Limited 3. Management of NNPC Limited’s risks. Board of Directors of NNPC Limited 6. Corporate synergy between NNPC Limited and Subsidiaries. D. Custody Management and staff of NNPC Limited Subsidiaries of NNPC Limited The GRC function shall maintain custody of the DOA while F&A shall maintain custody of the DFA. Both shall ensure effective and efficient functioning of the entire framework. Guiding Principles The DOA Framework was developed with the following guiding principles Compliance with Regulatory Requirements and Leading Standards: • PIA 2021 • CAMA 2020 • NCCG 2018 Alignment with NNPC Limited’s Governance Framework: • MEMART • Board and Board Committee charters • Related policies and procedures including • Contracting and procurement policies • Consequence management framework • Code of ethics • HR policies Adequate Balance of Efficiency and Financial Controls in relation to: • Strategy and goals • Operational realities of NNPC Limited and its subsidiaries Others: • Clarity of roles and responsibilities • Support accountability at all levels • Flexibility to align with proposed organisational structure Key Design Elements Below are the key design elements of the Delegation of Authority Framework 1. Enhanced Stakeholder representation 1. The Board has reserved authority for certain decision items and financial thresholds across the Company and its subsidiaries. 2. Authority required for day-to-day running of the business are delegated to Management. 2. Prudent and Balanced Approval Limits 1. Assigned approval limits shall be exercised in line with the contracting, procurement, code of ethics, and consequence management policies of NNPC Limited 2. The chairmen of each tender committees shall provide the final approval for decision items within their assigned authority limits. 3. Four (4) levels of tender committees are recognized within the DFA to support efficiency where there is a justifiable business case. 3. All contractual items shall be approved through tender committees in line with their assigned authority limits. 4. Assigned financial limits will be determined by the role occupied and not the human resource rank of staff. 4. Interim or sub-delegation shall be provided to substitutes during a delegate’s out of office period. Sub-delegates shall have primary responsibility for actions taken within the interim delegation and provide handover notes on expiration of the period. 3. Six (6) Broad Organisational Focus Areas 4. Incorporates Insights from Benchmarks and Leading Practices 5. Is intended to be aligned with NNPC Limited’s governance and operational policies 6. Includes key policy statements and rules to guide compliance DELEGATION OF AUTHORITY (DOA) 38 Overview of the DOA The DOA framework delineates responsibilities for decision making within NNPC Limited. It covers the following key elements: Matters reserved for shareholders and the Board of Directors Some decisions are reserved for shareholders and the Board while others are delegated to Management. Six (6) Decision Focus Areas The DOA is structured around six (6) focus areas which cover key requirements from governance codes and observations from leading practices. 7 Actions Six (6) Focus Areas* and Sixty-five (65) Decision Items Key Type of Action Description Strategy and Policy I Initiate Risk Management and Assurance C Consult Governance and Board Matters R P Recommend Pre-approve A Approve or reject a request Human Resource Management Legal Finance E INF *All decision making items will be captured within one or more key decision areas Execute Inform Propose a request for approval Consult (seek the views and opinions of other parties) before taking decision Put forward or suggest a proposed decision for approval. Declare support on a matter Grant consent on a matter. Note: Any matter requiring pre-approval shall not be approved by the Subsidiary Boards unless such endorsement has been obtained. Implement the approved decision To notify a party of a decision that has been made Matters Reserved for Shareholders and the Board The following matters are reserved for shareholders and the Board: Matters Reserved for Shareholders 1. Appointment and remuneration of Directors Matters Reserved for the Board 1. NNPC Limited’s Strategy, mission, vision and values 2. Amendment of memorandum and articles of association 2. Extension of the Company’s activities into new business or geographic areas 3. Appointment, remuneration and termination of external auditors 3. Approval of Board and Board Committee charters 4. Mergers, Acquisition, joint ventures and disposals 5. Performance evaluation of NNPC Limited’s Board and Committees 5. Approval of dividends 6. Appointment, promotion, and dismissal of Senior Management 6. Changes to NNPC Limited’s legal structure 7. Significant change in accounting policies or practices 7. Increase of share capital 8. Appointment of first auditors 4. Approval of corporate governance policies 9. Approval of the Company’s annual budget and financial statements 10.Approval of the Company’s IA and GRC frameworks 11.Approval of internal audit plans NNPC Limited – DOA Focus Areas and Matrices The DOA is structured into six (6) focus areas and all decision-making items within NNPC will fall within one or multiple identified focus area(s). Six (6) Focus Areas and Sixty-five (65) Decision Items 7 Actions Key Type of Action Description Strategy and Policy Risk Management and Assurance Governance and Board Matters I Initiate C Consult R P Recommend Pre-approve A Approve or reject a request Human Resource Management Legal E INF Finance Execute Inform Propose a request for approval Consult (seek the views and opinions of other parties) before taking decision Put forward or suggest a proposed decision for approval. Declare support on a matter Grant consent on a matter. Note: Any matter requiring pre-approval shall not be approved by the Subsidiary Boards unless such endorsement has been obtained. Implement the approved decision To notify a party of a decision that has been made Decision Making Authority NNPC Limited IA* CEO* Board Audit Committee (BAC) - I/A**/E - R - - A** - INF INF I/E INF R - - - A - INF INF Decision Making Item Decision Area Internal Audit Decision Area Subsidiary Board Strategy, Finance and Investment Committee (BSFIC) Board Establishment Committee (BEC) Board Sustainability Committee (BSC) Board Shareholders Relevant Subsidiary MD(s) Relevant Subsidiary Board(s) *Management decisions initiated by the CEO and which impact the entire organisation shall be endorsed by SMT. However, IA shall be independent of Management. **Some decisions will be approved at Management Level while others will be approved by the Board NNPC Limited – Strategy and Policy Matters The following depicts the matrix of decisions and actions to be performed by stakeholders under the Strategy and Policy focus area Decision Making Authority NNPC Limited S/N Decision Making Item Board Audit CEO** Committee (BAC) Board Strategy, Finance and Investment Committee (BSFIC) Board Establishment Committee (BEC) Subsidiary Board Sustainability Board Shareholders Committee (BSC) Relevant Subsidiary MD(s) Relevant Subsidiary Board(s) 1 Definition and amendments to mission, vision and values I/E - R - - A - INF INF 2 NNPC strategy formulation I/E - R - - A - INF INF 3 NNPC Limited policy articulation, reviews and approval I/E R* R* R* R* A - INF INF 4 Mergers, Acquisitions, joint ventures and disposals I/E - R - - P A INF INF 5 Investor relations strategy I/E - R - - A - INF - 6 Amendments to NNPC’s organisation structure I/E - R - - A - INF INF 7 Extension of NNPC’s activities into new businesses or geographic areas I/E - R - - A - INF INF 8 Changes to subsidiary company’s logo C - R - - P - I/E A 9 Changes to subsidiary domain name C - R - - P - I/E A 10 Changes to mission and values of subsidiary company I/C - R - - P - I/E A *The policy to be presented to each Board Committee will be in line with the mandate of the Committees per their charter and applicable governance provisions as prescribed in CAMA 2020 or NCCG 2018. Subsidiaries - Key Decision Items Reserved for the NNPC Limited Board Strategy and Policy Matters 1. Changes to a Subsidiary’s legal structure 2. Mergers, acquisitions, joint ventures and disposals 3. Amendment of memorandum and articles of association 4. Changes to Subsidiary name, logo, mission and values. Financial Matters 1. Subsidiary Company’s annual budgets, 2. pre-approval of contracts beyond defined limits 3. Increase of a Subsidiary’s share capital 4. Approval of dividends Human Resource Matters Promotion of staff of Subsidiaries to Senior Management (N3 and above) Board Operations Matters Appointment and removal of directors in Subsidiaries DELEGATION OF FINANCIAL AUTHORITY 44 Delegated Financial Authorities – Overview The delegated financial authorities (DFA) define the financial approval limits for expenditures and commitments to third parties across NNPC Limited and Subsidiary levels. It comprises the following key elements: 11 key policy statements Approval limits for NNPC Limited and Subsidiaries Approval limits for tenders Approval limits for non-tendered expenditure Other elements which should be noted in the course of examining the above are as follows: Subsidiary Classification CAPEX approval limits for subsidiaries are based on the financial classification of the subsidiaries Interim/Sub-Delegation The DFA defines rules for sub-delegation (based on hierarchy) and accountability for authorities exercised during interim delegation Annual Naira Conversion The DFA shall be converted to Naira using the same FX rate as the annual budget. The CFO shall issue a converted DFA at the beginning of each year. Contract Variation Contract variations are only applicable to the Committees chaired by the CEO/MDs Risks and Controls The DFA identifies potential risks (non-exhaustive) and incorporates controls to address the risks. Special Class of Expenditure Significant recurring expenses (e.g. crude handling costs) that form part of cost of sales are classified as “Significant Recurring OPEX” within the DFA. Authority for such items shall be exercised by the CEO and MDs. A business case shall be submitted for the CEO’s approval where it is necessary for such items to be unrestricted to a budgeted amount. Note: Such expenditure shall be endorsed by the CFO for NNPC Limited and ED Finance for Subsidiaries Consequence Management There shall be zero tolerance for contraventions of the DFA and violations shall be dealt with in line with NNPC Limited’s consequence management framework. DFA Policy Statements – NNPC Limited 1. The DFA shall be considered in the development and application of other policies, including the procurement policies to be established by the Company and its subsidiaries. 2. Delegates shall only approve transactions after validating that the Company’s policies and procedures relating to the transactions have been complied with. 3. Management shall implement automated controls over all aspects of the expenditure cycle: Budgeting – Requisition – Tendering – Contracting – Delivering – Invoicing – Payment. 4. There shall be segregation of duties and avoidance of conflicts of interest in procurement and approval of contracts. 5. No expenditure shall be approved unless it is covered within the budget and funded. This shall however not apply to Payroll and any Significant Recurring OPEX which has been assigned an unrestricted budget. 6. The annual budgets shall be presented to the Board for approval before the beginning of the next financial year. Management shall also present a quarterly report to the Board on the performance of the budget, showing the status of each major line of the budget. DFA Policy Statements – NNPC Limited (Cont’d) 7. Budget Owners shall ensure due diligence in categorising and presenting similar projects at the same time. Any attempt to split contracts in order to avoid approval by a higher authority shall be taken as a serious infringement and dealt with in accordance with the Consequence Management Framework. 8. Results of tenders evaluation shall be signed off by at least 2/3rd of members of the evaluation committee either physically or electronically for it to be valid. 9. No payment shall be made unless due process has been followed in line with the contracting and procurement policies of NNPC Limited. 10. Where a decision item is not detailed in the DFA and it is necessary for the day-to-day running of the business or implementation of strategic objectives, it shall be escalated to the CEO for action and reported to the Board at the next meeting. 11. Sub-delegation and accountability for authority exercised during interim delegation shall be in line with the defined rules on sub-delegation, as approved from time to time. DFA Policy Statements - Subsidiaries The overarching policy statements applicable to NNPC Limited shall be incorporated by subsidiaries in addition to the following: 1. Subsidiary budgets shall not be approved by the Board of the subsidiary without pre-approval of the NNPC Limited Board. 2. The NNPC Limited Board shall, on a quarterly basis, review subsidiary financials (Income statements, Balance Sheet and Budget Performance reports). 3. Any deviation from budget will not be tolerated (Payroll and some significant Recurring OPEX being the only exception). 4. Approvals above specified limits for the Subsidiary Boards shall be pre-approved by the NNPC Limited Board or the NNPC Limited Level 1 Tenders Committee, in line with defined limits, before approval by the Subsidiary Board. 5. A Subsidiary shall be re-classified to the appropriate class when it meets the size requirements of that class, following the provision of consecutive audited accounts as evidence. Approval Limits for NNPC Limited – Development Process Key considerations and activities performed in defining the limits and developing the DFA are as follows: Key Considerations for Defining the Limits 1 3 Peculiarities of the Control Environment Financial Performance 5 Key activities Efficiency of Operations Prevalent Practices in the Oil & Gas Industry Comparability of Organisation Structure BUDGET 2 01 Benchmark analysis on practices and limits in comparative institutions. 02 Review of NNPC Limited’s transaction profile and calibration of the limits to the Company. 4 03 Proposal of financial authorities across key categories of expenditure and decision making. 04 Presentation to SLT, SMT and finally the Board for approval. 05 Engagement of stakeholders to develop the policies and automate the DFA. Approval Limits for NNPC Limited and Subsidiaries Below is a snapshot of the approval limits for each level across NNPC Limited and Subsidiaries NNPC Limited Subsidiaries Board >$100m, Unlimited Level 1 Tenders Committee >$8m, <=$100m CEO <=$1m Emergency <=$0.5m Subsidiary Board >$4m, <= $65m Level 2 Tenders Committee >$0.5m, <=$8m Subsidiary Level 1 Tenders Committee >$0.5m, <=$4m Where the value of a request exceeds $65m, the Subsidiary Board shall obtain the pre-approval of NNPC Level 1 Committee (<=$100m) or the NNPC Limited Board (>$100m) before approving such request. MD <=$0.25m Emergency <=$0.1m Level 3 Tenders Committee >$10k, <=$0.5m Level 4 Tenders Committee <=$10k Subsidiary Level 2 Tenders Committee >$10k, <=$0.5m Subsidiary Level 3 Tenders Committee (HoD/HoS) <= $10k Creation of Level 4 Tender Committees at NNPC Limited and any new Level 2/3 Tender Committee at Subsidiaries shall be on the basis of a business case which shall be approved by the NNPC Limited CEO Note: Limits for specific commitments (e.g. CAPEX) may differ from the above as detailed in the limits for contractual and noncontractual decisions. Approval Limits for NNPC Limited – Tenders Below are the approval limits for contractual commitments across NNPC Limited: Approving Authority OPEX CAPEX Competitive Tendering NNPC Limited Board Single source All Competitive Tendering Single source ($) Contract Variation >$100m >$8m >$100m >$8m Unlimited Level 1 Tenders committee >$8m, <=$100m >$4m, <=$8m >$8m ,<=$100m >$4m, <=$8m <=15% Level 2 Tenders Committee >$0.5m, <=$8m <=$4m <=$8m <=$4m N/A Level 3 Tenders Committee >$10k, <=$0.5m >$5k, <=$0.25m N/A N/A N/A Level 4 Tenders Committee <=$10k <=$5k N/A N/A N/A <=$1m <=$0.5m N/A N/A <=15% (Emergency) (Emergency) CEO Note: The DFA does not prescribe tendering/selection methods, it only specifies the limits that apply. Refer to the procurement policies for guidelines on tendering/selection methods. Variations above 15% shall move to the next higher level of authority Approval Limits for NNPC Limited – Non-Tendered Expenditure Below are the approval limits for non-contractual expenditure across NNPC Limited: Legal settlements and judgments Business Travel, Training, Conferences, Professional Subscriptions Payroll including pension, gratuity, and other benefits Statutory/Regulatory Payments and Organisational Dues Utilities and office lease/rent >$100m >$100m >$100m Unlimited N/A N/A Unlimited Unlimited** Level 1 (CEO) >$8m, <=$100m >$8m, <=$100m <=$100m >$8m, <=$100m Unlimited Unlimited >$8m, <=$100m $0.25m Level 2 (GED equivalent) >$0.5m <=$8m >$0.5m <=$8m N/A >$0.5m <=$8m N/A N/A >$0.5m <=$8m N/A Level 3 (GGM equivalent) >$10k, <=0.5m >$10k, <=0.5m N/A >$10k, <=0.5m N/A N/A >$10k, <=0.5m N/A <=$10k <=$10k N/A N/A N/A N/A N/A N/A Approving Authority NNPC Limited Board Level 4 (GM equivalent) • • Significant Recurring OPEX**** Donations and Gifts in line with the Donation policy Emergency Payroll and Significant Recurring OPEX shall not be subject to a budgeted amount but shall be reported to the Board at the next meeting. Payroll and Significant Recurring OPEX shall be endorsed by the CFO and approved by the CEO Approval Limits for Subsidiaries - Classification of Subsidiaries For efficiency and governance, NNPC Limited’s subsidiaries have been classified into three (3) as detailed below. Approval limits for CAPEX shall be defined in line with a subsidiary’s classification. Financial Significance High Subsidiaries with total Assets >=N1trn Class A Subsidiaries Class B Subsidiaries Subsidiaries with total assets >=N70bn and <N1trn Moderate Re-classification process: 1. Annual review of audited financial statements for two consecutive years by Head of Directorate and MD to determine the appropriate classification for a subsidiary 2. Submission of re-classification request memo to the CEO, through the CFO. Class C Subsidiaries 3. Review and approval by the CEO Subsidiaries with total Assets <N70bn Low Note: The CEO shall inform the Board of such re-classification at the next meeting of the Board. See Appendix VIII for the detailed process. Approval Limits for Subsidiaries – Tenders Below is the delegation of authority for approval of contracts across NNPC Limited and Subsidiaries: All Classes Class A Class B OPEX Approving Authority All Classes All CAPEX Single source Competitive Tendering >$100m >$8m >$100m >$8m >$100m >$8m >$100m >$8m Unlimited >$65m, <=$100m >$4m, <=$8m >$8m ,<=$100m >$4m, <=$8m >$8m ,<=$100m >$3m, <=$8m >$8m ,<=$100m >$2m, <=$8m <=15% Subsidiary Board >$4m, <= $65m >$2m, <= $4m >$4m, <=$65m >$2m, <= $4m >$1m, <=$30m >$0.5m, <= $3m >$0.5m, <=$15m >$0.25m,<= $2m <=15% Subsidiary Level 1 Tenders Committee >$0.5m, <=$4m >$0.25m, <=$2m >$0.5m, <= $4m >$0.25m, <=$2m >$0.5m, <=$1m >$0.25m, <=$0.5m >$0.25m, <=$0.5m >$10k, <=$0.25m <=15% Subsidiary Level 2 Tenders Committee >$10k, <=$0.5m >$5k, <=$0.25m <=$0.5m <=$0.25m <=$0.5m <=$0.25m <=$0.25m <=$10k N/A*** Subsidiary Level 3 Tenders Committee <=$10k <=$5k N/A N/A N/A N/A N/A N/A N/A <=$0.25m <=$0.1m N/A N/A N/A N/A N/A N/A <=15% (Emergency) (Emergency) NNPC Limited Board (Preapproval) NNPC Limited Level 1 Committee (Preapproval) Competitive Tendering Class C Subsidiary MD Single Source Competitive Tendering Single source Competitive Tendering Single source Contract Variation Approval Limits for Subsidiaries – Non-Tendered Expenditure Below is the delegation of authority for approval of non-tendered expenditure across NNPC Limited and Subsidiaries: Legal settlements and judgments Business Travel, Training, Conferences, Professional Subscriptions Payroll including pension, gratuity, and other benefits Donations and Gifts in line with the Donation policy Approving Authority Statutory/Regulato ry Payments and Organisational Dues Utilities and office lease/rent NNPC Limited Board (Pre-approval) >$100m >$100m >$100m N/A N/A N/A Unlimited Unlimited NNPC Ltd Level 1 Tenders Committee (Pre-approval) >$65m, <=$100m >$8m, <=$100m <=$100m N/A N/A N/A N/A N/A Subsidiary Board >$4m, <=$65m >$4m, <=$65m >$4m, <=$65m >$4m, <=$65m N/A N/A Budgeted amount N/A Subsidiary MD >$0.5m, <=$4m >$0.5m, <=$4m <=$4m <=$4m Unlimited Unlimited <=$4m <=$0.1m Subsidiary Level 2 >$10k, <=0.5m >$10k, <=0.5m N/A N/A N/A N/A N/A N/A Subsidiary Level 3 <=$10k <=$10k N/A N/A N/A N/A N/A N/A • • • Significant Recurring OPEX**** Emergency Payroll shall not be subject to a budgeted amount. Where it is justified through an approved business case, a Significant Recurring OPEX shall not be subject to a budgeted amount but shall be reported to the Board at the next meeting. Payroll and Significant Recurring OPEX shall be endorsed by the ED Finance and approved by the MD Application of the DFA – Payments • No payment shall be made unless due process has been followed in line with the contracting and procurement policies of NNPC Limited. • Payments shall be executed as follows: ❑ All cash payment, e-payment or cheque payment instructions shall be approved by two signatories in line with the bank mandate and categorization of signatories of NNPC Limited and Subsidiaries. ❑ No payment shall be approved without confirmation from Finance that all requisite documentation are in place and necessary controls such as three-way matching have been executed. ❑ Payments to corporate entities shall not be made to individuals. ❑ There must be compliance with fiscal obligations such as VAT deduction and remittance when executing payments. ❑ No payment domiciliation without the endorsement of the CFO and CEO’s approval. Bank Mandates Signatory A (Operations) Signatory B (Finance) Comparison of NNPC Limited’s High Level DFA to the Corporation’s DFA Board >$100m Level 1 Tenders Committee >$8m, <=$100m Level 2 Tenders Committees >$0.5m, <=$8m Level 1 Tenders Committee shall have $200m approval limit following fulfilment of conditions set by the Board Subsidiary Board >$4m, <= $65m Level 3 Tenders Committees >$10k, <=$0.5m Level 4 Tenders Committee <=$10k Level 1 (CEO) <=$1m emergency <=$0.5m Subsidiary Level 1 Committee >$0.5m, <=$4m Subsidiary Level 2 Committee >$10k, <=$0.5m Subsidiary Level 3 Committee <=$10k Key changes • All limits have increased significantly to allow for efficiency at all levels while ensuring oversight • Increase in positions with approving authorities • Defined limits will be converted to naira at the budgeted FX rate at the beginning of the financial year. Subsidiary Level 1 (MD) <=$0.25m Emergency <=$0.1m Risk Areas and Controls S/N RISK MITIGATION 1 Budget Violation • NNPC shall maintain budget guidelines and periodically review the guidelines. 2 Abuse of emergency approvals • Periodic budget performance reporting to the Board. 3 Conflict of Interest in decision making • Mandatory reporting on emergency approvals at the next Board meeting with justification • Periodic monitoring and reporting of key risk indicators by GRC • Provision of assurance on compliance with policies and procedures by Internal Audit. • Implementation of of whistleblowing mechanisms • Consequence Management for violations • Interim delegation shall be automatically assigned to substitutes on the basis of hierarchy when Delegates are out of 4 Delayed approvals due to absence of delegates 5 Abuse of authority by subdelegates 6 7 Variations in contracts Abuse of significant recurring OPEX office • Sub-delegates shall have primary responsibility for decisions during interim delegation • Mandatory submission of handover notes by sub-delegates and review by delegates • Limitation of variation to Board, Level 1 committees and CEO/MDs • Continuous review and root cause analysis by GRC to identify and mitigate the root causes of variations • Significant recurring OPEX shall be within the thresholds of an approved budget unless there is a business case to justify a non-restriction. • Significant recurring OPEX shall be endorsed by the CFO/ED Finance prior to approval. It shall also be reported to the Board at the next meeting. Note: During implementation, there will be continuous checks to identify risks. Controls will be designed to mitigate the risks, with automation as a driver. Key Points to Remember 1. All Delegates shall be accountable for their actions within the DOA framework and final approval shall be given by the assigned Delegates. 2. Subsidiaries are to be reclassified when they meet the condition for re-classification. 3. Non-restriction of Significant recurring OPEX to a budget amount is not automatic. Level 4 Tender/Subsidiary Level 2/3 Committees are also not automatic 4. Where a decision is not specifically identified in the DFA, such shall be escalated to the CEO for consideration. 5. The payment process no longer involves pre-payment audit 6. Interim delegation makes a subdelegate accountable for his decisions and handover notes must be provided at the end of the interim delegation 7. Risks and controls have been identified to support the effectiveness of the DFA 8. The limits will be converted to naira annually using the FX rate applied to the annual budget 9. Automation will be used to drive controls within NNPC Limited and its subsidiaries Below are matters that require endorsement by the relevant Head of F&A: 1. Payroll and Significant Recurring OPEX shall be endorsed by the CFO or ED Finance in NNPC Limited and Subsidiaries respectively. 2. Contract variations by Management shall be endorsed by the CFO or ED Finance. Variations above 15% shall go to the next higher level in the hierarchy. 3. Emergency expenditures shall be endorsed by the CFO or ED Finance. Appendices Appendix I – Committee Structure – NNPC Limited Committee Composition Quorum • Chairman: CEO • All Level 2 (N-1/GED equivalent) at NNPC Limited Level 1 Tenders Committee • Reps of Finance, Planning & Legal • Head of SCM or designated nominee - Secretary to the Committee • Chairman: Level 2 (N-1/GED equivalent) • All Level 3 (N-2/GGM equivalent) within the directorate Level 2 Tenders Committee • Relevant Level 4 (N-3/GM equivalent) within the directorate within the directorate • Reps of Finance, Planning & Legal • Head of SCM or designated nominee –Secretary to the Committee • Chairman – Level 3 (N-2/GGM equivalent) Level 3 Tenders Committee • All Level 4 (N-3/GM equivalent) within the division • Reps of Finance, Planning & Legal • Head of SCM or designated nominee –Secretary to the Committee • Chairman – Level 4 (N-3/GM equivalent) Level 4 Tenders Committee • All Level 5 (N-4/Manager equivalent) within the department • Reps of Finance, Planning & Legal • Head of SCM or designated nominee –Secretary to the Committee 2/3 of members Appendix II – Committee Structure - Subsidiary Committee Composition Subsidiary Level 1 Tenders Committee • • • • Chairman – MD All Level 2 (N-3/GM equivalent) in the Subsidiary Reps of Finance, Legal, ETSD, Planning Head of SCM or designated nominee – Secretary to the Committee Subsidiary Level 2 Tenders Committee • • • • • Chairman – Relevant Level 2 (N-3/GM equivalent) of the Subsidiary Departmental Heads (N-4/Manager equivalent) Reps of Finance, Legal, ETSD, Planning Head of SCM or designated nominee – Secretary to the Committee • Chairman – Level 3 of the Subsidiary (N-4/Manager equivalent) Subsidiary Level 3 Tenders Committee • Deputy Managers/Sectional Heads or their representatives • Representative of F&A, Planning, Support Services and Legal • Head of SCM or designated nominee – Secretary to the Committee Quorum 2/3 of members Appendix III - Rules on Sub-delegation Below are the rules on Sub-delegation within NNPC Limited and its subsidiaries Description No. 1 • All employees and committees shall be aware of and abide by their authority limits. If employees or committees do not have the authority necessary to approve a transaction or are unavailable to exercise such authority, it should be forwarded to their Manager/Supervisor/Chairman who will forward it to the next higher direct reporting level if their authority level is not sufficient. • Each delegate shall ensure that he/she exercises his functions only after checking that all previous steps have been correctly fulfilled; • Where in doubt, employees and Committees shall seek further clarification from the Legal department or F & A. 2 • Each Delegate(s) where applicable may have one or more potential Substitutes on the basis of hierarchy, as approved by the Board/CEO/MD. • During the absence of a Delegate, his authorities can be temporarily transferred to a Substitute, who shall exercise all or only specified authorities of the Delegate. • For such interim authority to be valid, the Substitute shall have been so identified earlier in the Individual Delegation sheet approved by the CEO/MD and the Delegate shall sign an interim memo appointing his Substitute. In other words, a Substitute exercises Authority only in the circularized absence of the Delegate. • The memo shall stipulate the start and end dates of the interim Delegation. • The Sub-delegate shall at all times be limited to Authorities specifically delegated to him. If there is more than one Substitute, the Authorities shall be exercised by the individual specifically indicated in the circularized memo. In the event of the absence of both Delegate and Substitute(s), the corresponding Authorities revert to the next higher level. Note: Electronic signatures are an acceptable method of signing the interim memo. 3 • Sub-delegates shall provide handover notes to the Delegates on resumption of the Delegates. Delegates shall review the handover notes and take necessary steps to correct deficiencies identified in relation to exercise of authorities in their absence. • Sub-delegates shall however have primary responsibility for their actions during the absence of the Delegate. • Circumvention of controls and violation of policies shall be treated in line with the Company’s consequence management framework. 4 IT access rights of any staff shall be in accordance with the delegation that has been given to the staff. 5 Where, owing to circumstances, a delegate would be out of office (vacation, training, sick leave, 1. Where the delegate is able to Sub-Delegate, shall sign and circularize an interim memo as described in this section. and conferences), the following shall apply: 2. Where the delegate is unable to personally initiate the memo, the Sub-Delegate shall initiate a memo which shall be jointly approved by the Head of Legal, the Head of HR and where the delegate concerned is not the CEO/MD, the CEO/MD. Appendix IV - Matters Requiring Dual Approval Below are matters that require the joint approval of the relevant Head of F&A: 1. Payroll and Significant Recurring OPEX shall be endorsed by the CFO or ED Finance in NNPC Limited and Subsidiaries respectively. 2. Contract variations by the CEO or Level 1 Committees shall be endorsed by the CFO or ED Finance. 3. Emergency expenditures shall be endorsed by the CFO or ED Finance. Appendix V - Activation of Level 4/New Subsidiary Level 2 & 3 Tenders Committee When an NNPC Limited or subsidiary division identifies that it can only operate efficiently by having a Level 4 or new subsidiary Level 2 & 3 tenders committee take ownership of some expenditure, it shall seek for the creation of the committee. This shall be done through the following steps: 1. The Level 3 heading the relevant division or Level 1 in the case of subsidiary shall document a business case, including the risks and controls. The Level 1 in the case of the subsidiary will require to pass the business case first to the subsidiary Board for its Pre-Approval 2. The business case shall be channeled through the Business Head (SMT rep) to the Company GRC and SCM functions who after consideration will submit to the CFO 3. The NNPC Limited CFO shall review the feedback of GRC and SCM functions before making a recommendation to the NNPC Limited CEO. 4. The NNPC Limited CEO shall approve where the business case is justified. Appendix VI - Activation of Significant Recurring OPEX When a subsidiary identifies that it may need more flexibility to purchase cost of goods and generate revenue, it may seek for its significant recurring OPEX to be unlimited and not subject to a budgeted amount. This shall be done through the following steps: 1. The MD shall document a business case itemising the significant recurring OPEX, risks and controls. He will require to pass the business case first to the subsidiary Board for its Pre-Approval 2. The business case shall be submitted to NNPC Limited through the Business Head (SMT rep) to the CFO, via the GRC and budget functions in NNPC Limited 3. The NNPC Limited CFO shall review the feedback of GRC and budget functions before making a recommendation to the NNPC Limited CEO. 4. The NNPC Limited CEO shall approve where the business case is justified. Appendix VII - Exceptional Scenarios Scenario Emergency Contracting and/or Expenditure Definition Emergency expenditure in the Delegation of Financial Authority shall mean expenditure arising from events when a prompt decision may be required to either preserve an asset or contain the emergency involving a risk to health, safety of the environment or to the physical integrity of any asset. Conditions Controls The need for emergency expenditure is warranted on the grounds of their impact on business operations. They may include: • The NNPC Limited CEO and Subsidiary MDs shall have the power to authorise the expenditure of such emergency commitments up to their respective financial authority for emergency expenditure as prescribed in the DFA • Significant cost to mitigate a risk to health, safety of the environment or the physical integrity of any of NNPC Limited's facilities • The CEO and MDs shall officially inform the applicable Tender Committee on the nature of the emergency expenditure within a week of the expenditure • Expenditure required to de-escalate the realisation of a risk of a significant nature that poses significant challenges to the operations of the business and its going concern • Extra-budgetary emergency commitments shall also be presented to the Board for ratification at the next Board of Directors meeting Appendix VIII – Subsidiary Reclassification Each subsidiary of NNPC Limited shall be classified as Class A, B or C in line with a criteria defined in this document. Subsidiaries may need to be reclassified from time to time due to growth, decline or changes in the nature of the business. The following steps shall be adopted for such reclassification: 1. Annually, on receipt of the audited financial statement for a subsidiary, each Head of Directorate and the MD shall review the audited financial statement for the two preceding years to determine the appropriate classification for the subsidiary. 2. The value of total assets for applicable subsidiaries shall be used to determine the appropriate classification. 3. Where any subsidiary qualifies for reclassification, The Head of Directorate shall submit the a memo requesting such reclassification to the CFO. 4. The CFO after review and confirmation, will recommend the reclassification request to the CEO for approval 5. The CEO shall review the memo and approve the reclassification on the basis of the evidence provided. 6. The approved memo shall be forwarded to ITD and relevant departments for implementation. The MD of the subsidiary shall also present a copy of the memo to the subsidiary Board for adoption. 7. The CEO shall inform the Board of such reclassification at the next meeting of the Board. Appendix IX - NNPC Limited – Financial Matters Decision Making Authority NNPC Limited S/N Subsidiary CEO BAC BSFIC BEC BSC Board Shareholders Relevant Subsidiary MD(s) Relevant Subsidiary Board(s) Decision Making Item Budgeting 1 NNPC’s annual budgets I/E - R - - A - - - 2 Subsidiary company’s annual budgets C - - - - P - I/E A Accounting 3 Significant change in accounting policies or practices I R INF - - A - INF INF 4 Audited interim financial statements I R - - - A - - - 5 Audited annual financial statements of NNPC Limited I R - - - P A - - Treasury 6 Treasury policies I/E - R - - A - - - 7 Dividend policy I/E - R - - A - - - 8 Dividend pay out I/E R C - - P A - - 9 Borrowing and financing I/E - R - - A - - - 10 Changes to capital structure including issuing new capital, share issue, share allotment, etc. I/E - R - - P A - - 11 Guarantees to related companies and third parties I/E - R - - A - - - 12 Financial authority limits I/E - R - - A - - - 13 Opening and closing of bank accounts I/E - R - - A - - - Taxation 14 Tax policies I/E - R - - A - INF INF 15 Significant tax restructuring exercise I/E - R - - A - INF INF I/E* - R - - A* - INF INF- Expenditure 16 Contracting & procurement policies 17 Capital and operating expenditure within budget I/E/A* - R - - A* - - - 18 Capital and operating expenditure outside budget I/E/A* - R - - A* - - - 19 Related party transactions I/E R - - - A - - - I/E - R - - A*/P A* - - Asset Management 21 Asset disposals, write offs, write on New DOA/DFA Framework: Procurement and Contracting 70 Outline ▪ Transition to NNPC Limited: Look & Feel of the new Tenders Boards ▪ Tenders Board Structure – NNPC Limited/Subsidiaries ▪ Contracting and Procurement Limits – Subsidiaries ▪ What has changed? ▪ Comparison to Previous DFA ▪ Dos and Don'ts ▪ Conclusion Post-Transition to NNPC Limited: Tenders Boards Tenders Board is a Contract Approving Body that considers and approves contracts within defined financial thresholds. The Tenders Board are as follows: NNPC Ltd CHQ Subsidiary Tenders Boards • NNPC Ltd Board • SBU Board • Level 1 (NNPC Ltd Tenders Board) • Level 1 (MD’s MEXCOM Tenders Board) • Level 2 (CHQ DEXCOM Tenders Board) • Level 2 (ED’s DIVCOM Tenders Board) • Level 3( CHQ DIVCOM Tenders Board) • Level 3 (Manager’s Tenders Board) • Level 4 (CHQ DEPCOM Tenders Board) Committee Structure – NNPC Limited Committee NNPC Ltd Board Level 1 Tenders Committee (NNPC Ltd Tenders Board) Composition • As Constituted Threshold >$100m, Unlimited* • Chairman: CEO • All Level 2 at NNPC Limited >$8m, <=$100m • Reps of Finance, Planning & Legal • Group Head of SCM - Secretary to the Committee • Chairman: Level 2 (GED equivalent) Level 2 Tenders Committee (DEXCOM Tenders Board) Level 3 Tenders Committee (DIVCOM Tenders Board) Level 4 Tenders Committee (DEPCOM Tenders Board) • All Level 3 within the directorate >$0.5m, <=$8m • Relevant level 4 within the directorate • Reps of Finance, Planning & Legal • Group Head of SCM or designated nominee –Secretary to the Committee • Chairman – Level 3 (GGM equivalent) • All Level 4 within the division >$10k, <=$0.5m • Reps of Finance, Planning & Legal • Group Head of SCM or designated nominee –Secretary to the Committee • Chairman – Level 4 (GM equivalent) • All Level 5 within the department • Reps of Finance, Planning & Legal • Group Head of SCM or designated nominee –Secretary to the Committee <=$10k Committee Structure - Subsidiary Committee SBU Board Composition As Constituted • SBU Level 1 • Tenders • Committee (MTB) • Chairman – MD All Level 2 in the Subsidiary Heads of Finance, Legal, User Department, Planning Head of SCM or designated nominee – Secretary to the Committee • • • • Chairman – Level 2 of the SBU Departmental Heads Reps of Finance, Legal, Planning Head of SCM or designated nominee – Secretary to the Committee SBU Level 2 Tenders Committee (ED Level) SBU Level 3 Tenders Committee (Manager level) Threshold >$4m, <= $65m >$0.5m, <=$4m >$10k, <=$0.5m • Chairman – Level 3 of the SBU • Deputy Managers/Sectional Heads • Representative of Finance, Support Services • Head of SCM or designated nominee – Secretary to the Committee <=$10k What Has Changed? S/N EXISTING NEW 1 Compliance to Public Procurement Act 2007 mandatory Exemption from Public Procurement Act 2007 2 Certain level of approvals go to FEC All approvals ends within NNPC Limited with Board as the highest approving body 3 The same approval threshold for all SBUs regardless of asset base and nature of business Classification of SBUs based on asset base and nature of business 4 Approval limits based on Tenders Board thresholds Approval limits based on Tenders Board, Sourcing Strategy and expenditure type (CAPEX, OPEX etc) 5 Imprest and Cash Advance were used for low value and urgent procurements Introduction of Purchasing Card (P-Card) 6 Sign-off by the GMD, MDs and EDs mandatory for Tenders Board approvals except for NTB Sign-offs are not required 7 All Tenders Boards could approve contract price variation up to 15%. Only the CHQ and SBU level 1 Tenders Boards can approve variations 8 All approvals goes to the relevant Tenders Board Non-contractual approvals by Senior Managers (Statutory payment, Utility bills etc). 9. Fixed Exchange Rate for approval thresholds Exchange Rate used for the Annual Budget shall apply for approval thresholds. Comparison of NNPC Limited’s High Level DFA to the Corporation’s DFA Board >$100m Level 1 Tenders Committee >$8m, <=$100m Level 2 Tenders Committees >$0.5m, <=$8m Level 1 Tenders Committee shall have $200m approval limit following fulfilment of conditions set by the Board Subsidiary Board >$4m, <= $65m Level 3 Tenders Committees >$10k, <=$0.5m Level 4 Tenders Committee <=$10k Level 1 (CEO) <=$1m emergency <=$0.5m Subsidiary Level 1 Committee >$0.5m, <=$4m Subsidiary Level 2 Committee >$10k, <=$0.5m Subsidiary Level 3 Committee <=$10k Key changes • All limits have increased significantly to allow for efficiency at all levels while allowing for adequate oversight • Increase in positions with approving authorities Subsidiary Level 1 (MD) <=$0.25m Emergency <=$0.1m Dos & Don’ts Dos Don’ts 1. 2/3 of members (quorum) must be in attendance and 1. Commitment beyond established threshold meetings shall be chaired by the chairman or his alternate 2. Bid Rigging:– pre-arrangement of offers where winners have been predetermined 2. Meetings are not valid where neither the substantive chairman nor the substantive secretary are in attendance 3. Any Member who is unable to attend a scheduled meeting due to exigency of duties shall communicate to 3. Collusion to breach the contracting process 4. Splitting of contracts to avoid monetary threshold the Tenders Board Secretary via email before the 5. Bribery or giving assistance/soliciting regarding contracts scheduled meeting 6. Inflation of contract prices 4. Members are accountable for decisions endorsed by their delegates 5. Substitute(s) to attend only when properly delegated 6. For Split Currency - Convert Naira portion into Dollar, sum up the two and present at the appropriate Tenders Board for consideration 7. Award of contract without Budget provision and approval 8. Misapplication of sums approved for particular projects or service Conclusion Notwithstanding the changes in the DOA/DFA framework, the fundamental principles of • • • • Transparency, Accountability, Value for Money and Efficiency in procurement, contracting and related activities remain unchanged. Q&A 79 WRAP UP/NEXT STEPS 80 CLOSING REMARKS 81 THANK YOU