Auditor-General calls out NSSF on 56pc returns fall
Pension managers at the National Social Security Fund (NSSF) spent Sh64 out of every Sh100 delivered to beneficiaries indicating poor performance of the fund, which has lost billions of shillings in doubtful investments.
The fund reported 56.7 percent decline in returns from Sh20.6 billion in 2018 to Sh8.9 billion at the end of June 2019. Therefore, NSSF incurred a loss of Sh12.4 billion on the Nairobi Securities Exchange (NSE) alone.
Despite the dip, staff, administrative and provisioning costs went up to chip away Sh5.7 billion in 2019, up from Sh5.1 billion in the intervening period.
The auditor-general was dismayed by the mismanagement that lost the funds millions of shillings in sour bonds and fixed deposits, operational failures that delayed collection of billions of shillings in pension remittances as well as conflicting accounts kept at the State pension manager.
Fixed accounts
“Return on investments declined from Sh20.6 billion in 2018 to Sh8.9 billion in 2019. The decline was mainly attributed to the poor run of prices at the Nairobi Securities Exchange resulting [in] Sh12.4 billion book loss on the fund’s equity assets listed at the exchange,” said NSSF chief executive Anthony Omerikwa.
NSSF lost Sh996.4 million in fixed accounts and corporate bonds at Chase and Imperial banks invested through Britam, GenAfrica, Old Mutual and Stanlib. Sh666.9 million in bonds cannot be recovered and pensioners have been setting aside provisions to cover the losses.
However, it recovered Sh53.3 million from Imperial Bank and Sh53.9 million from Chase Bank out of the Sh329 million that were deposited at the two lenders in fixed income accounts.
The auditor-general has raised concern about operations at NSSF after management failed to explain differences in records kept with actual money in some of its bank accounts.
Ms Nancy Gathungu said NSSF claimed it had Sh198.4 million in National Bank accounts, which they had, in fact, overdrawn by Sh268 million, thus casting doubt on the book figures indicating that it had cash balances of Sh419.3 million.
Bank reconciliation showed there were receipts in banks of Sh2 billion but NSSF records indicated Sh1.6 billion only.
Blamed Covid-19
Records aside, outstanding members’ contributions had hit Sh5.8 billion by April 2020 with no explanation on why the money is not being collected.
Management was also put to task regarding delays in completing the Sh4 billion Hazina Towers in Nairobi’s central business district. The project had incurred an additional Sh871 million claim by the contractor for stoppage of works.
Management blamed Covid-19 disruptions on supply chains. BY DAILY NATION
Post a Comment