Sh 5.6 Billion — Questions raised over missing money at NSSF

KES 5.6 billion

The Nationwide Social Safety Fund (NSSF) can not account for billions of shillings of employees’ month-to-month contributions.

This places in danger the advantages of 1000’s of employees who retire yearly.

It has emerged that the company’s e-book of accounts has a Sh5.6 billion gap in unremitted contributions due to its failure to implement the authorized provisions mandating it to make sure that employers deduct cash from employees and remit it to the Fund on time.

The Auditor-Common’s report on NSSF for the 2017/18 monetary 12 months additional casts doubt on the accuracy of Sh14 billion that’s indicated because the steadiness of the members’ contributions as of June 30, 2018.

A overview of members’ contributions standing from 183 branches throughout 5 areas of the company exhibits that excellent contributions and associated penalties stood at Sh6.three billion as of June 30, 2018.

Of this determine, Sh1.7 billion was in excellent unremitted contributions whereas the steadiness of Sh4.5 billion was associated to accrued penalties.

INACCURATE FIGURES

The report tabled within the Nationwide Meeting final week says whereas the company’s restoration efforts had borne fruit, solely Sh771 million had been collected by March 2019, leaving an impressive steadiness of Sh5.6 billion.

“The recoverability of the unremitted members’ contributions gathered through the years amounting to Sh5.6 billion stays uncertain,” says the report signed by retired Auditor-Common Edward Ouko.

The legislation offers NSSF the facility to impose fines on employers who fail to adjust to any of its many provisions, together with late remission of statutory contributions.

Whereas the company had indicated that the steadiness of members’ contributions stood at Sh14 billion as of the top of the monetary 12 months, a overview of assortment data and associated paperwork for the 12 months underneath audit disclosed variances.

For instance, the month-to-month stories generated from the Software program and Social Safety Pension Administration System (SSPAS) confirmed that month-to-month collections for the 12 months stood at Sh14,016,684,188.61 whereas the determine in monetary statements was Sh14,044,262,078, translating right into a distinction of Sh27.5 million.

However, whereas the SSPAS confirmed that the NSSF international report on the contributions was Sh14,030,656,823.31, the one captured by the monetary statements was Sh14,044,262,078, indicating a variance of Sh13.6 million.

MISSING RECEIPTS

The administration says the variance between the worldwide and month-to-month assortment is as a result of department stories don’t embody M-Pesa funds, miscellaneous earnings and funds receipted by reconciliations.

However the auditor rejects the reason, saying it isn’t clear why the receipts weren’t mirrored within the department stories since receipting underneath SSPAS is centralised.

“In any case, reconciliation between quantities within the international and department stories was not offered for audit verification,” the report says.

Equally, the contributions in transit, representing contributions that had not been posted to particular person member accounts, declined by Sh99 million within the 12 months underneath overview from Sh762 million within the 2016/17 monetary 12 months to Sh663 million within the following 12 months.

The Retirement Advantages Act requires NSSF to take care of employer contributions, clearing accounts the place whole contributions are posted from the employers to the credit score of members’ account for the settlements of advantages upon qualification.

The NSSF didn’t do that, and the Auditor-Common accuses the administration of failing to reconcile and put up the remaining steadiness of Sh663 million, which has gathered through the years to the respective members’ accounts.

HAZINA TOWERS

The report additional questions the Sh6 billion price of property the company has put underneath building.

Whereas the audit questioned NSSF for failing to gather Sh2.eight billion from patrons of its govt flats at Milimani in Nairobi County, it doubted whether or not the Hazina Towers could be accomplished by the brand new revised date of June 2019, and with the revised contract sum of Sh4 billion.

The development of Hazina Towers in Nairobi began in 2013 and was to be undertaken in 155 weeks with a completion date of July 2016.

Nevertheless, in the course of the audit, the works have been scaled right down to 15 flooring from the preliminary 34 flooring, whereas the contract sum was lowered to Sh4 billion from Sh6.7 billion.

The contractor for the flats — Nanchang Overseas Engineering Firm (Kenya) Ltd — accomplished the challenge at a price of Sh1.6 billion and handed the homes to the company in April 2018.

LAND SALE

The board accredited the sale of the homes and it was anticipated that the company would accumulate Sh3.6 billion, however though it realised whole gross sales, it acquired a paltry Sh753 million as of April 2019, the date of the handing over.

The audit additional questions the irregular disposal of the company’s underdeveloped 70-acre piece of land in Mavoko, Machakos, which has put to threat investments price Sh126 million.

The land was subdivided into seven plots of 9.88 acres every and disposed off at Sh18 million every.

The plots have been offered to AMS Properties Ltd at a complete value of Sh126 million. Nevertheless, solely sh12.6 million was paid whereas the steadiness has by no means been paid so far.