By Kebba AF Touray
According to the Performance Audit Report of the National Audit Office (NAO), a sum of D12.1 Million is owed to the Social Security and Housing Finance Corporation (SSHFC) by tenants occupying the NTC Complex in Banjul.
NAO made this disclosure in its 2023 Audit Performance Report (APR) on the SSHFC.
According to NAO, the Investment Committee of the Department of Finance and Investment was last active in 2018, due to a change in the Corporation’s leadership, and said investment decisions were taken by the Board based on the recommendation made by the Managing Director and the Investment Department.
“This has impacted negatively on the ability of SSHFC to effectively undertake investments that maximize returns for the members. As a result, according to the Internal Audit Report on Investment dated 23 October 2019, social security investment decisions were normally given to select committees on an ad hoc basis,” NAO reported; adding that the dormancy of the committee also affected the monitoring of investments, and that a review of the Internal Audit Report on Investment revealed that SSHFC has not effectively monitored its investment portfolios.
According to the audit report for the year 2019, investment properties accounted for 34 percent of the investment portfolios of the NPF.
SSHFC Activity Report for 2019 disclosed that the return on the investment properties portfolio was 25.4%, being the highest return on any portfolio held by SSHFC. However, it added that the Internal Audit Report on Investment has said the Department of Finance and Investment has not maintained proper documentation and review of the annual tenancy agreement for one of the investment properties (i.e. the NTC Complex) since January 2015.
“This has resulted in GMD12.1 million arrears owed to SSHFC by the tenants of this property. For the year 2019, this represents 8.9% of the total income that the Corporation reported, and it is 137.5 percent of rental income from investment properties that the Corporation held,” NAO disclosed.
The audit office adds that according to the Internal Audit Report, failure to effectively collect rents due on investment properties held by the SSHFC was attributed to SSHFC not actively pursuing the tenants, and cited that tenants who were occupying the NTC complex were last officially communicated to in January 2015.
The report further indicated that non-payment and low interest rates affected the growth of members’ funds which is affected by contributions less benefits and Interest paid to members.
Based on the foregoing, the audit office concluded that SSHFC has not effectively protected the welfare of its members for the period under audit.
“This conclusion is based on the rate of interest that members received on their savings with SSHFC. Compared to similar social security funds in Africa, the Corporation has not satisfactorily performed. This means that contributors were effectively receiving only their contributions made into the fund,” NAO reports.
“We recommend that SSHFC establish a structure that ensures that investment policies, undertakings, and performance are regularly reviewed,” the audit office recommended.
According to the audit office, the structure should ensure that investment portfolios are well diversified, and the performance of the portfolios is effectively monitored and reported so that the Board has timely information for corrective action.
The SSHFC Management in its response noted the recommendation and further commented that as per the 2019 internal audit report, medical and health rent owed amounted to D4.1 million Dalasi out of the D12.1 contained therein. It added that the Auditors reported that the Corporation has not effectively protected the welfare of members for the period under audit.
“However, we need to put this into context because we were affected by the impact of the various Executive Directives amounting to over GMD2.0 billion in principal, the recovery of which is still a challenge; not including the lost interest which could have amounted to over GMD315 million,” SSHFC Management said.
