By: Kebba AF Touray
Omar P. Sabally, Senior Audit Manager at the Performance Unit of the National Audit Office (NAO), has disclosed to members of the Public Enterprise Committee (PEC) of the National Assembly, that Social Security and Housing Finance Cooperation (SSHFC), paid D84.4 million as interest to contributors of the National Providence Fund Scheme (NPF).
Audit Manager Sabally made this disclosure on Monday 27th February 2023, at the National Assembly during the presentation of the performance report of the said institution.
“For the period 2018-20, SSHFC has only paid interest to members in 2020. The interest paid to members in the year 2020 was GMD84.8 million, representing 2.09% interest in members’ accounts,” he disclosed. He explained that the Corporation has not paid interest to members for the years 2018 and 2019, but said from the year 2013 to 2015, SSHFC paid interest in the range 0.19% – 0.5%; that from the year 2016 to 2019, SSHFC did not pay interest to members’ accounts. That between 2014 and 2019, SSHFC paid zero interest, and that from 2020, the Corporation started paying interest at the rate of 2%.
“The fall in the level of interest paid to members is attributed to the performance of the investment portfolios of the Corporation,” he said; That the Social Security Committee should have the function to consider and review investment policies and decision, but said according to the Internal Audit Report of SSHFC titled “benefits process audit for the period July – December 2019” the Board’s Investment Committee was not active to 31st December 2019.
“This has impacted negatively on the ability of SSHFC to effectively undertake investment that maximize returns for NPF members. As a result, according to the Internal Audit Report on Investment dated 23rd October 2019, investment decisions were normally given to select committees on an ad hoc basis,” Sabally said.
He however said that the Internal Audit Report on Investment has indicated that the Department of Finance and Investment has not maintained proper documentation and review of the annual tenancy agreement for one of the investment properties which is the NTC complex, since January 2015. This he said has resulted in GMD12.1 million arrears owed to SSHFC by the tenants of this property. That for the year 2019, this amount represented 8.9% of the total income that the Corporation reported, and it is 137.5% of rental income from investment properties that the Corporation held,” Audit Manager Sabally said. He reported that member’s fund for NPF has grown from GMD3.8 billion to GMD3.9 billion (3%) in 2019 and GMD4.2 billion (8%) in 2020; That growth in 2021 is wholly due to contributions net benefits because interest rates were not yet declared as at the time of their audit.
In view of the foregoing, Sabally said that the audit concluded that SSHFC has not effectively protected the welfare of its contributing members for the period under audit, and said this conclusion is based on the rate of interest that members received on their savings with the Corporation. “Compared to similar social security funds in Africa, the Corporation has not satisfactorily performed. This means that contributors were effectively receiving only their contributions into the fund. SSHFC establish a structure that ensures that investment policies, undertakings and performance are regularly reviewed. This structure should ensure that investment portfolios are well diversified and the performance of the portfolios are effectively monitored and reported so that the Board has timely information for corrective action at the right time,” Sabally said.
Foroyaa will bring the response of the management of SSHFC in subsequent editions on the above audit queries made by NAO.