The Director Audit in the Auditor General’s Office, Joseph Kirya has told the select committee investigating allegations of mismanagement at the National Social Security Fund that the fund’s management has failed to address the recurrent query on suspense accounts.
Kirya together with the Auditor General, John Muwanga and other officers appeared before the committee on Friday, 03 February 2023.
In his report, the Auditor General indicated that NSSF reported unallocated members’ contributions of Shs38.2 billion in 2020, Shs45 billion in 2021 and Shs57 billion in 2022.
Kirya blamed this on failure by NSSF to follow up with employers who submit payments without the list of employees.
“When employers pay, they are supposed to send a list of beneficiaries. But what we have observed over the years is that companies would pay without accompanying lists and funds cannot be allocated and it is put in the suspense accounts,” said Kirya.
He said that despite repeated reminders to NSSF to address the challenge, figures on unallocated funds continue to grow.
His submission was prompted by a question from the Committee Chair, Hon. Mwine Mpaka who sought clarification on the steps that the Auditor General has taken to address the complaints on suspense accounts.
“We have received several complaints from savers on suspense accounts and the Auditor General seems not to be aware of the issue,” Mwine Mpaka said.
Hon. Amos Kankunda (NRM Rwampara County) tasked the Auditor General to investigate and find out if NSSF has a system to safeguard funds in the suspense accounts.
Meanwhile, the Assistant Auditor General in charge of audit services, Edward Akol revealed that an audit into the fund’s investment income uncovered avoidable expenditures totaling to Shs300 million and US$ 293,000.
He said that Shs323 million was paid in the Lubowa real estate investment to undertake procurement of contractors and yet the fund has a fully-fledged procurement and disposal unit.
He added that US$ 173,000 and US$ 120,000 was paid to contractors as compensation claims relating to renewal of performance and advance guarantees as a result of delayed issuance of instructions for project commencements.
“This was spent by the fund which in my opinion could have been avoided with better planning. I advised management to recover these amounts and make further checks on the already paid items,” he added.
Hon. Charles Bakkabulindi (NRM, Workers Representative) raised concern over the avoidable and over expenditures saying that it affects interest of the savers.
“We have been hearing from the media and the fund’s management that workers’ money is safe and yet you are talking about over payments and avoidable payments; should we still trust that the money is safe?” Bakkabulindi asked.
On 19 January 2023, the House resolved to institute a committee to inquire into the operations of NSSF following reports of corruption and mismanagement of the Shs17.9 trillion fund.
Parliament of Uganda