More than US$17 million unaccounted for at NSSA due to weak loan procedures
Millions of dollars in public funds have gone unaccounted for at the National Social Security Authority (NSSA), a recent audit report has revealed, exposing shocking financial mismanagement and procurement irregularities at the state-run pension fund.
The latest audit report, which covers the years 2021 and 2022, highlights several areas of concern, including the reconciliation of funds managed by external asset managers, loans and consultancy services.
The audit report reveals that the NSSA engaged asset managers to administer and manage its investment portfolio, but the contracts did not provide for deliverables or performance obligations.
As a result, the Authority could not account for the funds and the proceeds of the investment. Additionally, the report notes that the invested funds were not recognised in the financial statements as at December 31, 2022.
Furthermore, the report highlights that the NSSA’s procedures on awarding loans were weak, with no terms and conditions in place.
This resulted in shareholders’ loans and other advances amounting to ZWL$12 billion (US$17 883 756 according to the Interbank rate as of December 2022) being initiated and paid off without contracts.
“The Authority’s procedures on awarding loans were weak as there were no terms and conditions. to the loans. As a result, shareholders’ loans and other advances amounting to ZWL$12 billion were initiated and paid off without contracts.
“For example, Woodlands Farm (Private) Limited, and Middle White Pride loans which were issued without contracts and terms of repayment,” the auditor noted.
The report also notes that the NSSA did not apply the provisions of the Public Procurement and Disposal of Public Assets Act when engaging investment funds during the period 2021 and 2022.
This resulted in no expression of interest being sought through published notices, and no declaration of interests by members of the evaluation committee.
The Auditor-General, Rheah Kujinga, has expressed concern over the misappropriation of funds and the misstatement of financial statements.
The report recommends that the NSSA review and monitor its procedures for compliance and ensure that contracts/agreements are signed before disbursements are made.
In response to the report, the NSSA management acknowledged the weaknesses in its financial management and procurement procedures. Management has since perfected some agreements and has committed to ensuring that agreements are in place before disbursements are made in the future.
The management also said it had sought legal opinion on the procurement of asset managers and has been advised to follow the Public Procurement and Disposal of Public Assets Act when appointing service providers in the future.
