In the year to June 2017, the fund paid its 11 directors Sh2.45 billion,
with Sh1.15 billion in five sittings by the Human Resources and Legal
committees. FILE PHOTO | NMG
The sunset years of millions of employees is at risk following
investment blunder by the very agency meant to safeguard and grow their
nest eggs.
Flagged by the Auditor-General Edward Ouko
in his annual general reports, the National Social Security Fund (NSSF)
has hit hard ground in projects running into billions of shillings with
legal and other barriers occasioned by bad decisions.
The
auditor, for example, could not understand why NSSF sold land in
November 2011 and only earned a tenth of the sale price without taking
any action to get the rest of the money paid.
The 69.16
acres in Mavoko municipality were sold after it was subdivided into
seven plots of 9.88 acres each to reap from the budding real estate boom
that was fast rising then.
While the sale price was
set at Sh116 million, NSSF could not explain why it had only received a
tenth and seven years later, nothing is happening.
“Only
Sh12.6 million or 10 percent was paid vide Miscellaneous Receipt
M010022315 dated August 23, 2011. The balance of Sh113.4 million which
was to be paid within 90 days from the date of execution of the
agreement has not been settled to date. No reasons were provided for the
failure to terminate the sale agreement upon the expiry of the 90 days’
execution period provided for in the contract agreement,” Mr Ouko
wrote.
NSSF may have made much more money since the land has now
appreciated many times in the seven years. The auditors were also
concerned that should the sale dispute be taken to court, NSSF will
still pay more in legal fees.
AMS Properties Limited,
the real estate firm that bought the land from NSSF, said they were yet
to be shown the exact boundaries on the land as was agreed in the 2011
sale deal.
The plot’s reference number also changed in
two different survey plans with Plots L.R Nos. 20183, 20184 and part of
20181 overlapping with L.R. Nos. 22067, 22092 and other plots, according
to the lawyers representing the real estate developer.
AMS also said there are squatters on the plots, making it had to use them and hence says it has suffered instead.
“As
a consequence of the failure by NSSF to address the above said issues,
our client has not paid the balance of the purchase price and the
properties have not been transferred to its name. Our client was only
required to pay the said balance of the purchase price upon NSSF being
able to pass good titles and vacant possession of the properties to our
client,” the lawyers wrote to Sunday Nation in response to queries why
they had not paid NSSF.
Efforts to get response from
NSSF communications manager Chris Khisa were futile as he failed to
honour his promise to get back since January 3 and ignored subsequent
follow ups.
Several rental incomes that the fund is
expected to earn have also been hanging in limbo, with some agents said
to be collecting and keeping the rents. Unnamed agents had collected
some Sh3.6 million from Hazina, View Park Towers and Nyayo estate and
failed to remit to NSSF.
Efforts to seek legal redress
have been in vain. EACC is said to have picked the matter and assets
belonging to the agents are being pursued.
Some Sh7.2
million was lost through fraud at Westlands branch as another tenant
identified as Kenya College of Medicine gave fake cash deposit slips of
Sh9.3 million. Both cases are in court, all pointing to risks around
retirement savings for the millions of workers who contributed more to
the kitty at Sh13.54 billion, up from the Sh12.8 billion in 2015/16.
Its
Hazina Plaza in Mombasa has had various tenants who have defaulted in
rental obligations. In 2010, another tenant signed to lease the property
for 10 years at Sh27 million per year with a cost of 10 per cent
escalation after every two years. After a 30 months’ grace period, the
tenant has continued to lag in rent payment, with Sh239.5 million
remaining uncollected.
Auditors also faulted NSSF for
installing a CCTV at the Mombasa Social Security’s building at Sh48
million. The CCTV which had no maintenance contract was not functional
and is said to have developed technical faults.
The
fund also over-collected by Sh2.2 million beyond its budget and spent
Sh548.5 million less, resulting into what auditors suspected to have
been an overbudget of about eight per cent to be seen as
well-performing.
In the year to June 2017, the fund
paid its 11 directors Sh2.45 billion, with Sh1.15 billion in five
sittings by the Human Resources and Legal committees. One director
earned Sh550,000.
The board allowances shared among
members of the three committees were Sh1.21 billion more than what the
fund paid beneficiaries at Sh3.66 billion and much less than its staff
costs, which had increased to Sh3.88 billion.
Efforts to reach Cotu secretary-general Francis Atwoli over the perks were also futile.
No comments:
Post a Comment