The National Social Security Fund’s Board of Directors and senior management have rejected calls for resignation, characterizing a parliamentary investigation report into the fund’s management as an advising document.
According to the NSSF Board Chairperson, Peter Kimbowa, the study was “devoid of context” and, as a result, misrepresented a number of facts regarding its operations and investments. Until the appointing body makes a judgment, they will not take action on the report.
“We accept constructive criticism that aims to improve rather than demolish. The Interim Managing Director, Patrick Ayota, joined Kimbowa in saying, “We are waiting to hear from the Executive.
The report recommended reorganizing the entire board and imposing sanctions on senior managers, including former MD Patrick Byarugaba, Ayota, Barbara Arimi, the head of corporate affairs, and Stevens Mwanje, the chief financial officer.
The allocation of Shillings 1.8 billion between board members, the Minister of Women, Labour, and Social Development, Betty Amongi, and representatives of workers’ organizations was one issue that came up during the select committee’s investigations.
The report, which was last week endorsed by parliament, demanded that Mwanje be fired for not having the necessary credentials and that the implicated officials resign.
Ayota told the reporters on Monday that the study had some great points but also left many questions unanswered. Despite the Committee’s best attempts to gather information from the Fund, it often seems as though not all of it was utilized.
He cited the case of Uganda Clays Limited as an example. A significant shareholder in the maker of clay products, NSSF entered at a time when it was experiencing a long-term declining trend more than ten years ago.
“We weighed the possibility of letting the company fail against the danger of providing UGX 11 billion in additional funding to ensure its survival and return to profitability. The loan was approved by the NSSF Board and the previous Minister of Finance, Planning, and Economic Development after the Fund decided on the latter, he added.
The loan was approved prior to the passage of the Uganda Retirement Benefits Regulatory Authority (URBRA) Act, which established the restriction, according to Ayota, despite the fact that the law prohibits NSSF from making direct loans. According to him, the business had subsequently earned a profit and was prepared to begin repaying the debt.
The MPs’ judgments that the employer’s geo-mapping exercise was unsuccessful were also disputed by the management, despite the fact that it was finished and is already operational. Ayota questions why they did not take into account the data sent to them by NSSF.
Many instances fit under this category, according to Ayota, including the case of staff reorganization, the payment of performance bonuses, corporate social responsibility, and legacy investments like the West Nile Golf Club and the Workers House property title.
He also criticized the MPs for not comprehending the parastatal’s financial management procedures and the distinction between budgeting and expenditure.
The committee failed to take into account the environment in which we work and assumed that we functioned like a government ministry.
Budgeting does not necessarily mean spending, contrary to what the Committee believed. The user department must offer rationale for the procurement process to start or demonstrate value for money to the Accounting Officer and others before any funds are committed.
It’s not necessary to spend the money just because it’s in the budget.
Ayota said that in some cases, the committee failed to take into account certain clauses in the legislation governing the NSSF, such as the Managing Director’s discretionary authority to waive penalties.
“The Fund is not intended to harm or destroy enterprises. The Managing Director may exercise his discretion to waive the penalties where an employer proves and promises through a legally enforceable agreement that they will pay arrears along with interest earned.
Ayota claims that the 40 billion shillings indicated as a donation to the Ugandan Grain Council is the other error in the report.
“There has never anything like a UGX 40 billion loan to the grain council. Well, we’d like to get into funding for agricultural. It’s vital to increase production and market access, but we haven’t given the Grain Council any loans yet, he said.
The Board Chairman expressed his satisfaction that no one was accused of stealing money in the report, contrary to what had been reported in the media.
Despite the numerous allegations in the media alleging bribery and improper management of Funds, Kimbowa stated, “From the report, there is neither evidence nor a determination that any individual at the Fund had misappropriated member cash.
The committee report, which said that “the legendary 6Bn was never disbursed, nor was the 1.8Bn split among board members,” furthered his claim that the board had been vindicated. He described this as confirmation that the Fund can be trusted with the savings of its members.
Kimbowa, however, criticized the MPs for failing to explain “how this growth happened, how it can be sustained, and how we can ensure that the Fund continues to grow to the benefit of the savers” despite the fact that the report acknowledged the Fund had increased from 1.7 trillion in 2010 to 1.75 trillion.
According to the report’s findings about the investments’ success, the Arua-based West Nile Golf Club venture spent 2.3 billion shillings but never got off the ground.
According to Kimbowa, this cannot be used to evaluate the performance of the 210 investments in the entire investment portfolio.
“Just one of these, the investment property in Arua, has lost value. According to us, it’s not necessarily a poor performance that the Committee had to look back nearly 20 years to discover one investment that had lost value.
According to Kimbowa, they will wait to see what the President does about the findings. “The report from the parliamentary committee was advisory. Until the president takes action, we’ll stay put.
