Business / Local
NSSA irregularities unearthed
26 May 2012 at 04:10hrs | Views
MORE gross irregularities were unearthed in the operations of the National Social Security Authority (NSSA), including lack of a comprehensive risk assessment, unapproved organisational structure, unsanctioned board fees, unauthorised rollover of investment deals and failure to adhere to good corporate governance. These practices have potentially harmful implications on the operations of the pension fund.
The findings are contained in a report compiled by Comptroller and Auditor-General Mildred Chiri. The report warns NSSA's related-party dealings with institutions such as Africom, FBC Bank and stockbroking firm MMC in the absence of a policy document governing related party dealings risked compromising transparency and accountability.
"There is also risk that a significant volume of finance may be channelled towards entities that are only related to the authority even if the transaction is not profitable," Chiri says in the report.
NSSA has 20% shareholdings in both Africom and FBC, and uses Africom as its telecommunication services and FBC as its banker. Efforts to get comment from the mentioned companies were fruitless.
MMC was involved in the purchase of Star Africa shares, raising the possibility of conflict of interest as one of the managers is related to NSSA investments' settlement supervisor.
Chiri also found that NSSA management had access to 50% of approved loans and in the absence of an appropriate policy, there was a high risk of transferring "undocumented resources and services and even obligations between parties".
She also said NSSA was operating without an approved organisational structure where "positions below executive directors were not formally approved by the board".
"I further observed that staff complement for some departments were not reviewed despite increase in the level of activities while in other departments, the reporting structures were not clear, for instance, the accountants reporting to the finance director instead of finance manager," she says.
Unauthorised transactions, including the payment of board fees, were also made without the approval of Labour and Social Services minister Paurina Mpariwa as stipulated in Section 14 of the NSSA Act.
Management was also found to have acted improperly by disposing of vehicles to themselves without the approval of the board. A report by National Economic Conduct Inspectorate (NECI) has shown that NSSA, which holds sway across the Zimbabwean economy in terms of investments in equities, the money market, and property portfolios, is a haven for corruption.
The report by NECI, which probes white-collar crimes, showed NSSA is rotten to the core due to an extended period of corruption and fraudulent activities. The corruption unearthed by NECI spans a wide range of areas, including tender processes, real estate projects that include housing and hotel projects, structured finance in all sorts of areas, even buying wheat, investing in shares, banking, including the money market, among various sectors of the economy.
NSSA directors and management also splashed money in buying mansions and luxury cars for themselves, while contributors struggle to lead decent lives after retirement.
NSSA management has promised to implement Chiri's recommendations but ignored the NECI report.
The findings are contained in a report compiled by Comptroller and Auditor-General Mildred Chiri. The report warns NSSA's related-party dealings with institutions such as Africom, FBC Bank and stockbroking firm MMC in the absence of a policy document governing related party dealings risked compromising transparency and accountability.
"There is also risk that a significant volume of finance may be channelled towards entities that are only related to the authority even if the transaction is not profitable," Chiri says in the report.
NSSA has 20% shareholdings in both Africom and FBC, and uses Africom as its telecommunication services and FBC as its banker. Efforts to get comment from the mentioned companies were fruitless.
MMC was involved in the purchase of Star Africa shares, raising the possibility of conflict of interest as one of the managers is related to NSSA investments' settlement supervisor.
Chiri also found that NSSA management had access to 50% of approved loans and in the absence of an appropriate policy, there was a high risk of transferring "undocumented resources and services and even obligations between parties".
"I further observed that staff complement for some departments were not reviewed despite increase in the level of activities while in other departments, the reporting structures were not clear, for instance, the accountants reporting to the finance director instead of finance manager," she says.
Unauthorised transactions, including the payment of board fees, were also made without the approval of Labour and Social Services minister Paurina Mpariwa as stipulated in Section 14 of the NSSA Act.
Management was also found to have acted improperly by disposing of vehicles to themselves without the approval of the board. A report by National Economic Conduct Inspectorate (NECI) has shown that NSSA, which holds sway across the Zimbabwean economy in terms of investments in equities, the money market, and property portfolios, is a haven for corruption.
The report by NECI, which probes white-collar crimes, showed NSSA is rotten to the core due to an extended period of corruption and fraudulent activities. The corruption unearthed by NECI spans a wide range of areas, including tender processes, real estate projects that include housing and hotel projects, structured finance in all sorts of areas, even buying wheat, investing in shares, banking, including the money market, among various sectors of the economy.
NSSA directors and management also splashed money in buying mansions and luxury cars for themselves, while contributors struggle to lead decent lives after retirement.
NSSA management has promised to implement Chiri's recommendations but ignored the NECI report.
Source - Ind
