Source: NSSA writes off US$88m | The Herald August 5, 2019
Farirai Machivenyika Senior Reporter
The National Social Security Authority (NSSA) was prejudiced of US$88 million due to poor investment appraisal, inflated costs, mismanagement and inefficiencies, the forensic audit report released last week has revealed.
The report was tabled in Parliament by Public Service, Labour and Social Welfare Minister Dr Sekai Nzenza on Thursday.
According to the report, the authority acknowledged in its 2016 annual report that it had erred in constructing Beitbridge Hotel without requisite management skills resulting in it spending US$49 million instead of the US$3 million which was budgeted for.
“The report highlighted the following key issues and weaknesses on the project; the proposal from Rainbow Towers Group (RTG) did not have a bill of quantities and basis of the estimated costs; there was no evidence of NSSA performing an investment appraisal for the project, no action was taken on abnormal variance between tender amount and actual cost, abnormal consultation fees which were not budgeted for were not queried,” reads part of the report.
Run by RTG, the hotel was closed in 2016 after two-and-a-half years of operations after the hospitality group made approximately US$2 million in losses.
The auditors also noted that NSSA management had not learnt anything from the weaknesses cited in the Beitbridge Hotel debacle.
“Almost all the off-take housing projects in progress have similar weaknesses and challenges. These are likely to result in financial losses if corrective action is not taken.
“Due to some of these weaknesses, the authority ended up writing off US$88 million of investment properties through fair value adjustment during the period investigated.
“Based on our review, other NSSA forensic and internal audit reports, we noted that of the US$88 million, US$78 968 365 was established to be a result of mismanagement, inefficiencies, absence of investment appraisal and inflated costs,” reads the report.
NSSA lost US$42 611 852 on Beitbridge RTG Hotel, US$23 072 231 on Metbank debt swap properties, US$11 806 385 on Celestial Park, US$889 897 on Gateway Investments properties, US$464 000 on Ballantyne Park property and US$124 000 on Nyanga Chalets.
The audit also questioned the integrity of the NSSA database after noting a number of anomalies.
It noted that 371 000 records did not have contact phone numbers which are necessary for communication purposes, 989 000 records did not have contributors’ monthly salaries which are used to calculate pensions with most of them having 723 822 as a default telephone number.
Apart from that 880 000 records had no employee numbers which is a prerequisite when applying for and claiming a pension while 79 000 did not have national identity numbers.
More than 4 00 records had a total service period of 75 years yet NSSA has only been in existence since 1994 making 25 years the period equivalent to commencement of NSSA contributions.
At least 35 000 records did not have social security numbers.