The Standard Group Plc is a multi-media organization with investments in media platforms spanning newspaper print operations, television, radio broadcasting, digital and online services. The Standard Group is recognized as a leading multi-media house in Kenya with a key influence in matters of national and international interest.

Standard Group Plc HQ Office,
The Standard Group Center,Mombasa Road.
P.O Box 30080-00100,Nairobi, Kenya.
Telephone number: 0203222111, 0719012111
Email: [email protected]

NEWS & CURRENT AFFAIRS

The Nairobian

Auditor reveals NSSF agents collect but fail to remit millions

Business

By Macharia Kamau | May 14, 2022

Property agents managing the National Social Security Fund (NSSF) prime properties collected millions of shillings in rent but failed to remit to the fund, the Auditor General has revealed.

In auditing NSSF’s accounts for the financial year ending June 2020, the Auditor General raised concerns over the fund’s failure to put in place proper controls on rent paid by tenants in some of its prime properties.

“The financial statements highlights contingent rental income totalling Sh30.68 million collected by various property agents from the fund’s tenants in Nairobi at Bruce House, Hazina Trade Centre, View Park Towers and Nyayo Estate. However, the collections had not been remitted to the fund as at June 30, 2020,” said the Auditor General.

Keep Reading

“Although management demonstrated new internal controls intended to prevent agents from withholding receipts collected from the fund’s tenants, there was no clarity on how the withheld rental income totalling Sh30.68 million would be recovered.”

The revelations come amid reduced contributions by Kenyans saving for old age with the NSSF due to the ravages of the coronavirus pandemic.

The State-run pension scheme said contributions from members stood at Sh14.7 billion in the financial year to June 2020, down from Sh15.1 billion over a similar period in 2019. The money paid to retirees also dropped 10.3 per cent to Sh4.43 billion in June 2020, from Sh4.94 billion in 2021, according to financial statements that NSSF published in the Kenya Gazette yesterday.

NSSF attributed the poor performance to revenue shortfall due to Covid-19 pandemic that broke out in early 2020 and affected its performance for the second half of its financial year that ends in June.

However, NSSF’s income from investments such as dividends from its shareholding in listed companies, interest from government and corporate bonds as well as rental income from property grew to Sh20.39 billion in 2020 from Sh18.23 billion a year earlier.

“The growth is attributed to the good returns on fixed income at the Nairobi Securities Exchange,” the fund said. Over the year, the fund’s assets grew 6.2 per cent to Sh249.65 billion up from Sh235 billion in 2019. The Auditor General also raised concerns over the money paid by Kenyans as savings for their old age but not credited to their accounts.

“Examination of records on contributions made by members indicated that contributions in transit not posted to members’ accounts as at June 30, 2020 amount to Sh439 million, denoting an increase of Sh149 million or 51 per cent from Sh290 million reported as at June 30, 2019,” said the audit report. “No plausible explanation was provided by management for the large increase in the balance and the reasons for delay in posting the contributions to the credit of the respective members’ accounts.”

The audit report also probed how numerous NSSF employees have been on acting capacity for years and despite raising concerns in past audit reports, management and board of trustees had not moved to hire them. This has been a recurring issue captured in previous audits.

“As similarly reported in the previous year, the senior management team in the year under review included 17 senior members of staff appointed on an acting capacity for long periods, some for as many as six years.

“Delay in advertising the respective posts or confirming the acting managers may have constrained their capacity to provide effective leadership of the fund,” said the Auditor General.

Over the year under review, NSSF courted more controversy regarding Hazina Trade Centre.

The auditor general noted that NSSF paid Sh653 million to the Chinese contractor Jiangxi, which was claiming Sh871.69 million for having its equipment on site despite stoppage of construction works.