The National Social Security and Welfare Corporation (NASSCORP) is being operated outside the scope of its investment mandate and now stands the apparent risk of not paying citizens who have been saving with the entity for good life after retirement.
This is the opinion of the General Auditing Commission (GAC).
GAC in its September 2018 audit of NASSCORP’s financial statements ended June 30, 2014, 2015 and 2016 said the corporation’s officials provided over US$5million in loans to dormant and financially impotent institutions disregarding established policy, law, and acceptable standards.
In one case of unwise placement of public money, the auditors reported that NASSCORP in a Ponzi style used workers’ across the country money as collateral for a certain Premier Developer JV Limited to secure loan from the Guarantee Trust Bank.
Premier Developer defaulted on the loan and NASSCORP’s assumed responsibility of the failed loan, paid GT and granted another loan to the same company.
“On May 15, 2013, NASSCORP paid off Premier Developer JV Limited’s loan with GT bank and took on the loan of Premier Developer JV,” Auditor General Yusador Gaye said.
“In addition to paying off GT Bank’s loan, NASSCORP increased the outstanding to Premier JV by US$374,671 to being the total amount to US$1,250,000 (one million two hundred and fifty United States dollar).
“Also, consultancy fees of US$8,760 for the monitoring of construction activities in the premier estate housing project were added to the loan.”
According to the audit, total loan outstanding to Premier Developer is now at US$2,258,670 (two million two hundred and fifty-eight thousand six hundred and seventy United States dollar.) A cent has not been paid through November 2016 was expiry date after it was disbursed July 2012.
Morris American Rubber Company is another firm that NASSCORP granted US$650,000 in loan. The corporation’s sole rational for providing the loan is because the International Finance Corporation gave the rubber company US$2million loan in 1970. Morris American Rubber Company is inactive and has defaulted on payment terms since August 2014, the audit said.
“ The company has been dormant over the years and there has been no indicators of rehabilitation. This provides clear indication of impairment on loans,” the Auditor General said.
NASSCORP’s management conceded to the issues raised and said loans are not the corporation’s main assets. They promised loan security/collateral will be perfected in the future.
The Auditor General responded “NASSCORP is a custodian of citizens’ contributions and these citizens expect return on contributions to be able to cover them on retirement or in the event of disability. At any point in time contributions are repayable on demand in the event of extremities.”
– Writes Festus Poquie