The Select Committee that investigated the alleged mismanagement of the National Social Security Fund (NSSF) has recommended that the Minister of Gender, Labour and Social Development, Hon. Betty Amongi, should resign with immediate effect.
This was contained in the committee report presented by the Chairperson, Hon. Mwine Mpaka in a House chaired by Speaker, Anita Among on Wednesday, 01 March 2022.
The committee recommends that Amongi resigns in the public interest on account of abuse of office, following her Shs6 billion request from the fund for alleged expansion of the fund.
“The actions of the Minister in directing Shs6 billion to be availed to her ministry, being a supervisor of NSSF without any law empowering her to do so and knowing that ministry activities are financed through appropriation, did an act which is prejudicial to savers funds and the just administration of NSSF,” Mwine Mpaka said.
The report added that President Museveni should take a keen interest in the conduct of the minister.
The committee also recommended that the NSSF should also be dissolved.
“The committee notes that the Board has failed on several occasions as seen in the report to ensure that there is the secure, profitable and effective financial management of the fund for the benefit of the workers as stipulated in section 4 of the NSSF Act,” the report reads in part.
According to the committee’s findings, 24 board members have been illegally receiving 10 per cent contributions from NSSF.
“There exists no employee-employer relationship between the board members and NSSF to warrant such contributions. The committee further notes that such contributions are not provided as a benefit a member of the board is entitled to, under the Board Charter,” the report read in part.
The committee also recommended that the Board members who received the contributions should refund the money within seven working days after the adoption of the report or face prosecution.
The committee was further concerned that the Board approved an expenditure of Shs33.3 billion in employee bonuses in 2020/2021 and 2021/2022 at a time when the fund recorded a decline of three per cent in dividends.
“The bonuses paid by the Board, without declaring the set targets for the financial year or third party verification that the fund has met the target all amount to an abuse of the funds available to savers,” Mwine Mpaka added.
The former Managing Director, Richard Byarugaba and the acting Managing Director, Patrick Ayota as well as the fund’s management team have been asked to step aside to pave way for investigations by the Inspectorate of Government (IGG) for the offences of abuse of office, corruption and conspiracy to commit a felony with a view of immediate prosecution.
This is in relation to the expenditure of Shs1.8 billion by Board members and workers’ unions under the guise of Corporate Social Responsibility.
The committee said that the justification from the NSSF management of succumbing to pressure to commit illegality is no defence to criminal liability.
A lifestyle audit by the IGG on all the employees in the compliance department has also been recommended because of inconsistencies in their internal audit of companies that have been defaulting and the total contributions to NSSF compared to pay as you earn and Uganda Revenue Authority.
The committee also recommended halting of developments in Lubowa Housing Estate and expeditious formalisation of the true owner of the land.
Mwine Mpaka said that the committee noted various ownership of the Lubowa land that NSSF purchased.
”In a letter by the former MD, Byarugaba, to the then ISO Director General, Col Kaka Bagyenda, he acknowledged NSSF having unauthenticated titles from Mitchell Cotts Uganda Limited and they were waiting for the true owner to compensate him,” Mwine Mpaka added.
The committee recommended the construction of affordable accommodation for savers to purchase and pay partly from their savings, as opposed to the Lubowa houses which cost between Shs800 million and Shs3 billion.
“They are not only too expensive but could also cause loss to the fund in circumstances where they are not occupied as is the case now, where out of 300 units, only three properties have been partly paid for,” the report read in part.
On 19 January 2023, the House resolved to institute a committee to inquire into the operations of NSSF following reports of corruption and mismanagement of the Shs17.9 trillion fund. MPs are expected to debate the committee’s report on Thursday, 02 March 2023.
