The Social Security and National Insurance Trust (SSNIT) has reacted to some issues raised by the Auditor-General in its latest report that borders on the operations of the Trust.
In a release sighted by Peacefmonline.com, the management of SSNIT responded to three specific matters of concern raised by the A-G, that is;
1. Payment in excess of work performed
2. Arrears of Contribution from GoG employees not fully settled (Auditor General’s Report, 2021, paragraph 2521)
On the issue of "Payment in excess of work performed" captured in the Auditor General’s Report, 2021, paragraph 2558, the Trust was emphatic that it "did not make any payment to the RSS’s contractor (Regimanuel) for the project. All the funds from SSNIT were disbursed to RSS, as per the terms of the loan agreements."
"RSS has not been able to honour its loan repayment obligations. SSNIT is therefore pursuing all payments due from RSS.
To this end, SSNIT has recently completed a swap of part of the debt owed it for all the completed housing units of RSS and has tasked the Board and Management of RSS to aggressively pursue the recovery of any funds that has not been used by Regimanuel for the purposes for which they were disbursed," portions of the statement reads.
Read the full statement below:
The Social Security and National Insurance Trust (SSNIT) says it has taken note of media publications on the 2021 Auditor- General’s report pertaining to the Trust and wishes to respond as follows:
1. Audit Issue: Payment in excess of work performed
We noted from review of RSS file that SSNIT as a majority shareholder of RSS Ltd paid US$36,890,553.79 through RSS to Regimanuel Gray Ltd. (contractor for the RSS projects) in 2015 for construction of the RSS flats. However, Regimanuel failed to undertake construction works to the tune of the amount paid. (Auditor General’s Report, 2021, paragraph 2558)
Management Response
This is a legacy issue dating back to 2011. In 2009, RSS Developers Ltd.(RSS) was set up by SSNIT and Regimanuel Gray Ltd.(Regimanuel) to develop houses for sale, with Regimanuel as the development partner (the contractor). RSS entered into loan agreements with SSNIT to fund its developments. SSNIT disbursed the funds to RSS according to the terms of the loan agreements in the years 2011, 2013, 2014 and 2015. RSS made payments to the contractor, Regimanuel, for the development of the houses. SSNIT did not make any payment to the RSS’s contractor (Regimanuel) for the project. All the funds from SSNIT were disbursed to RSS, as per the terms of the loan agreements. RSS has not been able to honour its loan repayment obligations. SSNIT is therefore pursuing all payments due from RSS.
To this end, SSNIT has recently completed a swap of part of the debt owed it for all the completed housing units of RSS and has tasked the Board and Management of RSS to aggressively pursue the recovery of any funds that has not been used by Regimanuel for the purposes for which they were disbursed.
2. Audit Issue: Arrears of Contribution from GoG employees not fully settled
The Controller and Accountant General Department (CAGD) as at 31 December 2020, owed the Trust GH¢1,124,568,970.17 in respect of contribution receivable from Government of Ghana (GOG) employees. Also, per Section 64(1) of the National Pensions Act, 2008 (Act 766) and based on our previous recommendation, the Trust has imposed a penalty of 3% on delay payments by CAGD over the years to the tune of GH¢3,209,818,256.22 bringing the total indebtedness of CAGD to GH¢4,334,387,226.39. (Auditor General’s Report, 2021, paragraph 2521)
Management Response
Government has made some efforts to settle the indebtedness. In 2020, two (2) Bonds totalling GH¢1.00 billion were received as part payment of the indebtedness. The Trust is engaging the Ministry of Finance to ensure that the outstanding debt is paid.
3. Audit Issue: Unlisted Equities without Dividends payments
Inability of 10 companies to pay dividends or grow their value, thereby, denying the Trust the expected income to pay pension benefits. (Auditor General’s Report 2021, paragraph 2529)
Management Response
SSNIT invested in these companies between 1986 and 2012. Management has been engaged in restructuring some of these companies to ensure that they become profitable and are able to pay dividends. SSNIT is also in the process of exiting some of these unprofitable companies.
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