Eight issues in dirt at NSSF

Members of a select Parliament committee investigating allegations of corruption and mismanagement at the workers’ Fund have retreated to an undisclosed location to evaluate evidence gathered, and deliberate on submissions by dozens of witnesses during a two-week public hearing that opened on January 31.

READ: Road to Kapeeka and origin of the crisis at NSSF 

Presentations before the committee chaired by MP Mwine Mpaka (NRM, Mbarara City South) combined the serious, the comical, the introspective and the apologetic. Tempers rose and fell according to the line of questioning, which in some instances left witnesses muted, bewildered and, or second-guessing their responses. Others retracted submissions when caught by the committee for telling lies under oath. 

Parliament Speaker Anita Among ordered the investigations following a petition by a one Richard Job Matua, who identified himself as a member of the pension fund. It unearthed startling revelations about governance of the National Social Security Fund (NSSF), power fights and political influence peddling at the entity as well as questionable handling of cash at the financial elephant in town. 

There were open disagreements and tempered exchanges between witnesses, denials and admissions, finger-pointing and pleas particularly by the Fund’s top brass for a quick wrap of the inquiries. Reason? Proclamations at the public hearing, whether factual or false, were damaging NSSF brand, corporation secretary Agnes Isharaza said.  

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The committee’s terms of reference were four-fold:  Scrutinise corporate governance structures at NSSF, investigate circumstances surrounding the stalled reappointment of Mr Richard Byarugaba as the Fund’s managing director, evaluate the status and safety of savers’ money, and examine the extent of stakeholder engagement in decision-making and inquire into related matters.

The public hearings over a fortnight were conducted at different committee rooms at Parliament Building in Kampala, and the members were given 30 days to complete the task and submit their report containing findings and recommendations, which lapses by the end of this month. 

Here are top eight issues on which the MPs should return an opinion based on the outcome of the public hearing, which coincided with a separate probe by the Inspectorate of Government – both of which precede a planned forensic audit for which an international audit firm is being lined.

1. Stalled reappointment of Richard Byarugaba as NSSF managing director 
The Board of the workers’ Fund had recommended that then managing director Richard Byarugaba and his Deputy Patrick Ayota be each reappointed for an additional five years. Both individuals are above 60 years, which under Uganda’s law, places them in the retiree fold.

KEEP READING: NSSF board: We did not approve Shs6 billion pay

As the appointing authority, Gender and Labour Minister Betty Amongi named Mr Ayota substantive NSSF deputy managing director, and designated him to act as managing director. The minister withheld her signature on Mr Byarugaba’s job offer, saying allegations of financial impropriety levelled against him by whistleblowers should first be investigated.  Mr Byarugaba, without divulging details, told Parliament’s select committee that he could not have his job back because he “disagreed” with minister Amongi. 

2. Financial claims
The main petitioner Richard Job Matua told the committee that money of savers like himself was being inappropriately used under Mr Byarugaba’s tenure. He cited over Shs3b used to procure NSSF smart cards and machines conceived for members to check their savings, which the Fund already shares the balances monthly through direct short text messages to individual member’s mobile phone handset.

The ex-MD and incumbent Fund bosses admitted that they made a “mistake” and the project was “bad”. 
It was further exposed that Dr Sam Lyomoki, the Central Organisation of Free Trade Unions (Coftu) secretary general, is accused of receiving Shs100 million from NSSF and not accounting for the money.

3. Questionable loans
The committee heard that NSSF in 2010 offered a loss-making Uganda clay, in which it already had significant shareholding, an unsecured Shs11b loan. Not a single coin has been repaid and the amount, with interest, has now accumulated to Shs20b. NSSF also loaned Housing Finance Bank Shs29b and records submitted to the committee places the outstanding amount at Shs9b, although MPs were not provided payment records for the Shs20b.

ALSO READ: I cried following NSSF allegations, says Byarugaba 

The select committee did not summon officials of Uganda Clay and Housing Finance Bank to shed light on the transactions. Mr Martin Nsubuga, the chief executive officer of Uganda Retirement Benefits Regulatory Authority (URBRA), the pension sector regulator, told the committee that “it was irregular for the Fund to give [out] a loan [to Uganda Clays].”

4. Budget blues
The Fund’s budget for 2022/2023 Financial Year came under tighter scrutiny over suspicious allocation. The red flag was raised over Shs6b allegedly demanded by Gender and Labour Minister Betty Amongi, who co-supervises NSSF with Finance Minister Matia Kasaija.

Amid roaring laughter, Mr Kasaija disowned the allocation before the committee, saying he only heard about it from his counterpart Amongi. NSSF Board chairman Peter Kimbowa denied they approved the allocation as Ms Amongi claimed. 

“We have not approved the Shs6b … The board has requested [NSSF] management to come up with a comprehensive workplan and we examine how the various activities are going to be resourced and we also examine the accountability metrics that will be attached to this project. This has not happened,” he submitted.

The committee heard that failure to provide the Shs6b was the cause of the fallout between Minister Amongi and Mr Byarugaba, an allegation the former denied. Mr Byarugaba disclosed that they had allocated Shs1.8b to be shared between minister Amongi, board chairman Kimbowa and his members, and two workers’ organisations (Notu and Coftu) with a framework for accountability.

ALSO READ: Former NSSF boss Byarugaba asks to be reinstated

The intended activity for the money was alternately described as Corporate Social Investment (CSI) and Corporate Social Responsibility (CSR). The committee confiscated the mobile phones of Mr Byarugaba and Mr Stevens Mwanje, the NSSF chief financial officer, and surrendered the handset to police for forensic examination after the duo disagreed on the money entries in the budget.  

5. Money on suspense/dormant accounts
The committee was told that workers’ saving on dormant or suspense accounts, which the Auditor General found had accumulated to Shs140b in the last three years, was being irregularly withdrawn in what was believed to be an elaborate scheme likely involving some NSSF employees. The Fund, through an internal audit, had established irregular access to the account and one case is being prosecuted at the Anti-Corruption Court in Kololo.  

6. Nepotism
 NSSF’s Chief Commercial Officer Geoffrey Sajjabi found himself in a corner of bother after MP Richard Gafabusa (Bwamba County), during the public hearing, confronted him last Friday with information that Mr Sajjabi had multiple close relatives working in the same department he heads.  Mr Sajjabi admitted that his sister, a brother-in-law, niece and a nephew work at NSSF. The lawmaker questioned whether the recruitments were a result of nepotism or coincidence.

“I honestly think that it is extremely unfair to vulgarise a situation of individuals that have gone through the school system in Uganda [and apply] for jobs that are advertised. They shouldn’t apply for jobs in a company where a relative of theirs works? All of them apply through departments other than the one that I lead and eventually if they end up in my department, it is not my business,” Mr Sajjabi shot back.

7. Influence peddling  
Mr Byarugaba accused his former boss, minister Amongi, of using her political position to influence matters at NSSF. He informed the committee that the reason why he does not have a job “is because I defied her orders.”  The minister herself said she had also separately come under extreme pressure from different quarters and secretly recorded some of the conversations where she was ordered to sign off Mr Byarugaba’s reappointment. 

8. Governance at NSSF
The corporate governance at the Fund came under tighter scrutiny following allegations that Coftu secretary general, Dr SamLyomoki, and Ms Peninnah Tukamwesiga, a lawyer and Coftu member, illegally nominated themselves to represent workers on the NSSF board. 

CHARLES OBBO: NSSF is today’s meal. Byarugaba is the first course

The committee heard that NSSF does not have a title for Workers’ House, its headquarters in Kampala. Alcon Construction Company built Workers House but a contractual dispute ended in a protracted legal battle that the Fund finally won at Uganda’s Supreme Court. It remained unclear why the title of the land on which the building sits remained in Alcon’s custody or why the NSSF executives over the years failed to obtain a special title to protect its high-value asset.