NSSF loses Shs2.6 billion in botched smart card deal

The Parliament Select Committee investigating the alleged mismanagement at National Social Security Fund (NSSF) has learnt that the Fund lost Shs2.6 billion in procurement of smart cards and machines to enable savers check their account balances.

Committee chairperson Mwine Mpaka (Mbarara City South MP) asked why management procured a point of sale machine after realising that cards were not useful.

“You fly people to India to verify the card and find out that it only shows the name and account number, after two months, you abandon the project,” he said.

Buwamba County MP, Hon. Richard Gafabusa asked why there was no guarantee clause with the supplier.

“If the card did not meet fitness for test, why was it not returned and money claimed?”

In response, former NSSF Richard Byarugaba said that the project was a bad choice.

The Fund’s Head of procurement, Gerald Mugabi, told the committee on Wednesday, 08 February 2023, that  it was a mistake by management.

“In 2013/2014, the biggest pain for our members was that they couldn’t access information about their savings. We were like operating in a black box. The idea of the NSSF card was, let’s give every member a card that if they want to see their balances they could go to the bank,” he said.

“The NSSF card did what it was supposed to do, except that the technology changed quickly,” he added.

Meanwhile acting NSSF Managing Director Patrick Ayota told the Select Committee investigating allegations of the Fund’s mismanagement that an e-collection portal was started to mitigate growth of suspense accounts. He said unallocated contributions are at Shs52 billion.

He said the Fund has fully integrated with NIRA to enable registration of members, and this has reduced the amount of incoming suspense.

“Once all efforts to clear suspense are exhausted, we will publish all pending suspense and have it moved to the reserves as per NSSF Act,” he said.

The Director Audit in the Auditor General’s Office, Joseph Kirya last week told the select committee that NSSF’s management haD failed to address the recurrent query on suspense accounts.

Kirya together with the Auditor General, John Muwanga, and other officers appeared before the committee on Friday, 03 February 2023.  

In his report, the Auditor General indicated that NSSF reported unallocated members’ contributions of Shs38.2 billion in 2020, Shs45 billion in 2021 and Shs57 billion in 2022.

Kirya blamed this on failure by NSSF to follow up with employers who submit payments without the list of employees.

Ayota on Wednesday also clarified that the controversial Shs6 billion request by Gender Minister Betty Amongi is still pending.

He said that the request was presented to the Board, which directed management to prepare a detailed activities and work plan, and budget to support the objective