The Auditor-General has proposed that officials of the Social Security and National Insurance Trust (SSNIT) who are responsible for the loss of $11.79 million be brought to book and sentenced suitably.
These losses, according to the Auditor-General, could have been averted if stringent procedural requirements had been followed.
The loss resulted from three of the trust’s investments liquidation, resulting in a total cash outlay of $14.768 million.
The irregularity is one of several breaches at SSNIT that the Auditor-General discovered in his 2020 report on Ghana’s Public Accounts — public boards, corporations, and other statutory organizations.
“We noted from our review of investment files, that the Trust liquidated 3 companies with a total investment of $14,768,153. The Trust had not received any returns from 2 of the companies for its investment for the past 15 years. The loss from the liquidations amounted to $11.79 million”
Audit Report
SSNIT is allowed to invest its members’ pensions and earn enough profits to pay what each member is owed when they retire from active duty. They are permitted to find viable investment schemes to invest the monthly contribution from members. However, given the abnormalities discovered by the Auditor-General, it could undermine this ability by SSNIT.
In the case of the $11.47 million loss, the Auditor General has ordered management to look into the investment’s underperformance and to ensure that they manage the monies profitably to ensure the Trust’s sustainability.
The Auditor-General equally recommended the Trust to equip its finance and investment departments with the tools they need to perform series of studies on investment opportunities before committing monies to them.
Feasibility studies
“We urge management to investigate the non-performance of the investments with the aim of ensuring value for money and ensure that effective feasibility studies are carried out before investing. Management should also ensure that officers whose actions have led to the loss are appropriately sanctioned for the loss. We further urge Management to ensure that effective feasibility studies are carried out before investing.”
Audit report
SSNIT was also found to have failed to recover a loan sum of Ghc 146.9 million from the Ghana Road Fund.
This was partially related to the Trust’s failure to put in place rigorous measures to make sure that the Ghana Road Fund issue a letter of authority to the Ghana Commercial Bank and Bank of Ghana to pledge and place a lien on the Road Fund account in order to recover the monthly installments, as required by paragraph 11 of the Loan Agreement.
SSNIT was also unable to provide supporting papers for a debt of Gh¢140.1 million reported in the 2019 trial balance as the government of Ghana subsidized part of the Student Loans. The loan is designated for brilliant but needy students across the country.
Bridal Trust was considered to be another questionable investment by the Auditor-General. SSNIT’s management was forced to suggest to the Board that losses of Gh¢26.8 million be written off as a result of Bridal Trust’s legal liquidation, which could only pay Gh¢5.4 million out of a total loan of $32.3 million.
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