The Social Security and National Insurance Trust (SSNIT) and Auditor General (AG) are in disagreement over a US$17.5 million loan that the former guaranteed for the Intercity State Transport Company (STC).
According to the nation’s premier pension provider, while the Auditor General concluded that the Trust which holds an 80 percent share in STC guaranteed the loan facility given by the Agricultural Development Bank (ADB), SSNIT denied the claim, stating that it did not approve any of such loan.
The latest claim by SSNIT contradicts that of the Auditor General’s report which said “SSNIT guaranteed STC to take a loan of US$17,500,000 from ADB Bank to procure 100 buses to augment their fleet”.
Meanwhile, the revelation came to light when officials of the SSNIT appeared before the Public Accounts Committee of Parliament to respond to audit queries contained in the Auditor General’s report on Public Boards and Corporations for the year ending December 31, 2020.
“We haven’t guaranteed any loan for STC. That is an error,” Deputy Director General of the Trust, Kofi Osafo Mafo, told the committee. Asked if he is challenging the report, Mr. Mafo said “Yes. I’m challenging that aspect of the report”.
Mr. Mafo’s position was affirmed by the Director General, Dr John Ofori-Tenkorang, who said “we have not signed any guarantee to guarantee the facility that was taken by STC from ADB”.
“In fact, when that facility was being entered into, STC came to SSNIT to give a [guarantee] and we declined because there were outstanding loans that had not been paid so they got the ministry to help them get the loan. What we did was to give a no objection.”
Dr. Ofori-Tenkorang further challenged saying “As we speak, there is no guarantee note that SSNIT has signed to guarantee that loan. The auditors can produce that document if such exists”.
Auditors At Loss
In defense of their findings, the auditors were at a loss that during the auditing process, SSNIT did not challenge their findings only to do so at the public hearing.
“Our procedure of auditing is that after an observation is raised, it is given to the auditee to respond, and based on those responses before the report, a management letter is issued and you have 30 days to answer. All these processes went on without them disputing it. I’m surprised they are here now disputing it,” a representative of the Auditor General said.
The auditors, moreover, told the committee they would produce supporting documents to substantiate their claim that SSNIT indeed guaranteed the facility.
Dr Ofori-Tenkorang added that under his watch the Trust has been diligent in its operations and did not guarantee facilities to entities that were already distressed financially.
“The decisions we take under my tenure are guided by the long-term interest of the pensioner and that is why when STC came to us, we flatly declined it at the SSNIT Board level,” Dr Ofori-Tenkorang stated.
In a related development, the Trust said it was in discussions with the STC’s Board and Management on how they would retire a GH¢49.5 million it had earlier contracted.
“SSNIT continues to engage STC management with respect to the repayment of the loan and asked the company to submit a repayment plan. The company is yet to submit its plan for the Trust’s consideration and for further action given the lack of visibility in the current market conditions.”
Dr Ofori-Tenkorang
STC management, however, noted that they will address the payment issue after they meet their commitments to the Government for the supply of buses to them. “The current COVID-19 pandemic has made it impossible to meet both commitments. Discussions with the Managing Director are ongoing to have the company submit and commit to a repayment plan.”
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