An audit of the Social Security and Housing Finance Corporation found that board members received D5.398 million in duplicate payments over a 30-month period, prompting significant concerns regarding adherence to corporate governance regulations for state-owned enterprises.
The audit, encompassing the period from January 2022 to June 2024, was submitted to the Public Enterprise Committee of the National Assembly. The conclusion indicated that board members received both monthly allowances and sitting allowances simultaneously—payments that auditors noted lacked clear authorization and violated the Code of Corporate Governance for state-owned enterprises.
The report indicates that monthly and sitting allowances, typically designated for the board chairman and the managing director, were concurrently extended to board members. Interviews conducted with the managing director, the board secretary, and the board chairman confirmed that the payments were made. The officials acknowledged their lack of awareness regarding the violation of governance rules associated with receiving both allowances simultaneously.
The audit indicated that the dual payments led to unwarranted financial outflows, thereby diminishing the funds accessible for the corporation’s operational priorities.
“The report indicated that dual payment to board members represents a breach of the Code of Corporate Governance and has led to unwarranted financial expenditures.”
The auditors recommended that the managing director and the board chairman promptly initiate actions to recover the payments and implement a training program to ensure that board members and senior management are well-versed in the financial and governance regulations applicable to state-owned enterprises.
In its response, management stated that sitting allowances are provided exclusively for extraordinary meetings and are restricted to committee members and invited officers participating in subcommittee sessions. Management stated that this practice “aligns with best corporate governance standards.”
Management informed auditors that a formal board charter will be created to define meeting schedules, the disbursement of allowances, and other operational issues. The charter is anticipated to receive approval from the line ministry and be implemented by July 2025, with oversight designated to the Director of Corporate Affairs and the Director of Human Resources and Administration.
The audit recognized that certain aspects of the payment structure may be indicative of previous practices; however, it emphasized that the duplicate disbursements—totaling approximately D5.4 million—constitute a significant governance violation. Auditors recommended prompt corrective measures to ensure the corporation adheres to the 2022 Code of Good Corporate Governance for state-owned enterprises.
The report indicated that in a meeting held on March 3, 2025, with the audit team, the National Audit Office, and the corporation’s management, officials reached a consensus to eliminate sitting, emergency, and other allowances for board members, while preserving monthly allowances. Auditors indicated that by the time the report was finalized, the recovery of the duplicate payments had not yet been completed.
