The National Assembly’s Public Enterprises Committee (PEC) has expressed concern over an outstanding D14.34 million in loans owed by pensioners to the Social Security and Housing Finance Corporation (SSHFC), while also identifying weaknesses in the corporation’s pension management and loan administration systems.
The concerns are contained in the committee’s report on its scrutiny of the audited financial statements, management letters, and activity reports of state-owned enterprises for the financial year ended 31 December 2022.
According to the report, auditors found that loans and advances granted to pensioners under SSHFC’s pensioners’ loan scheme amounted to D14.34 million as of the end of 2022.
“As of 31st December 2022, the auditors noted that the closing balance due from pensioners amounted to GMD14.340 million. They requested for the loan policy on the loans disbursed to the pensioners, but this was not provided for their review; they were only provided with the board approval,” the committee’s report states.
The committee noted that auditors were unable to verify whether the loans were being administered under a formal policy because SSHFC failed to provide the requested loan policy document.
Auditors also pointed to the corporation’s use of a manual system to track loans advanced to pensioners, raising concerns about the efficiency, reliability and accuracy of its record-keeping processes.
To mitigate these weaknesses, the committee recommended that the Board and Management of SSHFC should have an automated pension register that is integrated with the pension payroll extraction system so as to reduce manual intervention and eliminate processing errors.
Lawmakers also called on the corporation to establish a regular reconciliation process between the automated pension register and the payroll extraction system to ensure the completeness, accuracy and consistency of pension records.
The committee also recommended SSHFC to develop and adopt a comprehensive loan policy to regulate administration, monitoring and recovery of loans extended to pensioners.
The report also highlighted broader problems with the corporation’s pension management system, beyond its loan portfolio.
Pension benefits are paid according to beneficiaries’ preferred schedules; monthly, quarterly, semi-annually or annually, as observed by auditors. However, the pension register used to track beneficiaries is maintained in Microsoft Excel and is not integrated with the system used to generate the pension payroll.
The committee said the lack of system integration increases the risk of data inconsistencies, manual errors and internal control weaknesses.
PEC said the upgrade of SSHFC’s pension management system would enhance internal controls, operational effectiveness and improve the accuracy and reliability of pension payments while reducing risks associated with manual data handling.
