Legislators have backed the Committee on Commissions, Statutory Authorities and State Enterprises’ (COSASE) recommendation to Kampala Capital City Authority (KCCA) to recover the 10 per cent contributions that were remitted to National Social Security Fund (NSSF) for its pensionable staff.
The committee report presented by the chairperson of Cosase, Hon. Mubarak Munyagwa, criticised KCCA officials for causing financial loss to the government.
This is contained in the report to Parliament following a petition to Parliament by a whistle-blower in August 2019.
The whistleblower held that NSSF should be compelled to immediately transfer the equivalent of 10 per cent remitted to NSSF since 2013 to the Consolidated Fund with interest accrued.
The petitioner cited abuse of office and causing financial loss to the government by KCCA through paying 10 per cent NSSF contributions for its permanent and pensionable members of staff who are supposed to be administered by the Pension Act.
Munyagwa said that KCCA had received advice from the Public Service Commission and the Solicitor General against remitting to NSSF in the absence of a specific instrument regulating NSSF contributions of KCCA Staff. He added that KCCA management acted irregularly to subject staff to NSSF contributions instead of applying the Pensions Act.
“We advise that all officers who resigned or retired from the Authority but were beneficiaries of this illegal Act should be made to pay back the money failure of which the Accounting Officer who remitted the monies makes good the loss,” he added.
Munyagwa however noted that the irregular practice of remitting NSSF contributions of permanent and pensionable staff has been stopped by the new Executive Director, Dorothy Kisaka and efforts to recover the funds are underway.
The Committee further observed that NSSF was not at fault to accept remittances from KCCA as they could have been voluntary or special contributions as provided for in the law.
“NSSF does not interfere with the managerial issues of their client institutions. In case KCCA was remitting for permanent and pensionable staff, NSSF had no mandate to direct otherwise,” the report stated.
The chairperson observed that the whistle-blower was patriotic in disclosing the irregularity to higher authorities and called for his compensation.
“The whistle-blower is therefore entitled for five per cent of the net liquidated sum of money recovered in accordance with Section 19 of the Whistle-blowers Act, 2010,” said Munyagwa.
Hon. Theodore Ssekikubo (NRM, Lwemiyaga County) said that it was strange for the payment to be made to NSSF.
“Why did NSSF allow this in the first place when they knew that these staff were encompassed under the government pension scheme,” Ssekikubo added.
Erute County South MP, Hon Jonathan Odur recommended that the whistle-blower’s name should be forwarded to the medals committee for his gallant and exemplary behavior.
Odur also disagreed with the decision by the committee to exonerate NSSF in the matter because it is difficult to remit the 10 per cent from the employer without remitting the other five per cent as a contribution from the institution as per the regulations.
“This was a well-planned syndicate; the account in NSSF used to collect this money is a fake account used to syphon the money from the Consolidated Fund,” he said adding that, ‘the committee did not establish how much money was stolen neither did they establish whether the people who retired during the collection of this money accessed their benefits from NSSF’.
Hon. Nathan Nandala-Mafabi (FDC, Budadiri County West) said that the law makes it clear that people working in an institution classified as permanent and pensionable and therefore eligible for a pension scheme should not contribute to NSSF.
“NSSF should be made culpable in this and immediately transfer this money to the Consolidated Fund. It was not supposed to accept the application for saving from KCCA without the consent of Public Service,” Nandala Mafabi noted.
Nandala-Mafabi moved an amendment to the report that the NSSF Managing Director and his Accounting team be charged for causing financial loss to the government. He also recommended that NSSF pays back the funds.
Hon. Munyagwa conceded to the amendment stating that when the Solicitor General advised against the move to remit to NSSF, the then KCCA ED, Jennifer Musisi halted only her remittance to NSSF, a move Munyagwa found to be irregular.
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