‘The Biggest Scandal’: Over GH¢442.7M cash locks up in SSNIT non-performing investment – Auditor-General


The report of the Acting Auditor-General of the Republic of Ghana Johnson Akuamoah Asiedu on the Public Accounts of Ghana on Public Borads, Corporations and other Statutory Institutions for the period ended 31st December, 2020 has cited Social Social Security and National Insurance Trust (SSNIT) in a whooping scandalous act.

The subsection of the report as Intercepted by Coverghana.com.gh has captured an amount of GH¢1,802,692,515 under cash irregularities. Out of the total figure of GH¢1,802,692,515 cash irregularities, GH¢442,730,876.74
represented cash locked up in non-performing investment by SSNIT.

According to the report, cash irregularities are related to the misapplication of funds, non-retirement of imprest, payments not authenticated, payment of Board Allowances to Council Members without Ministerial approval, cash locked up in non-performing investments.

Johnson Akuamoah Asiedu said, these occurred as a result of poor oversight responsibility and non-existent controls. Other contributory factors were finance officers’ failure to properly file and keep records, Management’s failure to ensure the security and safety of vital documents, non-maintenance of returned cheque registers, Management’s inertia in complying with procedures stipulated in the Public Financial Management Act, and poor accounting systems. The report has also outlined key recommendations to amicably address the current issues and upcoming shorts falls.


The Auditor-General has therefore urged the Managements of the Public Boards, Corporations and other Statutory Institutions to strengthen supervisory controls over their finance officers, and ensure that they adhere to the provisions of the Public Financial Management Act, 2016 (Act 921). He also recommended the authentication of all payment vouchers, prompt payment to bank and full retirement of accountable imprest on due dates.

The report further said;

1. The Trust made a total loss of US$11,794,109 from the liquidations of 3 of its investments with a total cash outlay of US$14,768,153.00.


The Auditor-General has urged Management to investigate the non-performance of the investments for all with the aim of ensuring value for money and ensure that officers whose action led to the loss are appropriately sanctioned for the loss. They further urged Management to ensure that, effective feasibility studies are carried out before investing.

2. Management of the Trust could not retrieve an outstanding loan balance of GH¢146,964,641.07 from the Ghana Road Fund as at 31 December 2019. This was partly due to the Trust’s inability to
put in place strict measures to ensure that 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 Accounts, to
recover the monthly instalment in line with paragraph 11.0 of the loan agreement.


The Auditor-General also urged Management to collaborate with Ministry of Finance and Ghana Road Fund to ensure full repayment of the loan.

3. Management of the Trust could not provide the supporting documents for GH¢140,198,668.12 debt disclosed in the 2019 Trial balance as Government of Ghana portion of Student loan.


The Auditor-General has recommended to Management to ensure that sufficient documentations are generated and kept at all times. Management should also ensure that the debt is paid by the Ministry of Finance.

4.  According to the Auditor-General, they have noted that Management of the Trust could not collect from Ministry of Finance, the divestiture proceeds of US$626,522.47 from Divestiture Implementation Committee (DIC) since 2012. This was the proceeds due the Trust, after the sales of its 13.60% equity stake in Subri Industrial Plantation Limited (SIPL) to Plantation Socfinaf of Belgium.


The Audit Service has urged Management to step up efforts to recover the amount (US$626,522.47) from the Ministry of Finance and DIC.

5. The Audit Service said, despite the requirement of Section 90 of the Public Financial Management Act 2016, the Trust has not received any returns in the form of value appreciation or dividend in its investments in 9 listed and 6 unlisted equities (Companies) with a total paid up consideration of GH¢63,174,927.73 and US$65,892,842.09 respectively.


They have urged Management of the Trust to take an effective decision on the companies to avoid further loss. Again, they Audit Service has urged management to investigate the non-performing investments of the 15 Companies and ensure value for money is achieved. They also also advised Management to perform thorough feasibility studies before undertaking any investments of
like nature.

6. “Contrary to Section 1 of the Value Added Tax Act, 2013 (Act 870), We noted that CCL Property Management Limited, which is 100% owned by SSNIT could not pay the outstanding tax liability
of GH¢5,371,230.00, due to its failure to charge respective VAT on its services.


“We recommended to Management to ensure that CCL Management levy the required VAT and transfer the same to GRA. Management should carefully review, tax implication in engaging in similar businesses.” The report disclosed.

7. Management of the Trust made payments totalling GH¢38,671,409.09 to 3 investee Companies without agreeing with
the other stakeholders of the Companies, the nature of expected returns from the payments. This resulted in payments not being classified as loan nor added to the equity portion of the Trust in the Companies involved.

To derive the maximum benefit from the investments we urged Management to reach an agreement with the relevant stakeholders of the Companies to properly classify the payments.

8. Management proposed to the Board to write off losses of GH¢26,838,588.87 due to the official liquidation of Bridal Trust,
which could only pay GH¢5,490,000.00 out of its accumulated loan of GH¢32,328,588.87. The Trust also, made losses totalling US$11,794,109.00 from the liquidation and sale of equities holding in the 3 companies.


For proper accountability of public funds, the Audit Service recommended to the Board to liaise with the Minister of Finance to seek parliament approvals to ensure that the losses are duly written off.

9. The Board could not ensure effective returns from the Trust’s investment in Intercity State Transport Company (ISTC). This company among others has not presented its audited financial statements over the years, nor pay any dividend. SSNIT however, guaranteed for the company to take a loan of US$17,500,000.00 from
ADB BANK to procure 100 buses.

The Trust did not again recover the
various loans and Shareholders advances to the company totalling


The Auditor-General recommended that, the Board should take appropriate measures to ensure that the pensioners’ fund invested in ISTC yield returns. Again, Management should monitor the
performance of the loan US$17,500,000.00 guaranteed ISTC to procure 100 Buses to augment their fleet to avoid possible repayment by SSNIT.

10. Contrary to Paragraph 4.7 of the Policy on Official Accommodation, 2014 the Executive of the Trust did not review the rental rates of the Trust’s accommodation for over 6 years.


They urged Management to appropriately review the rental rates of the properties.

11. Twelve (12) parcels of lands in 8 Regions which belongs to the Trust were found to be in various levels of encroachment or attempted encroachment by persons. This was due to delay in the development of the lands, coupled with insufficient due care by Management in the protection of the lands from encroachment.


The Office of Auditor-General recommended to Management to consider developing some of the lands into service plots.

12. Funding policy is an effective means for sustainable management of pension schemes, the Board however, could not
ensure the preparation of a funding policy, to enable them to manage effectively and sustain the pension scheme.


“We urged Management to immediately commence the process leading to establishment of Funding policy.”

13. The Actuarial valuation report of the basic Social Security Scheme as at 31st December 2014 by International Labour Office recommended a sustainable Contribution rate of 19.2% for the Scheme. The proportion of contribution used to pay benefits in 2017 and 2018 was in excess of 90%, which implies that investment income will be used in the very near future to pay benefits.

The ability of the Trust to generate income to sustain its operations thus, to pay benefits and operational cost declined from 17% in 2017 to 16% in 2018.


The report recommended to Management to institute pragmatic strategies to increase investment income and control cost. We also urged Management to effectively collaborate with all stakeholders to achieve sustainable salaries contribution rate for the Trust.

SOURCE: Coverghana.com.gh


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