Mohamed Fuaad Daboh, Director General- National Social Security and Insurance Trust (NASSIT).
The National Social Security and Insurance Trust (NASSIT) has come under intense scrutiny following a recent audit that revealed significant discrepancies in its financial records. Auditors discovered that the principal and accrued interest from debenture loans, which were expected to be deposited into the Trust’s account, are currently untraceable. A thorough review of NASSIT’s investment portfolio indicated that the corporate debenture loans issued to various affiliated companies, including joint ventures and subsidiaries, totalled an alarming One hundred and forty million, nine hundred and twenty-nine thousand, three hundred and seventy-five New Leones (NLe140,929,375), equivalent to 140.9 billion Old Leones.
However, auditors found a troubling lack of documentation to confirm the cumulative annual interest payments, which amounted to One hundred and sixty-one million, eight hundred and sixty-nine thousand, one hundred and thirty-five New Leones (NLe161,869,135.96), or approximately Le161.8 billion Old Leones, as of December 31, 2023. The audit revealed no evidence to verify the repayment of the principal amounts, even though the loan tenures had already expired. In light of these findings, the Audit Service Sierra Leone (ASSL) made several recommendations to NASSIT’s Director General.
These included the immediate recovery of overdue loan and interest payments from the joint ventures and subsidiaries, as well as a comprehensive review of the Trust’s loan management practices, especially concerning related parties. The ASSL also requested evidence of actions taken to address these issues. In response to the auditors’ findings, NASSIT officials stated that the Investment and Projects Division had prepared a proposal titled “Write-Off Toxic Debenture Loans” for the attention of the Management Investment Committee (MIC) and the Board Investment Committee (BIC).
During discussions, it was suggested that the Division should adhere to national and international accounting laws when writing off these toxic loans. Furthermore, the Investment and Projects Division, with the support of the Legal and Board Secretariat Division, was tasked with devising strategies to recover some of the toxic loans and debentures.
Despite these claims, auditors noted that NASSIT management provided only an excerpt of the decisions made during the MIC meeting and failed to produce any evidence of repayment for the principal amounts and interests. Alarmingly, the loans continued to be reported at their book values in the financial statements, raising further concerns about the Trust’s financial integrity.
More details next edition.
