Pressure mounts on RSSB over ‘poor performance’

Officials of Rwanda Social Security Board (RSSB) were yesterday quizeed over negligence and simplistic accounting structures in handling mega national projects.
Dr Gatera (L) responds to queries from PAC at Parliament, yesterday, as Dr Gakwaya listens. 
(Faustin Niyigena)
Dr Gatera (L) responds to queries from PAC at Parliament, yesterday, as Dr Gakwaya listens. (Faustin Niyigena)

Officials of Rwanda Social Security Board (RSSB) were  yesterday quizeed over negligence and simplistic accounting structures in handling mega national projects.

The officials were appearing before the parliamentary Public Accounts Committee (PAC) to answer to anomalies captured in the 2014/15 Auditor-General’s (AG) report.

 

RSSB is a public agency whose resources (operations and assets) are estimated at Rwf1,000 billion.

 

It received an ‘adverse’ report (meaning the AG cannot make sense of their financial statements) and was put on spot for multiple financial flaws.

 

Before the oversight committee, the agency was represented by Board chair Dr Innocent Gakwaya, who was flanked by the executive director, Dr Jonathan Gatera, and other senior executives.

RSSB was faulted for inappropriate accounting and bookkeeping, unreliable financial statements, reckless investments that threaten the sustainability of the pension fund and inadequate monitoring of investments.

It was also blamed for wasteful expenditure and gaps in the data base of beneficiaries.

“There are serious issues at RSSB which need a remedy,” said Jean Thierry Karemera, a member of PAC.

Top on the list was negligence in property management with specific cases of low occupancy rate in some constructed buildings, rent cost that does not put into account value of locations, unaccounted tenant payments, among others.

“What is being done to leverage profits and deliveries as expected when these investments were being planned? What kind and type of contracts do you normally sign with tenants? The occupancy rate has continuously been below 30 per cent,” wondered Juvenal Nkusi, chairperson of the committee.

Another issue that triggered a heated debate was the board’s ‘reckless’ investments that have seen the government pay a lot of money but reaping little or no returns.

According to Theogene Munyangeyo, another member of the committee, the government invested heavily in an ongoing housing construction project, Kigali Vision City, which was given a huge portion of land for free but its unit cost ($400,000) is far beyond the reach of a middle income earner.

“Why didn’t you build multi-storey buildings? There are also doubts whether the actual premises correctly reflect the feasibility studies,” he said. 

In the same area of housing, lawmakers further pressed RSSB officials on pending arrears amounting to billions of francs the board is yet to recover from other public institutions.

An example is over Rwf6 billion the City of Kigali has not paid over the past 12 years.

Auditor-General Obadiah Biraro said RSSB had not been able to estimate the entire value of its assets, and that huge amounts of money was being used to hire independent evaluators, which could have been done by their internal auditors.

Biraro said the board couldn’t meet its expectations using simplistic accounting methods and ill-founded investment methods.

“The board’s accounting structure is so simple, almost like for owners of retail shops. They don’t take into account the complexity of the board’s massive resources. They need help,” he told lawmakers.

Dr Gatera conceded to some weaknesses in both management and operations of the institution. He told the public accounts committee that a number of remedies were being set forward to address the challenges.

“Part of the remedies is amendment of the law governing RSSB. We have decided to revise investment strategies that were causing the board  losses. The new approaches will also boost our corporate governance and allow the board to invest strategically and deal properly with rogue contractors,” Gatera said.

He said the board had decided to set up internal investment committees to study projects in the pipeline before submitting them for final approval by the board.

“As for the low occupancy rate in some of our properties, we have instructed our property manager to increase the rate to 70 per cent in rural areas and 90 per cent in urban areas, failure of which will mean repercussions that can go as far as reducing his earnings,” Gatera added.

Lawmakers and officials of the board, however, saved discussions on the mutual health scheme, Mutuelle de Santé, for another day due to its complexity and persisting concerns over losses and meager contributions.

editorial@newtimes.co.rw

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