Federal Government uncovers N62.555billion fraud in NSITF

Federal Government uncovers N62.555billion fraud in NSITF

- The Nigeria Social Insurance Trust Fund (NSITF) is a cesspool of fraud and lawlessness, a report by a federal government panel has revealed

- The panel uncovered about N62.555 billion fraud in the agency

- The money was said to have been spent without proper accounting procedures

A federal government panel has uncovered about N62.555 billion fraud in the Nigeria Social Insurance Trust Fund (NSITF).

According to the panel which submitted its report to the minister of labour and employment, Dr Chris Ngige, on Wednesday, July 18, the money was spent without proper accounting procedures.

While presenting the report to the minister, the chairman of the panel, Ishaya Awotu, said the agency’s books have not been fully audited since 2011.

According to him, the panel discovered that several unauthorised allowances were paid to the staff and the management, while overseas trips and training were carried out without approval from the office of the Secretary to the Government of the Federation as required by civil service rules.

He further said that the panel noticed weaknesses in the operation of the fund, adding that even though it had external auditors from 2011 to 2015, the audited financial statements and the management letters for year 2011, 2012, 2013 and 2014 were submitted to the management, but were incomplete.

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His words: “As at the time of forwarding this report, none of the years audited accounts has been concluded while the audit reports remained unsigned. The basis for management’s re-appointment of the external auditors for the auditing of 2015 accounts could not be ascertained;

“The fund does not have financial operational manual to guide in its financial activities while compliance with the provisions of the financial regulations in carrying out their financial transactions was very weak;

“Bank reconciliation of most of the bank accounts of the fund was not carried out. Without the reconciliation of the bank statements, irregular payments and fraud committed on the accounts cannot be detected. Furthermore, financial statements prepared from unreconciled accounts cannot be reliable. Non-reconciliation of bank accounts violates Section 716 of the financial regulations;

“The internal audit function of the fund was ineffective. The panel observed that for the period 2013 to 2017, the internal audit department did not audit the cashbooks of the various bank accounts at the headquarters of the fund; books and records of investments and treasury department, procurement processes, registration of employers and payment of contributions by the employers, enforcement and inspection activities, fixed assets etc. The lack of effective auditing of the fund’s accounts and records violates section 1701 of the financial regulations;

“It was observed that the fund was operating with incomplete books of accounts. Several bank statements of the various bank accounts, cashbooks, etc. were not submitted for audit examination and sighting. Financial statements (accounts) produced from such accounting system cannot be reliable.”

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According to the report, “there were several transfers of funds in between bank accounts without authorization and approvals.

“The sum of N15,737,757,697.91 was transferred from one account to another. Evidence of the approvals and payment vouchers authorising the transfers were not presented to the panel,” it said.

The panel also said that NSITF should carry out full reconciliation of assets acquired and recorded in the cashbooks against the fixed asset register.

It also recommended that a financial plan on the remittance of the N2,650,731,225.93 deducted from staff salaries to various authorities should be made.

The minister had in February 2018 inaugurated the panel to investigate the finances of the fund, following a damning report from the Economic and Financial Crimes Commission (EFCC) indicting former board members.

Some senior management staff were sent on compulsory leave to allow the panel carry out its assignment without any interference.

Receiving the report, Ngige promised that it would be implemented fully and the lapses identified corrected.

“After reading the EFCC report, we felt it was necessary to set up this administrative panel to find out why the internal audit mechanism broke down in such a way that the N62 billion contributed cannot be seen.

“Those indicted included those nominated by the Nigeria Labour Congress and the Nigeria Employers Consultative Association. So, we were not in a hurry because we needed to give the new board a new lease of life because you don’t put new wine in old wine skin,” he said.

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In a related development, Professor Usman Yusuf recently disclosed that the N720 billion invested by the National Health Insurance Scheme (NHIS) in 12 years has vanished without a trace.

The NHIS boss made who made this known during a power-point presentation to the agency’s governing council in response to a query by the board said the “investments” had no approvals of successive ministers of health, past boards of the NHIS and the Office of the Accountant-General of the Federation (OAGF).

According to him, billions were lost to diversion and under-payment of interest, adding that banks, former executive secretaries, select management staff and interest groups were all neck-deep in the scandal.

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Source: Naija.ng

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