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We must get systems right at NSSA: Nzenza

17 Aug, 2019 - 00:08 0 Views
We must get systems right at NSSA: Nzenza Dr Nzenza

The Herald

 Africa Moyo: THE INTERVIEW

The National Social Security Authority (NSSA) forensic audit report, which was tabled in Parliament a few weeks ago, has sent shock waves in the country.

The quantum of misappropriation of funds by management has stunned pensioners who are getting a pittance of payouts every month. To discuss more on the forensic audit report and NSSA operations, our Deputy News Editor Africa Moyo (AM), caught up with Public Service, Labour and Social Welfare Minister Dr Sekai Nzenza (SN) to find out her perspectives and the way forward. Read  on.

AM: What have been your immediate observations regarding how NSSA is managed, given that you said it’s for social security?

SN: When I became minister, I was coming from an international development background where my experience is to do with social protection. I have experience in health, I am trained in health; how to meet the basic needs of the people, issues to do with drought, earthquakes; that’s my experience on a global experience.

I also have Zimbabwean experience, I grew up in the rural areas and I know what the basic needs are. So I got into this seat and into NSSA, I needed to fully understand the mandate of NSSA, and what quickly emerged was issues of corporate governance and by corporate governance we are looking at who is managing who, who is accountable to who. And the role of good corporate governance is to ensure that we maintain good, sound, accountable standards.

The role of the board is to maintain oversight over the company, in any company, that is role of the board. So the board must have diversity of skills. In a board you need a lawyer, an accountant, an auditor; different people, people with management experience and when you bring those people together, in the case of NSSA, someone with investment experience, actuarial experience. So a diverse board is then led by a board chair, who works with a team of board members.

In that team, you have sub-committees on investment, on human resources, one on managing accounts and risks as well as ensuring they are aligned to the strategy. The other one is to maintain the brand. In other words, this team of board members, working with the board chair, are responsible for maintaining oversight and they have a strong relationship with the CEO of the company.

If there is lack of clarity in the decision-making process, this is crucial, between board chair, sub-committees and management, it’s often difficult to make anyone accountable.

AM: I get you minister. But given what you saying, I read that there was no unity in the NSSA board. How do you react to that?

SN: What I realised as soon as I got into NSSA is that there were some irregularities, particularly in how decisions had been made or were being made, but under the NSSA Act, I also realised that the board members who were there, their term had expired.

So I used the Public Entities Corporate Governance Act to bring to an end the terms of those board members. Alongside that, there was a forensic audit that had already been commissioned by the Auditor-General Mrs (Mildred) Chiri, with BDO Accountants. So it was quite a good moment in me coming new and the forensic audit has been commissioned, and an opportunity for me to bring to an end the board whose term had expired and be able to use the corporate governance best practice standards.

Just to divert a bit, I had just come back after spending three to four years in the US, working mainly as a senior governance analyst.

My specialty was to look at good corporate governance among international NGOs doing social protection. So I was coming to the job well-equipped to see where the system is broken.

My first war was to ensure we had a new board, so we followed the processes. They board members have to be approved by the President (Cde Mnangagwa) and they were approved, which is a good thing. Once the board was approved, I then presented the draft forensic audit report, then I met with Mrs Chiri, the BDO Chartered Accountants and the new board, and we analysed the report before it was actually final. That is when we realised that the forensic report had five key areas showing irregularities.

The five key areas were to do with corporate governance, human resources, investments, ICT and labour issues. Because of the complexity of the irregularities in this forensic report, it required a team of expert lawyers who specialise in five of these issues I am talking about.

AM: Okay, so why did you take long to present the report in Parliament as requested by MPs?

SN: The delay was caused by the requirement to do due diligence on the lawyers that we wanted to hire to unpack the report. The processes require that we go through Procurement Regulatory Authority of Zimbabwe (PRAZ). That took two months before I could get those lawyers.

I also needed an expert advocate in criminal law, and that’s Thabani Mpofu. We needed his advice on the report to say look, do you think in this report there are any criminal elements or are we just talking about malpractices, misconduct, (and) maladministration?

So he was able to say he could identify what he saw as criminal elements. The other five lawyers, because we had a researcher by the way, the main aim here is to recover because if there is maladministration, misconduct, we made some losses.

AM: Let me interject at this point; what is the extent of losses suffered by NSSA?

SN: I cannot quantify the losses, but when I say irregularities, they can point to losses. So the aim is to recover some of those losses; maybe some of those losses have been done due to bad investments or some of those loses may have happened because we have not done due diligence when giving out loans.

So you can see these irregularities needed expert lawyers to say, yes, something was not done well here. So they then sat down, and I was under pressure from Parliament to say give us the report. So they had 30 days to give me a summary report of their findings. When they presented that to me, I realised (there were) two ways to look at this; the criminal side that goes to (ZACC chairperson) Judge (Loice) Matanda-Moyo working with Thabani Mpofu (and) the internal part, within NSSA, which is really now my next step. My next step is to look at the internal processes, identify what actually went wrong, where is broken? Are we practising good corporate governance?

Are our systems working as well as they should? And for me to be able to know, I work closely with the board now, that is where it is absolutely important to ensure that we have good corporate governance and those sub-committees within the board, the investment committee will now look at how the investments were done; the HR committee will now say when this person was hired, how was this person hired? Was that done properly, are these the right skills, did something go wrong in the process? And then they advise. They may well need a lawyer. They are still reviewing these processes.

AM: So where are you now regarding these processes?

SN: Where we are right now is to say the past has already happened, we now want to move forward. That’s what I am really focused on, in fixing what was broken before because we know what’s right. We want to build trust with the people for we have been entrusted with their money; people are paying their money, so we want to be able to deliver that to the people and I also want to ensure that when somebody comes to NSSA; when I started, people didn’t know me, so I would just join the queue and when you sit in there and start talking, you are a customer, you ask what one would have travelled for and they tell you ‘I am following up on my husband’s benefits’. Someone said it was their eighth year, moving up and down to process her late husband’s money. Eight years! I noticed there was something wrong in our customer service.

That’s where I found that the most important people are the beneficiaries and sometimes we tend to forget who we are trying to serve. It’s the beneficiaries, the people we have disadvantaged in not managing NSSA properly.

So what I want to do is to ensure that woman who has been coming to NSSA for eight years from Murewa should not come back to Harare. It’s a lot of work, but we now need to get the systems right. We don’t want her to come for eight. We want her to go to Murewa and have a proper ICT system and database where that woman, with her husband’s card, can go to Murewa office and key-in that card number with the details of her husband,  where he was working, when he died and what are her benefits?

AM: That’s a good idea, but pensioners are complaining that they are getting peanuts given the current prices.

SN: Pensioners are complaining, quite rightly that what they are receiving compared to the cost of living is too low. That’s part of the review process that we are looking at. We also realise the urgency of that and in July we were able to given a bonus, like an extra month’s payout.

We did that with the board in July, but the key priorities is to review upwards the pensions, but it’s not going to be easy because of our current economic situation. The board and management are seriously looking into this.

AM: But why penalise pensioners for NSSA’s mismanagement?

SN: They shouldn’t be penalised, that is part of the review process to fix upwards the payments, and hopefully to address the needs of the pensioners going forward. As I said, it’s not going to be easy, but what they should feel encouraged by is that NSSA is interested in cleaning up the mess and ensure there is transparency and accountability.

AM: What measures have you put in place to eliminate issues of recurring corporate governance deficit at NSSA?

That is the legacy of the past and I want to fix what is broken now. I want to be forward-looking and I have confidence that we are developing good corporate governance. If we keeping looking into the past, then we can’t go forward. So we are saying to the public, we have a good board in place and we are in the process of looking for a new CEO. We are going to be advertising widely, internationally, hoping that Zimbabweans in the Diaspora with that kind of experience can come back. If they are the right people, and have the right skills, and of course subject to approval by the board and the President, I am hoping to get the right person in that position fairly soon.

AM: How strong is the investment committee of NSSA given the past investments where the Beitbridge Hotel has become a white elephant?

SN: There is a legacy of the past again, the example that you gave is part of what I am referring to as some of the irregularities in investment and I don’t want to even imagine that we can ever have a similar situation like that.

I can categorically say we will ensure that we do what’s right, we exercise due diligence in investments, especially due legal diligence and we have the right people within the investment committee. We are looking forward to positive developments, in good corporate governance, good sound investments with transparency and accountability. I think what happened in the past is regrettable.

The losses that happened in the past are regrettable, but again that’s being unpacked now by people responsible for looking at what went wrong in the past and can we recover? How much can we recover from the losses?

AM: How do you intend to recover some of the losses incurred, for instance in bad investments in Beitbridge Hotel and Celestial Park?

SN: I am no expert in recovery, but this is why I have to rely on expertise in investment. One of the lawyers we have, who identified what I referred to as irregularities in investments, his responsibility now is to unpack what happened?

You are presenting to a case where you are also realising that something was not done well. We want to establish what we can say this was done due to incompetence or without due diligence, or this is a corrupt element; it’s criminal and there is a way of recovery.

He knows how to recover because he is an expert in that field because he has proven that he is capable of knowing what’s criminal and what’s not. I rely on that expertise and advice. If there is anything criminal in the investment process, that’s not my job, my job is to ensure that we can recover.

I want the good, sound advice that says ‘NSSA lost so many millions, but we can recover this much and give back to the pensioners’. Look, there will be other cases where they can say this was done so badly and it is impossible to recover anything. There is nothing much I can do about that, but there are other cases where they say this is not criminal, this is sheer maladministration, and failure to know what was required of them. Under those circumstances, it’s a loss maybe because we put in the wrong person for the job. Maybe with all good intentions, they made a mistake and that’s a loss, we come across such cases.

AM: Tell us your plan to at least make the NSSA get value from the Beitbridge Hotel.

SN: You are being very specific, I don’t have enough knowledge in terms of what exactly went wrong and how we can recover money. I am still waiting to be briefed on the details. As you can understand, NSSA has so many investments and I should know every single detail, but what the forensic audit report did was simply to show irregularities. We will now look at each investment and see what can be done.

where he was working, when he died and what are her benefits?

AM: That’s a good idea, but pensioners are complaining that they are getting peanuts given the current prices.

SN: Pensioners are complaining, quite rightly that what they are receiving compared to the cost of living is too low. That’s part of the review process that we are looking at. We also realise the urgency of that and in July we were able to given a bonus, like an extra month’s payout.

We did that with the board in July, but the key priorities is to review upwards the pensions, but it’s not going to be easy because of our current economic situation. The board and management are seriously looking into this.

AM: But why penalise pensioners for NSSA’s mismanagement?

SN: They shouldn’t be penalised, that is part of the review process to fix upwards the payments, and hopefully to address the needs of the pensioners going forward. As I said, it’s not going to be easy, but what they should feel encouraged by is that NSSA is interested in cleaning up the mess and ensure there is transparency and accountability.

AM: What measures have you put in place to eliminate issues of recurring corporate governance deficit at NSSA?

That is the legacy of the past and I want to fix what is broken now. I want to be forward-looking and I have confidence that we are developing good corporate governance. If we keeping looking into the past, then we can’t go forward. So we are saying to the public, we have a good board in place and we are in the process of looking for a new CEO. We are going to be advertising widely, internationally, hoping that Zimbabweans in the Diaspora with that kind of experience can come back. If they are the right people, and have the right skills, and of course subject to approval by the board and the President, I am hoping to get the right person in that position fairly soon.

AM: How strong is the investment committee of NSSA given the past investments where the Beitbridge Hotel has become a white elephant?

SN: There is a legacy of the past again, the example that you gave is part of what I am referring to as some of the irregularities in investment and I don’t want to even imagine that we can ever have a similar situation like that.

I can categorically say we will ensure that we do what’s right, we exercise due diligence in investments, especially due legal diligence and we have the right people within the investment committee. We are looking forward to positive developments, in good corporate governance, good sound investments with transparency and accountability. I think what happened in the past is regrettable.

The losses that happened in the past are regrettable, but again that’s being unpacked now by people responsible for looking at what went wrong in the past and can we recover? How much can we recover from the losses?

AM: How do you intend to recover some of the losses incurred, for instance in bad investments in Beitbridge Hotel and Celestial Park?

SN: I am no expert in recovery, but this is why I have to rely on expertise in investment. One of the lawyers we have, who identified what I referred to as irregularities in investments, his responsibility now is to unpack what happened?

You are presenting to a case where you are also realising that something was not done well. We want to establish what we can say this was done due to incompetence or without due diligence, or this is a corrupt element; it’s criminal and there is a way of recovery.

He knows how to recover because he is an expert in that field because he has proven that he is capable of knowing what’s criminal and what’s not. I rely on that expertise and advice. If there is anything criminal in the investment process, that’s not my job, my job is to ensure that we can recover.

I want the good, sound advice that says ‘NSSA lost so many millions, but we can recover this much and give back to the pensioners’. Look, there will be other cases where they can say this was done so badly and it is impossible to recover anything. There is nothing much I can do about that, but there are other cases where they say this is not criminal, this is sheer maladministration, and failure to know what was required of them. Under those circumstances, it’s a loss maybe because we put in the wrong person for the job. Maybe with all good intentions, they made a mistake and that’s a loss, we come across such cases.

AM: Tell us your plan to at least make the NSSA get value from the Beitbridge Hotel.

SN: You are being very specific, I don’t have enough knowledge in terms of what exactly went wrong and how we can recover money. I am still waiting to be briefed on the details. As you can understand, NSSA has so many investments and I should know every single detail, but what the forensic audit report did was simply to show irregularities. We will now look at each investment and see what can be done.

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