The Central Organisation of Trade Unions-Kenya (Cotu) wants the corruption purge in the public sector extended to the National Social Security Fund (NSSF) over the loss of taxpayers’ billions of shillings.
Cotu Secretary-General Francis Atwoli said yesterday that a forensic audit he commissioned in 2015 exposed the loss of funds through manipulated processes to irregularly approve four construction projects in Nairobi.
It is out of this report compiled by audit firm Ernst & Young that Mr Atwoli, a board member of the pension fund, wants further investigations conducted and those implicated prosecuted.
He further invited Director of Public Prosecutions Noordin Haji and the Director of Criminal Investigations, Mr George Kinoti, to investigate the NSSF.
The giant fund manages billions of workers’ money and the workers’ and employers’ representatives on its board include those from Cotu and the Federation of Kenya Employers.
“It is the workers’ resolution that we are supportive of President Uhuru Kenyatta’s war on graft. The NSSF is one of the institutions where corruption has been reported and we demand that proper action be taken to protect workers’ contributions,” said Mr Atwoli, during the closing of the Trade Union Federation of Eastern Africa conference in Nairobi.
The audit report exposed the incompetence of the NSSF’s top management on the four projects — Hazina Towers, Milimani Executive Apartments, Nyayo Estate Embakasi Phase VI and Tassia.
In the Sh1.6 billion Milimani Executive Apartments project, auditors observed that the contractors overstated the rate of return.
It was found that the projected rate of return at 40 per cent as per the feasibility study conducted by AAKI Consultants was not attainable.
“The recomputed rate of return is 17.8 per cent and a payback period of 15 years. The feasibility study did not consider potential risks,” the firm stated.
In the Nyayo Estate-Embakasi project, there was a questionable payment where the contractor was advanced Sh215.5 million without board approval. There was also no disclosure that one of the plots targeted for development lacked a title deed.
And in the Tassia scheme, auditors revealed slow collection of contributions from owners.
Documents seen by the Nation show that auditors faulted Tana & Associates, the consultant for Hazina Towers project in Nairobi’s CBD, for a “misleading” feasibility study, the board relied on to review the design from 24 to 34 floors.
This was done by overstating the rate of return at 11 per cent with a nine-year payback period. “But the auditor recomputed it to 3.3 per cent with a payback period of 30 years,” Ernst & Young said.