By Top Intelligence Team
KAMPALA/UGANDA: The Inspectorate of Government (IGG) recently commenced investigations into alleged abuse of office, corruption, and mismanagement of the National Social Security Fund (NSSF) by the former executive director, Mr. Richard Byarugaba.
In an interview with the Ugandan premier newspaper, The Daily Monitor, recently, the spokesperson of the IGG, Ms. Munira Ali, said investigations into the matter started in the second week of January, and that if all goes as planned, the exercise would be undertaken within 60 days.
“We started the investigations as soon as we received the complaint. I think it was last week but one. Investigations have already started,” she said, adding,
“We have a target of 60 days. We hope that we shall be able to conclude within that time frame. However, when you are investigating certain matters, especially to do with crime, you might find that the issue is broader than probably what you heard and may require more time to conclude investigations, but our target is to do within the 60 days that the minister requested. We want to try and do that,” she said.
The NSSF Board chairperson, Dr. Peter Kimbowa, recently confirmed to this publication that the board had recommended that the Inspectorate of Government office takes over investigations into alleged abuse of office, corruption, and mismanagement of NSSF funds by the former executive director.
Ms. Munira said currently, the IGG’s office is finalizing the preliminary work of the investigations.
“Starting investigations has a lot of preliminary work to do. When we received the complaint, we started with preliminaries which include reviewing a complaint and making an investigation plan among other things. All that is part of the investigation process,” Ms. Munira said.
She also confirmed that the office of the IGG had received a petition from some workers and members of trade unions, among other concerned citizens demanding a better NSSF.
Now, The MediaScape News Intelligence Desk has established that beyond the IGG team, a covert intelligence squad is interested in the following areas:
This website breaks down each of the above areas as follows:
Pension Administration System (PAS)
ONE: The core Pension Administration System (PAS) went live in December 2021. This system was procured to solve all the problems that the parallel existing systems of JDE, Livelink, and Aquilla were not able to handle. The project is valued at around US$7,000,000. The implementing consultants are a company that implemented a core banking system for Centenary Bank Uganda, which failed and they had to abandon it and procure a new system. The investigators are wondering whether proper due diligence was done by NSSF.
TWO: Implementation of this system has been on for now close to three (3) years, and it has been characterized by a lot of challenges, flaws, and red flags for which management had all the information and evidence to rectify the defects.
THREE: To start with, Management recruited an IT guru, with one key deliverable to implement the PAS. At the time there was a famous project that was run with Consultants holistically looking at all aspects of the organization and business headed by Tayoa. When Guru joined the Fund, the first thing she did was to disband this project and start up another called “Skyfall” which was meant to deliver the core Pension Administration System (PAS). This was the start of all the problems to date.
After realizing the mess, she created and could not fix, she abandoned the project halfway and resigned. To the staff’s shock, management awarded her a contract to be the lead consultant, after he had resigned from the Fund, for the same project he had abandoned. The investigators are following this lead.
FOUR: As it is now, all the key persons of this PAS project, have since left. D resigned in December 2022 – just in time to escape IGG investigations. These exits should not be confused for the structure review, they are voluntary exits; Investigators have briefed.
Fast forward, to when the decision to go live was made, most of the management and staff knew the system was not ready but there was so much pressure to do so, motivated mainly by the fact that with such a huge monetary investment there was no going back whether the system was capable or not. Reluctantly, staff involved in the project signed off the User Acceptance Testing (UAT), and the system went live in December 2021. This is when all the problems of the PAS system started to manifest. These span from technical design problems, technical requirements mismatch, lack of customization flexibility, and lack of functionalities for the main business needs like contributions, benefits, and compliance, among others.
FIVE: When the decision to go live was made the indication of the project team was that the system had achieved the following success percentages. Employer/Employee Registration – 96%, Contributions collection– 93%, Benefits Processing – 76%, and Financials – 51% it is against these that the sign-offs were done. However, due to the continued failure of PAS to function well and persistent users’ outcry, around September 2022, a workshop meeting was held at Sheraton Hotel to assess the users’ perspective of the success level of PAS implementation. These were the users’ ratings backed with detailed evidence that all users who attended are privy to. Employer/Employee Registration – 54%, Contributions Collection – 49%, BenefitsProcessing – 14%, and Financial – 69%.
SIX: Noteworthy, the main reasons that were given by management to the Board to approve the massive investment in the PAS were.
a) To facilitate mid-term payment once the new law was enacted, citing the fact that the existing systems of JDE, Livelink, and Aquilla were unable to handle the huge numbers of members who were expected to claim.
b) That onboarding of new products after the new law which allows collection from all employers and eligible Ugandans including those in the diaspora, there would be a need for a system that can handle new products designed for all these members, including voluntary and informal/entrepreneurial mass market.
c) To achieve a 1-day Turnaround (TAT) processing time for benefits payment by 2025.
d) To achieve UGX 20 trillion targets by 2025 the Fund needed a new system that could efficiently support contributions collections.
e) To achieve 95% customer satisfaction target the Fund needed a new system that could deliver a seamless experience
Upon examination of PAS against these five objectives, which informed the basis of approval to invest such a huge sum of members’ savings, we note as follows:
Mid-term payout.
The squad is also looking at the mid-term payout for clues to possible fraud. Between March – June 2022, The Fund paid over UGX 400 billion to over 24,000 members at the inception of the 20% mid-term access benefit. It is on record that approximately 70% of these payments were processed and paid manually and physically by members coming to the branches instead of online and straight through processing as had been promised. Some benefits are paid outside of PAS because it could not handle these categories of benefits. Several claimants who tried to claim online had to repeat the process physically. This was also aggravated by the unexplained delays in processing payment. To date, the Fund is still grappling with the reconciliation of midterm access payments that had to be paid outside the PAS system.
The problems posed by the PAS system include the reflection of negative balances on some member statements and wrong outstanding balances on member statements. This has caused a lot of outcries from members.
Implementing new products under the new law.
To date, no new product has been implemented and this is because PAS is not able to accommodate the new products. The consultants have asked for a new contract in order to enhance the system to enable it to deliver voluntary products (the smart life project).
Request for changes to accommodate new or even originally scoped business needs culminates in the Greek consultants demanding money and new contract discussions. This points to extreme inadequacies of the original contract.
1-day benefits payout TAT
According to the material this website has accessed, this was the main justification for investing in PAS. Unfortunately, it is the area that has been most negatively impacted by PAS. Before PAS go-live in 2019 – 2021, the average benefits payout TAT had improved to around 7 days but it has since deteriorated to an average of 16 days, with some claim types taking as long as over 3 – 6 months. This is contrary to performance reports and official information shared with the public. Users and members are both equally frustrated by the failure of PAS to deliver on this critical function, and below are some of the specific challenges that remain unresolved to date.
a) Claims continually get stuck at almost every level of benefits processing within the PAS system due to system design failure and workarounds have become the order of the day as the consultants seem to have no solution to this problem.
b) Claims “get lost” in the system and reappear randomly, which leads to delays in processing payments of the members. In fact, some members are called back, after long waits, to resubmit their claims.
c) Midterm benefit is only 20% of an eligible member’s savings. When this is paid out through PAS, the system does not deduct the amount for some of the members. Failure to offset midterm payments is a critical anomaly as it poses potential financial loss to the Fund.
d) Claims workflows get duplicated by the system and this leads to double payments of members, hence financial loss to the Fund.
e) Some claim types have proved impossible to be processed in the PAS, such as survivors (death) and invalidity (sickness) benefits. No single claim gets to be processed successfully in PAS without manual intervention.
f) Member statements with wrong interest; Over 10,000 statements fall into this category. Whereas the system was supposedly designed to generate interest automatically, in some instances, it is not able to do so, culminating in the production of the wrong interest.
g) Failure to reconcile Member statements after midterm benefits are paid, and failure for contributions to be reflected on member statements.
These are just a few among the many problems of PAS’ failure to deliver on the objective of improving the benefits payout TAT.
Closely related is the Compliance module that was part of the originally scoped key deliverables for PAS. This as well has not been developed at all and due to the frustration of the users, discussions are underway to consider a new system for Compliance.
Evidently, PAS has not supported this objective of increasing coverage and contributions.
NSSF SmartCard
In 2015/2016, the Fund launched a sham smart card at the Annual members’ meeting. The launch was presided over by his Excellency the President, in a colorful ceremony at Serena Kampala Hotel. The card did not offer any product. It had been printed at an exorbitant cost in India where a verification team had gone to validate functionality and it approved the procurement. A Project team was recruited to issue the cards across NSSF branches in the country. It transpired that the cards were of no use, there were mere plastics with member names and NSSF numbers. Some of the cards were not issued out and have been destroyed as waste. The card delivered no value for money to the Fund and its membership.
In the same year, 2016, the Fund invested significantly in point-of-sale pay machines – similar to “Pay Way” machines and placed them at different supermarkets across the country. It had been envisaged that the machines could be used by members to check their balance statements and earn royalty shopping points. The project failed and the machines were withdrawn and scrapped.
In this FY 2022-23, the Fund has once again launched another sham smart card in partnership with a top bank. Whereas this card has been widely publicized, it has no product it supports and has been roundly rejected by staff who are tasked with promoting it despite being enticed with weekly prizes for taking up the cards. Members have questioned the rationale of promoting hard copy cards while purporting to significantly invest in and shift to e-transactions. They have questioned why the Fund does not follow the example of UMEME, NWSC, KIKUBO-ON-LINE, and TELECOMs which serve their customers very efficiently without having to fill their wallets with hard copy plastic cards.
These projects are basically schemes for siphoning money out of the fund by the leadership who, it is suspected, get kickbacks on the purchases and implementation. Examples of these include SmartCard, Hi-Innovator, CSR deals
Major events such as the Annual Members meetings have been used by the top management to reportedly misrepresent the true state of the Fund’s business. They primarily instead use these occasions as a platform to amplify their ambitions.
Increase Customer Satisfaction
Whereas in the beginning it was anticipated that PAS would be piloted for a period of about 6 months, after which it would stabilize, it is now over one year and user frustration seems to be increasing.
Customer satisfaction has been significantly impacted as a result of the system failures and has plummeted. Members storm NSSF branches inquiring about inaccuracies in their statements and delayed processing of their benefits claims. These inefficiencies are all attributable to PAS and the manipulative leadership at the Fund.
Two weeks ago, the Senior Presidential Advisor on Security and Veteran war hero, Gen Salim Saleh, wrote to cartoonist and social critic Spire Sentongo after the latter drew a cartoon depicting the general being involved in the running leadership battles at the NSSF.
In a brief three-sentence letter dated January 17, 2023, Gen. Saleh wrote thus;
“Dear Spire Sentongo, Compare and Contrast Namukekera Rural Industrial Center and NSSF Pension Towers at Nakasero.”