Auditor-General Raises Red Flags Over NSSF Contributions and Assets
Thousands of Kenyan workers rely on the National Social Security Fund (NSSF) to safeguard their retirement savings. However, audit findings continue to raise serious concerns about the management of members’ contributions and major investment projects.
The Auditor-General’s report for the 2017/2018 financial year questioned the accuracy of Sh14 billion reported as members’ contribution balances as of June 30, 2018.
read:NSSF, EACC Face Scrutiny Over Housing Projects
Sh5.6 Billion in Unremitted Contributions
According to the report signed by former Auditor-General Edward Ouko, NSSF recorded Sh5.6 billion classified as unremitted contributions.
This figure arose from the Fund’s failure to fully enforce legal provisions requiring employers to deduct and remit workers’ contributions on time.
A review of 183 branches across five regions showed:
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Sh6.3 billion in outstanding contributions and penalties
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Sh1.7 billion in unremitted contributions
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Sh4.5 billion in accumulated penalties
By March 2019, only Sh771 million had reportedly been recovered, leaving significant outstanding balances.
The Auditor-General stated that the recoverability of the accumulated Sh5.6 billion remained doubtful.
Variances in Contribution Records
The audit also identified inconsistencies between figures recorded in:
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The Software and Social Security Pension Administration System (SSPAS)
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Monthly branch reports
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Financial statements
Monthly SSPAS reports showed collections of approximately Sh14.016 billion, while financial statements reflected Sh14.044 billion — a variance of Sh27.5 million.
Further discrepancies of about Sh13.6 million were noted between global and financial statement reports.
NSSF management attributed the differences to M-Pesa payments, miscellaneous income, and reconciliation adjustments not captured in branch reports.
However, the Auditor-General noted that reconciliation documentation was not presented for verification.
Contributions in Transit
The report also flagged Sh663 million categorized as contributions in transit — funds received but not posted to individual member accounts.
Under the Retirement Benefits Act, such contributions should be properly reconciled and credited to members.
The Auditor-General observed that reconciliation and posting had not been completed.
Hazina Towers and Milimani Apartments Under Scrutiny
Audit findings extended to NSSF’s construction projects.
Hazina Towers, initially planned as a 34-floor development, was scaled down to 15 floors. The contract sum was reduced from Sh6.7 billion to Sh4 billion.
The contractor, Nanchang Foreign Engineering Company (Kenya) Ltd, completed the revised structure at approximately Sh1.6 billion in April 2018.
The board approved the sale of the building, expecting to realize Sh3.6 billion. However, by April 2019, only Sh753 million had reportedly been received.
The audit also questioned Sh2.8 billion in receivables from buyers of executive apartments in Milimani.
Mavoko Land Disposal Questions
NSSF also invested Sh126 million in undeveloped land in Mavoko, Machakos County.
The 70-acre parcel was subdivided into seven plots and reportedly sold for Sh18 million each, totaling Sh126 million.
However, records indicate that only Sh12.6 million had been paid, leaving a substantial outstanding balance.
Broader Governance Concerns
The audit further raised concerns about:
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Sh6 billion worth of assets under construction
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Project delays and revised completion timelines
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Weak enforcement of employer compliance
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Reconciliation and reporting inconsistencies
These findings have sparked calls for:
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Stronger internal controls
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Independent forensic audits
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Improved contribution tracking systems
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Greater transparency in asset management
Why This Matters
NSSF manages billions in workers’ monthly contributions meant to secure retirement benefits.
Any discrepancies in contribution accounting, enforcement failures, or asset management gaps directly affect millions of Kenyan workers.
The audit findings highlight the urgent need for stronger oversight, clearer reporting, and decisive corrective measures to protect pension funds and restore public confidence.