The National Social Security Fund (NSSF) has dismissed the Auditor General’s report for the financial year ending June 2024, which flagged a series of questionable expenditures and failed investments totaling billions of shillings.
In response to the audit findings, the NSSF has defended its operations, terming the report’s interpretation “inaccurate” and “not credible.”
David Koross, the CEO NSSF clarified that the fund received an unqualified audit opinion indicating a clean bill of financial health for the first time in its history.
Korros highlighted the Fund’s ongoing transformation, noting that benefit processing times have reduced from 86 days to under 10, and the fund’s assets have grown by over Ksh.200 billion with projections to hit Ksh.600 billion by the end of the year.
The statement comes as NSSF hosts the ongoing ISSA Technical Seminar in Nairobi, attended by regional delegates and social security experts. The institution is under pressure to restore public trust even as it seeks to expand membership and deepen its impact on Kenya’s social protection landscape.
According to the audit, the Fund failed to recover Ksh.904 million in taxes mistakenly paid to the Kenya Revenue Authority (KRA) after it became tax-exempt. The Auditor General notes the lapse cost retirees interest earnings had the funds been properly invested.
The report also cited the acquisition of a Ksh.115 million parcel of land in Nairobi’s Upper Hill, whose title was revoked over a decade ago, rendering the investment void. In addition, the Fund was faulted for investing in two companies that suffered a 17.6% loss in value, costing contributors Ksh.27 million, and for holding shares in a loss-making bank valued at Ksh.38.4 million.
Further, the NSSF spent Ksh.12 billion to acquire government bonds, with the Auditor General raising concerns over premium payments exceeding Ksh.500 million, followed by capital losses of Ksh.272 million after some bonds were sold at a loss.
The Fund was also found to be sitting on idle properties worth Ksh.4.02 billion within Nairobi’s CBD, and struggled to collect rent arrears from eight tenants owing nearly Ksh.14 million, some of whom had obtained court orders to delay payment.
In terms of operational expenditure, the report shows that the Fund spent Ksh.317.5 million on travel, conferences and meetings — with Ksh.11.3 million used for conferences procured from non-registered suppliers. An additional Ksh.51 million went to vehicle maintenance and Ksh.410 million on renovation projects, including Ksh.2 million on a reception desk.
Despite setting a target of 650,000 new members for the year, NSSF registered only 556,306, falling short by nearly 94,000. Meanwhile, trustee emoluments for the period amounted to a staggering Ksh.68.7 million, part of an overall Ksh.6.9 billion administrative cost.
