The Technical Audit Report has revealed that the Commerce Mortgage Bank (CMB), which was in charge of managing the National Social Security Insurance Trust’s staff mortgage loan, disbursed Le49,114,970,550.50 to NASSIT staff.
The Housing Scheme was said to have commenced on 1st May, 2011, with the condition that the fund would be revolving. The mortgage loan, according to the report, was charged an interest rate of 7% and later revised on 30th June 2014 to 3%. This was for a maximum period of 20 years and to be managed at 2%.
The audit report has further revealed that, as at November, 2014, the Fund’s account had a balance of Le18, 032,169.00.
The outstanding, according to the report, including interest, was Le42, 071,955,691.72. Prequalification of the loan was done by NASSIT, including the monthly repayment amounts and the repayment periods.
Commerce Mortgage Bank (CMB) was only involved in the evaluation of the Security to ensure that it was adequate for the loan amount and the disbursement of the same. The repayment of the loan was done at source and Commerce Mortgage Bank had sent an aggregate sum in lieu of the loan to NASSIT, the auditors discovered.
They have also discovered in their findings that monies involved in the loan was not maintained in the Commerce Mortgage Bank (CMB) books, as the bank only acts as a pass-through for the funds. However, in cases of default on the payment by former employees, the default formed part of the Bank’s books and was not transferrable to NASSIT. The agreement on the Employer Assisted Housing Scheme is silent on how to treat the said funds, the auditors noted.
The technical report also noted that, as at 12th December 2018, the total defaults on the staff mortgage loan was Le2, 950, 932, 539.72.
The defaults are grouped into two: defaulters who have exited the organisation after having achieved the 10-year threshold of maintaining the interest rate of the scheme; and those who have not achieved the 10-year threshold, whose loans are put on commercial mortgage scheme.
The report has catalogued these categories of individuals and the amounts they owed the Scheme. The Technical Audit Report has been highly critical of the activities of NASSIT, ranging from investments to lack of standard ICT and other strategic documents. Government, according to the report, was hugely indebted to the Trust, amounting to billions of leones.
The Technical Audit Report has, amongst other things, urged the Trust to cease all investments, conduct a structural assessment of all investments undertaken by the Trust to ascertain the safety of such structures.
NASSIT Disbursed Le49.1Bn Mortgage Loan To Staff
