Thursday, 22 May, 2025
PIC-SSAA grills NSSF over budget overperformance, idle capital, and procurement breaches
Wednesday 21st May,2025.5th Floor, Bunge Tower, Parliament Buildings.
The Public Investments Committee on Social Services, Administration, and Agriculture (PIC-SSAA) on Tuesday summoned top officials from the National Social Security Fund (NSSF) to respond to a series of audit queries flagged by the Auditor-General on the Fund’s financial operations for the years 2021/2022 to 2023/2024.
The session, chaired by the Committee’s Vice-Chairperson, Hon. Caleb Amisi (Saboti), focused on critical issues including revenue overperformance, underutilization of development budgets, long-standing tax refunds, irregular land acquisition, and procurement breaches.
The Auditor-General reported that NSSF recorded Kshs. 105.3 billion in actual revenue against a budgeted Kshs. 78.9 billion, an overperformance of Kshs. 26.3 billion (33%). This was attributed mainly to increased mandatory contributions under the NSSF Act and the onboarding of public servants in August 2023.
However, MPs questioned why this significant shift had not been captured in the original revenue projections.
"The reason why we have a budget in organisations is to ensure we don’t miss the target,” remarked Hon. Martin Peters Owino (Ndhiwa). “Overshooting without justification indicates poor planning.”
NSSF CEO David Koros explained that the variance stemmed from new contribution rates and positive investment performance. We collected Kshs. 26 billion in 2022/2023, and with the revised structure, we projected Kshs. 38 billion in 2023/2024—a 46% growth. Investment income also exceeded the budget by Kshs. 6 billion due to strong equity markets and interest rates.”
Despite the revenue windfall, capital budget absorption stood at a meagre 5%, with only Kshs. 206 million utilised out of a Kshs. 4.06 billion allocation.
Hon. Michael Wambugu (Othaya) expressed concern that the underutilization of funds negatively impacts investment returns for contributors.
Koros attributed the delay to late budget approvals and a freeze on new capital budgets by the National Treasury in March 2024. “We received project approvals in January 2024, which significantly shortened our implementation window.”
Another point of contention was the Kshs. 940 million tax receivable, including over Kshs. 900 million owed by the Kenya Revenue Authority (KRA) dating back to 1996–1997, years after NSSF had already gained tax-exempt status.
“The Fund is not getting any returns on this long outstanding balance,” the audit report stated.
Management explained that efforts to recover the money are ongoing, despite a 2016 High Court ruling and a six-month timeline previously recommended by Parliament. “We continue to engage KRA, and this remains a legacy issue,” said Koros.
The committee also scrutinised the acquisition of undeveloped land in Upper Hill for Kshs. 115 million. The parcel was later repossessed by the government and allocated to the Judiciary after its title deed was revoked in April 2010, having been reserved for public use.
Hon. Bishop Kosgei questioned the diligence done before purchase: “How was the title cancelled without proper investigations beforehand?”
Vice-Chairperson Amisi echoed the concern: “Was any due diligence conducted before such a significant investment?”
Koros confirmed that the matter is pending in court, with a hearing set for 11th June 2025. Investigations by the Ethics and Anti-Corruption Commission are also underway.
An audit finding revealed that NSSF spent Kshs. 317 million on meetings and travel, including Kshs. 11.3 million on conference facilities procured through unregistered suppliers—contravening procurement laws. In one case, a hotel was paid Kshs. 3.3 million against a Local Purchase Order of Kshs. 1 million, leading to an unexplained over-expenditure of Kshs. 2.3 million.
Hon. Joshua Kimilu (Kaiti) was blunt: “Don’t struggle to justify mistakes. If it’s a mistake, just call it out.”
Management acknowledged the lapse but noted corrective measures had been implemented to prevent future violations. “The extra expenditure was due to an unplanned day of preparation. However, retrospective approval was sought and granted,” Koros stated.
Hon. Fatuma Jehow (Wajir County) also queried the criteria used to invest in Treasury bonds, asking whether contributors were getting value for their savings.
Koros assured the committee that the Fund’s investments were sound: “We continuously invest the money and assure the Committee that the funds are safe.”