NSSF staff angry over wasteful computerization

As Kenya finally starts to embrace e-government, officials at the National Social Security Fund (NSSF) seem to have discovered a new loophole for siphoning pension funds by over-doing computer projects.

Social Security House, completed in 1994.

Social Security House, completed in 1994.

The NSSF has spent hundreds of millions on computer servers, hardware and software upgrades with little to show for it. In many cases, information technology (IT) projects are scrapped soon after they are implemented and quickly replaced with other projects without any consideration for costs.

A couple of weeks ago, the NSSF launched its service charter which was, among other things, to commemorate the re-birth of the organization in terms of accountability and customer-friendliness. Concerned employees of the NSSF say the uncovering of a fresh scandal could frustrate their efforts at reforms.

“In 2005 NSSF bought 28 HP servers that were delivered directly to selected branches, bypassing the procurement office,” an NSSF staffer told the Nairobi Chronicle, “one year later the servers were recalled to Nairobi to have software installed. It was then realized that a hardware upgrade was necessary and this was done at a cost of about Kshs. 1,000,000 (US$15,000). This took about six months. After one and a half years, the servers had not been used.”

According to the employee, whose identity we cannot disclose for obvious reasons, NSSF bought over 30 SUN servers in 2007. “SUN servers are so expensive, they are only manufactured on order; and only very rich companies can afford them,” narrates the whistle-blower.

Soon after delivery it became apparent that the SUN servers could not be used. There was nowhere to install them. They had to be put in racks to wade off suspicion. Some were stacked at the NSSF building in Bruce House, away from preying eyes. They were carried there by NSSF staff in a NSSF lorry and locked in a room on the 13th floor. To this day, it has not been possible to use them. To be able to utilize these equipment; NSSF requires an additional Kshs.50,000,000 to Kshs.100,000,000 ($746,000 – $1.4 million).

Still within the past one year, the NSSF bought and installed internet phones in order to cut down on telephone bills across its national branches. Nothing wrong there, if it wasn’t for the fact that the Fund had already bought 40 PABXs for almost all its branch offices at an average cost of about Kshs350,000 ($5224). Telecommunication experts say the new internet phone system installed by NSSF requires greater manpower, in addition to congesting the computer network. In order to free up network bandwidth, the NSSF has been forced to shift some of its operations away from the network, a decision that defeats the purpose of e-government.

In spite of these irregularities, the purchase of more computer equipment continues at the Fund. Concerned employees are considering blowing the whistle to the media and to the Kenya Anti-Corruption Authority before the scandal brings down the giant organization.

NSSF made news throughout the 1990s for buying land at exorbitant rates from  people close to the government of former president Daniel arap Moi. The NSSF also lost millions of shillings in legal fees to well known lawyers some of whom are serving in the cabinet of President Mwai Kibaki. Being the biggest pension and provident scheme in Kenya, and controlled by the State, NSSF funds are a big temptation to Kenya’s cruel, corrupt ruling elite.

Since the late 1990s, increased competition from private pension schemes has resulted in reforms being undertaken by NSSF management. It became necessary for the fund to sell its holdings in land and buildings in order to conform to regulations of the Retirement Benefits Authority. NSSF has also intensified its efforts at recruiting new contributors and today encourages the self-employed to join through a flexible payments program.

Unlike in the past, NSSF invests in government bonds, treasury bills and shares at the Nairobi Stock Exchange. NSSF is a significant shareholder in such companies as National Bank, Kenya Power & Lighting, East African Portland Cement, among other big corporations of Kenya.

Through its reform programme, the NSSF has gained financial stability, enabling it to pay retirees on time. However, fresh revelations of improprieties concerning the purchase of computer equipment are bound to frustrate the reform efforts of the new millennium. Just goes to prove the famous saying that old habits die hard.

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