Probe pension fund rot: Mofomobe

….NBC-Lesotho fingered in swindling pensioners of M20 million

TEBOHO KHATEBE MOLEFI

 MASERU – Legislator and Basotho National Party (BNP) leader, Machesetsa Mofomobe, this week proposed to parliament a motion to investigate allegations of rot embedded within the Public Officers’ Defined Contribution Pensions Fund (PODCPF), where a whopping M20 million on overcharges is said to have been stolen.

The financial misconduct is reported to have taken place over a period of five years spanning 2017–2021, according to a forensic audit report resulting from an investigation conducted by South African company Bowman Gilfillan Inc. into PODCPF administrator NBC-Lesotho’s conduct. The Bowman Gilfillan Inc. report, as Public Eye can reveal, points to M20 601 770.48 on both nil contributors and refunds swindled from the PODCPF by NBC-Lesotho.

The tightly wrapped confidential November 14, 2022, report, which this reporter has seen, has not been made public but was circulated among PODCPF board members, including Principal Officer, ’Mamotlohi Mochebelele, and board chairperson, Ministry of Finance and Development Planning Principal Secretary, Nthoateng Lebona.

Mofomobe told Public Eye in a brief interview this week that the content of the report titled ‘Draft report in respect of our forensic investigation into the administrative services provided by NBC-Lesotho (Extended Mandate)’, which he said he has also seen, is worrying and calls for immediate action by parliament to protect the integrity of the PODCPF and the erosion of national finances. NBC-Lesotho has been administering the fund, estimated to be worth M12 billion, since its inception in 2008, the monopoly of which has for years been a point of contention between pensioners and the fund.

“M12 billion is a lot of money, and it should gravely concern any sound-minded person that there are allegations that this money is not being used properly by fund administrators. There are claims that the money is also invested where administrators and fund managers have interests. Board members also approve certain investments for personal gain and ulterior interests.

“We are aware of media reports that a massive M1 million was spent by the fund for a forensic audit, which, sadly, they are sitting on, yet we already know it contains damning allegations,” Mofomobe pointed out. The outspoken lawmaker cautioned that serious steps must be taken because if and when the fund collapses, it will “bring the government into disrepute and collapse it,” adding that “yesterday, when I checked, I was informed that my motion is the first immediately when we parliament sits after the committee of supply completes its business.”

Public Eye has since learned that NBC-Lesotho has penned a 65-page letter addressed to the PODCPF challenging the Bowman Gilfillan Inc. report and that Mochebelele, as PODCPF Principal Officer, is currently engaging with NBC-Lesotho over the forensic audit findings and demanding the pensioners’ money back. NBC-Lesotho has reportedly dismissed Bowman Gilfillan Inc.’s claims contained in the report.

Bowman Gilfillan Inc. was engaged to conduct an intensive investigation into NBC-Lesotho’s conduct on July 15, 2021, mandated to investigate the administrator’s provision of services for the financial year ending March 31, 2018, 2019, and 2020 following allegations of possible overcharges by NBC-Lesotho. Investigations began in August 2021 and, among others, unearthed that NBC-Lesotho had unlawfully been charging PODCPF money to manage Nil Contributors and Refunds without authorisation.

“Our investigation established that most of the anomalies and problems identified are in relation to Nil Contributors. Some members had been listed as Nil Contributors for the whole period under review (3 years) and appeared to have been so listed for much longer. We established that NBC Lesotho still charges the Fund every month for these Nil Contributors, although no transactions are reflected,” the report reads in part.

“Refunds were previously managed by the Fund but were transferred to NBC Lesotho for it to manage. Although requested, neither NBC-Lesotho/NBC (SA) nor the fund could provide any correspondence as to when refunds were transferred to NBC-Lesotho for it to manage. “The only correspondence is dated January 2014, and it relates to the fund requesting NBC to administer the payout to the teachers from whom deductions were incorrectly made. Refunds are not dealt with in the contract with NBC-Lesotho,” the report continues.

The forensic audit report also reveals that the NBC-Lesotho charged money amounting to M9 146 369.20 and M11 455 401.28 for full charges by the NBC-Lesotho for the period under review, further charging a total of M8 138 181.84 for 5.85 Nil Contributors that had been on the system for longer than three months and charging 5 280 that had been on the system longer than six months, for a total of M7 425 788.44 as per the report.

In Bowman Gilfillan Inc.’s opinion, PODCPF should negotiate with NBC-Lesotho to pay back the M7 425 788.44, or at least a portion of it. The forensic audit was the culmination of a two-year scuffle between the PODCPF and pensioners, who were demanding a probe into NBC-Lesotho’s service provision.

After the forensic audit was complete, pensioners made several unsuccessful attempts to get their hands on the forensic report, but all their efforts drew a blank, leading to a fresh fight against the fund, which they accused of sitting on the report to either protect NBC-Lesotho or to doctor the report. Early in November 2023, NBC-Lesotho launched a legal bid against the PODCPF, accusing the fund of failure to honour their service level agreement after the fund had issued a tender bid for a new administrator. Workers unions had previously thrown their weight behind pensioners’ demand for a forensic audit of NBC-Lesotho, imploring the finance minister’s intervention to ensure accountability and transparency within PODCPF.

Early last year, the unions endorsed protracted calls by the Public Officers Defined Contributions Pensions Association (PODCPA) that a forensic audit of the PODCPF be undertaken, also calling for the suspension of NBC-Lesotho as fund administrator. The pensioners demanded that the PODCPF board seek a new administrator until the results of the audit vindicated NBC Lesotho.

PODCPA has been fighting the re-appointment of NBC-Lesotho as PODCPF administrator for a long time, arguing that the company’s continued endorsement as administrator goes against a litany of concerns they have raised over time in relation to NBC’s conduct and handling of their fund.

The joint call by the PODCPA, the Lesotho Police Staff Association, and the Lesotho Public Staff Association on the release of the forensic audit of the fund threw the administration of the pensioners’ fund into public discourse, putting under the spotlight incumbent finance minister, Dr Retšelisitsoe Matlanyane, and her chief accounting officer, Lebona, who chairs the PODCPF board.

The unions said this joint appeal and act of solidarity towards common interests lays bare their plight on the disregard of their right as workers to be served in a transparent and accountable manner at all times in the conduct of their affairs, while also displaying the “sheer arrogance that can be characterised as nothing less than insolence that has so far been displayed in the handling of our affairs.”

They further took Lebona to task, as PODCPF board chairperson, for not honouring her promise to release the report by the end of November 2022, asking why she has also “decided to board a bandwagon of ignoring the pensioners in subsequent communications.” As PODCPF Principal Officer, Mochebelele and the board have been accused of apparent efforts to frustrate the release of the forensic audit report.

Speaking to Public Eye in an earlier interview on the PODCPA crusade for a forensic audit and dislodging NBC-Lesotho from the fund’s administration, PODCPA has maintained that the PODCPF board’s unadulterated expression of intent to oppose the association’s application was not only illogical but suicidal because pensioners owned the funds that NBC administered and that they were “within our rights to demand transparency.”

Since Public Eye broke this story several years ago, NBC-Lesotho’s management has on many occasions, while speaking on the pensioners call for its disengagement and purported maladministration of members’ funds, denied any wrongdoing, with managing director Godfrey Vatsha saying the company has neither been appointed as the asset manager of the PODCPF, its investment consultant, nor as an actuary of the fund. They have also scoffed at the touted NBC-Lesotho removal as fund administrator for poor service, inclusive of irregular conduct, malfeasance, and loss of credibility.