14 January 2013

Namibia: Pending Court Cases Hamper SSC

THE Social Security Commission (SSC) has had four legal cases pending for the past two years and this is hampering operations. According to Auditor General Junias Kandjeke, the financial implications to the commission cannot be determined, as the outcome of the matters is not known yet.

Kandjeke urged the commission to continue exploring ways to harmonise its billing and debt collection process to ensure that the assessment of its income, accounts receivable and the related financial statements are valid, accurate and complete.

The pending legal matters include the Avid Investment Corporation case, an appeal case against a decision by the commission to reject a claim for compensation in terms of the Employees Compensation Act in which judgment has been reserved, and a labour case in the District Labour Court.

The latest incident is a case involving a former employee who defrauded the SSC and is currently serving a prison term. There was an order for his pension to be paid to the commission.

"However, there are difficulties in this respect because it is not within the power of the Magistrate's Court to make an order of this nature. In terms of the GIPF's rules the employee must give written consent to the commission to have his pension transferred to the SSC. He refused to give this permission and has now instructed a law firm to claim this money from the commission. This could potentially result in legal proceedings against the SSC," said Kandjeke in his audit report.

The acting executive officer of the SSC, David Keendjele, confirmed that the cases are still pending.

"Since these matters are still with the courts, they are sub judice and the commission cannot pronounce itself or provide details as per your questions until they have reached their logical conclusion through the competent court of law," Keendjele told The Namibian.

With regard to the assessment income and accounts receivable the total of outstanding employers' assessments for 2011 amounted to more than N$37,2 million. The assessment income for 2011 amounted to N$64,1 million.

"There is an inherent risk of completeness of the employers registered under the Employee's Compensation Fund, from which the assessment income is derived, due to the lack of regular updates to the database," said Kandjeke.

At the same time the SSC recorded a net total of more than N$63 million in the maternity leave, sick leave and death benefit (MSD) fund , while the contribution income for the 2011 financial year amounted to N$236,3 million.

"Of a sample of employers selected for MSD contributions testing, 56% were inactive, i.e. up-to-date contributions were not received from these employers on behalf of their employees for the year under review," said Kandjeke.

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