Audit Finds D1.13 Billion Still Owed to SSHFC by Government and State Institutions

By Fatou Sillah

A parliamentary review of the audited financial statements, management letters, and activity reports of state-owned enterprises for the 2022 financial year has revealed that government institutions and state agencies collectively owe the Social Security and Housing Finance Corporation (SSHFC) more than D1.13 billion, with auditors raising concerns over prolonged repayment schedules, underpayments, and unresolved account reconciliations.

The findings are contained in the report of the National Assembly’s Standing Committee on Public Enterprises (PEC), which scrutinized the financial performance and governance of state-owned enterprises.

Among the most significant concerns is a loan agreement between SSHFC and the National Food Security Processing and Marketing Corporation (NFSPMC), formerly the Gambia Groundnut Corporation (GGC).

Auditors found that under a 2020 agreement, NFSPMC acknowledged owing SSHFC D223.298 million and agreed to repay the debt at a rate of D200,000 annually. At that pace, auditors estimated it would take approximately 1,116 years for the debt to be fully repaid.

“This is considered to be too long before the corporation will recover the amounts in full without default from NFSPMC,” the auditors stated.

The report also examined a 2019 loan agreement between SSHFC and the Gambia Civil Aviation Authority (GCAA). Under the agreement, GCAA acknowledged a debt of D92.6 million and committed to monthly repayments of D500,000.

However, auditors found a discrepancy of D2.5 million between the amount expected to be paid during the year under review and the amount actually received, raising concerns about compliance with the repayment arrangement.

The committee further reviewed a 2020 agreement between SSHFC and the Government of The Gambia, under which the government assumed a debt of D816.7 million on behalf of the National Water and Electricity Company (NAWEC).

The agreement required annual repayments of D163.34 million, payable in two installments. Auditors found that only D81.67 million—half of the expected annual payment—had been made during the period under review.

Auditors also examined the financial relationship between SSHFC and NAWEC and found weaknesses in the accounting and reconciliation process.

According to the report, payments for monthly electricity and water bills owed by institutions, including GTSC, Ocean Bay Hotel, and Sun Beach Hotel, were intended to offset NAWEC’s debt to SSHFC. However, auditors found that SSHFC maintained two separate general ledger accounts relating to NAWEC, one of which reflected a negative balance, suggesting possible overpayments or accounting inconsistencies.

The report further noted that the reconciliation process between SSHFC and NAWEC had not been completed, leaving the final outstanding balances unverified and not fully reflected in the corporation’s financial statements.

In response to the findings, the Public Enterprises Committee recommended that all loan and repayment agreements involving NFSPMC, GCAA, the Government of The Gambia, and NAWEC be comprehensively reviewed and reconciled to ensure compliance with agreed repayment terms.

The committee also called for the completion of the reconciliation exercise between SSHFC and NAWEC to establish accurate account balances and improve the reliability of the corporation’s financial records.

Additionally, auditors raised concerns over SSHFC’s management of penalty charges for overdue payments. While penalties are reportedly imposed on defaulting institutions, the corporation does not maintain a comprehensive record detailing the total penalties assessed, amounts collected from each institution, and outstanding penalty balances.

The auditors recommended that SSHFC establish a comprehensive penalty reporting system to strengthen monitoring, improve transparency, and enhance accountability in debt management.