NSITF Saga: The Incessant Controversies and Probes

SINCE the appointment of Senator (Dr) Chris Ngige as Minister of Labour and Employment, the Nigeria Social Insurance Trust Fund (NSITF) has been a hot spot of controversies and probes, all stoked by corruption and allegations of corruption.

As appropriate and desirable a concerted fight against corruption may be at every level of governance, the frequency with which the alarm is triggered appear to be inspired by motives and extraneous undercurrents that are themselves questionable and of serious concern to the NSITF’s statutory mandate.  

At the moment, the organisation is undergoing a double-barrelled investigation. While one panel was instituted by Dr Ngige following his alleged approval of President Muhammadu Buhari to suspend NSITF’s Managing Director and Chief Executive, Mr Adebayo Somefun, three Executive Directors and other top management staff; another probe is concurrently ongoing at the House of Representatives.

Following the suspension on July 2, 2020 on allegations of financial infractions and breach of procurement process, Dr Ngige inaugurated an Audit Investigative Probe Panel on July 16, 2020, headed by Comrade Ibrahim Khaleel, the Chairman of the Audit Committee of NSITF’s Governing Board, who is also one of the two representatives of the Nigeria Labour Congress (NLC) on the NSITF Board.

At the National Assembly, the House of Representatives is indirectly probing the finances of the NSITF through an allegation that Minister Ngige breached a presidential directive that prohibits cabinet ministers from directly interfering with or removing heads of parastatals without following due process outlined in the directive circulated by the Secretary to the Government of the Federation in May 2020.

At the House of Representatives

While the investigative oversight being utilised at the lower chamber of the National Assembly is seemingly not focused on any financial infractions, the testimonies of those appearing before it; particularly that of Dr Ngige and the suspended Chief Executive, Somefun, may have ultimately redirected public attention to the fact that the open fight is after all not about the restoration of sanity to the NSITF but more about money.

This may not be farfetched, for at the centre of the controversy are billions of naira which Minister Ngige claims the suspended top managers of the NSITF have mismanaged. 

Ngige’s Testimony

Appearing before the House of Representatives Ad Hoc Committee on Arbitrary Breach of Presidential Directives on the Suspension of Management and Executive Members of NSITF and other agencies by ministers, Dr Ngige stood his ground that he acted within the presidential directives to suspend Somefun and executive committee members of the NSITF.

A press release by Charles Akpan, Deputy Director of Press and the Ministry’s spokesperson, quoted the Dr Ngige as insisting in his testimony to the ad hoc committee that contrary to the perception in some quarters, the suspension “followed procedural compliance to the relevant authorities (Constitution, Public Service Rules, NSITF Act, Presidential Directives)” and that the suspension was hinged on issues bordering on financial and procurement infractions, “as well as acts of serious of misconduct.”

According to Dr Ngige, he took the action after going through the Auditor General’s Specific Periodic Report check into the affairs of the organisation from 2013 to early 2018 which contain evidence of infractions of Financial Regulations and Procurement Act involving a past Acting Managing Director and the new officials. He said such observed infractions, he acted “in the best interest of the nation” by seeking and getting “Mr President’s approval for the suspension of the affected personnel.”

Ngige said: “By a letter dated 30^th June, 2020, the Secretary to the Government of the Federation (SGF) conveyed Mr President’s approval to all the recommendations submitted by my office in respect of issues bordering on the Financial and Procurement infractions and acts of serious misconduct and referred to the guidance on implementation to a letter from the Chief of Staff to the President (CoSP) and further requested the Minister to avail his office with records of the implementation of Mr President’s approval, especially in the areas of personnel charges.

“Upon the suspension, a Presidential Joint Board Committee, comprising members from the office of Head of Service (OHOSF), Auditor General of the Federation (AuGF), Accountant General of the Federation (AcGF) and Federal Ministry of Labour and Employment, with Chairman NSITF Board Audit Committee as Chair, was inaugurated to look into the breaches and issues of serious misconduct involving those officials.”

Dr Ngige argued that as the supervising minister to the agency, he does not need to wait for a petition from the management board of the NSITF before he could act; a position which many see as obviously a violation of the presidential directive.

Although he noted that the finance and account department of the ministry “had countlessly informed the NSITF MD about flouting of Section 30 of the Financial Regulations which stipulates that parastatals, whether treasury funded or self-funding shall give an income vs expenditure to the supervising ministry monthly,” Dr Ngige did not state if this information was communicated to the Governing Board of the NSITF before he went ahead to carry out the mass suspension.

The minister’s testimony, as captured in the press release, essentially reflected his assumptions that the NSITF’s top management flouted laid down extant financial rules but failed to convincingly establish that he followed the required procedures spelt out in the presidential directive circulated by the SGF in his May … memo to cabinet ministers.

For instance, while Dr Ngige alleged that the NSITF failed to submit its annual audited accounts to him to assist in preparing his annual reports to Mr President; he did not say whether he queried the management for this failure or if he drew the attention of the board to this infraction.

When the Dr Ngige in his contestations outlined a number of infractions, ranging from procurement anomalies, irregular award of contracts and payments involving huge amounts of money, unauthorised foreign trips without approvals; non-submission of internal audit reports to the office of the Auditor General of the Federation; contract payment without evidence of performance, etc.; he also did not say if these allegations were first and foremost brought to the attention of Governing Board for it to fail to act before he proceeded to seek for the intervention of the presidency.

His only justification is he complied with the directive by reporting the occurrence of the alleged gross misconduct, and subsequently got approval to suspend the officers.

Ngige said: “By a letter dated 30^th June, 2020, the Secretary to the Government of the Federation (SGF) conveyed Mr President’s approval to all the recommendations submitted by my office in respect of issues bordering on the Financial and Procurement infractions and acts of serious misconduct and referred to the guidance on implementation to a letter from the Chief of Staff to the President (CoSP) and further requested the Minister to avail his office with records of the implementation of Mr President’s approval, especially in the areas of personnel charges.”

Upon achieving his desired goal of removing the officials, his only conclusion is simply that “suspension is not dismissal, but a stage in disciplinary procedures in the public service” which the presidential audit committee he set up is a platform to give the suspended officials the opportunity to clear themselves.

Somefun’s Defence

In his testimony before the ad hoc committee last Tuesday, Mr Somefun not only insisted that Dr Ngige went beyond his bounds in the suspension but also provided detailed background information on the finances of the NSITF.

While he was clear in his references to the minister’s breaches of the NSITF Act and the May 19^th 2020 circular on approved disciplinary procedure against Chief Executives Officers of Federal Government Parastatals, Agencies, and Departments, the information he provided on the finances, perhaps invariably offer the NSITF Board and Dr Ngige enough evidence to, point by point, expose the alleged malfeasance by taking him up on the details to drive home the argument for the alleged mismanagement of N3.4 billion.

According to Somefun the suspension “flagrantly breached” section S.3(i) and (vi), of the SGF’s circular, which states: “When an act bordering on serious misconduct against a chief executive officer is reported it shall be the duty of the supervising Minister through the Permanent Secretary to refer the matter to the governing Board for necessary action in line with the relevant provisions of the establishment act and the principles guiding chapters 3 and 16 of the public service rules.

“The Minister, after due consideration of the submission from the Board, (not from the Chairman of the Board) shall on the advice of the Permanent Secretary, forward the Ministry’s position along with the recommendations of the Board and the explanation of the Chief Executive Officer to the Secretary to the Government of the Federation (SGF) for processing to Mr. President, for a decision; 

“Upon receipt of the submission from the Minister, the Secretary to the Government of the Federation (SGF) shall without delay cause an independent investigation and advice Mr. President on the appropriate course of action, including interdiction or suspension in accordance with principles guiding sections 030405 and 030406 of the public service rules, pending the outcome of the independent investigations.” (His emphasis).

Somefun noted that “the Permanent Secretary was never in the picture of any of the said allegations, neither was the Governing Board of the NSITF in the picture at all. The Governing Board of NSITF never met to deliberate, talk not of passing resolutions in respect of any of the allegations against us.” 

In addition to the breach of the SGF’s circular, Somefun also argued that the suspension order breached sections 6 and 8 of the NSITF Act in addition to the guarantee for fair hearing as provided for in the Nigerian constitution.

Section 6 of the NSITF Act, which is on “Cessation of membership” of the NSITF Board, states: “A member of the Board shall cease to hold office if— “(a) he becomes of unsound mind; or (b) he becomes bankrupt or makes a compromise with his creditors; or (c) he is convicted of a felony or of any offence involving dishonesty; or (d) he is guilty of serious misconduct in relation to his duties.”

On the other hand, Section 8 titled “Removal from office of the Managing Director and Executive Director,” states that: “Notwithstanding the provision of section 7 (3) of this Act [which is on the tenure of office], the Managing Director or an Executive Director of the Board may be removed from office by the President if any circumstances arise which would require the Managing Director or Executive Director to cease to hold office as a member of the Board under section 6 of this Act.”

Minister’s totalitarian tendencies

The suspended managing director accused the Minister of Labour and Employment of totalitarianism and abuse of power in the manner he inaugurated the Ministerial Joint Board and Audit Investigative Panel.

“How can you suspend, malign a person’s character without investigation and then proceed to personally hand pick and constitute a committee to investigate the allegations you levelled against them?” Somefun asked, adding that the suspension is “a total breach of s. 36(1) of the constitution of the Federal Republic of Nigeria, which provides the right to fair hearing” where it asserts that: “In the determination of his civil rights and obligations, including any question or determination by or against any Government or authority, a person shall be entitled to a fair hearing within a reasonable time by a court or other tribunal established by law and constituted in such manner as to secure its independence and impartiality.”

He argued that investigative panel lacks the requisite “independence and impartiality” envisaged by the Nigerian constitution because it was constituted by an interested party in the matters to be investigated.

“How can an interested party be the One to solely constitute and choose the members of a supposed independent joint Board and audit investigative panel? No One should be a Judge in his own case. This is the rule against bias… This totally negates the principle of fair hearing…

“Fair hearing also means that an individual will have an opportunity to present evidence to support his or her case and to discover what evidence exists against him or her.

“How can there be fair hearing when we do not even have access to our offices to bring evidences, or documents to support our cases and prepare ourselves adequately before any independent Joint Investigative Panel? Our offices have been locked and we have been barred from coming to the office,” Somefun argued, while also objecting to the composition of the panel, asking rhetorically: “are we going to be sure of fair hearing? Your guess is as good as mine.”

He said an indicator that the panel is set up for a predetermined purpose is the exclusion of the Nigerian Employers Consultative Association (NECA) because “they chose to tell the truth.”

According to Somefun, the Chairman of the investigative panel, Comrade Ibrahim Khaleel, “was made to publicly retract his alleged “misrepresented statement” before he was found to be “fit and proper” for the assignment.”

According to Somefun the suspension “flagrantly breached” section S.3(i) and (vi), of the SGF’s circular, which states: “When an act bordering on serious misconduct against a chief executive officer is reported it shall be the duty of the supervising Minister through the Permanent Secretary to refer the matter to the governing Board for necessary action in line with the relevant provisions of the establishment act and the principles guiding chapters 3 and 16 of the public service rules.

On the alleged infractions

Responding to the allegation that preliminary investigation had established prima facia infractions on financial regulations and procurement act apart from other acts of gross misconduct in the fund, Somefun stated that Dr Ngige sometime in May 2020 wrote to both the Bureau of Public Procurement (BPP) and the Auditor General’s office to send officers to investigate the fund, a request he said was granted. He however stated that as at today the report of the investigation by the BPP and Auditor General’s office has not been submitted.

“The normal practice during any audit exercise is that even if there is a preliminary report of the auditors, they still have to meet with the management before their final exit meeting, for management response to the raised audit observations and provide all documents/schedules as may be requested for by the audit team before their final exit.

“Accordingly, a committee was constituted to work with the auditors, provide all documents/schedules as may be requested by the auditors etc. Before our suspension, management was appropriately responding to the issues. 

“We are of the opinion that the cart was put before the horse in pursuance of a long planned vendetta,” Somefun asserted while again asking rhetorically: “Why suspend before the final audit report is out?”

The suspended MD said all jobs went through the procurement process contrary to the allegations by Dr Ngige and that it was the minister that “forced” the NSITF to initially pay a consultant for a training job that was not done. “In the real sense it was the Honorable Minister that forced the Fund when I was on leave to initially pay a consultant for a training not done.

“On my resumption from leave, I discovered this and officially queried the GM(F) for making such a payment before the training was held and ensured that the training in question was done. This, of course, was one of my “numerous sins” that I was never forgiven.”

Somefun accused the minister of trying to run the NSITF directly as he decides on who to give promotion even against the advice of the “Exco and management.”

“It is on record at the meeting held with the Hon. Minister in respect of special promotion that I specifically informed the Honorable Minister that the action would cause disaffection amongst staff and demoralize the work force if the extant rules are not followed. On this basis, I refused to write the letter requesting for the special promotion.

“Thereafter, the Hon. Minister wrote directing the fund to implement accordingly. Hence, the letter directing us to give some staff special promotion,” Somefun explained.

On the allegation that the suspended management disobeyed a directive to reduce NSITF budget by 20%; Somefun dismissed as “totally false.”

While calling the chairman of the House of Representatives Committee on Labour as witness, Somefun said the NSITF had already reduced the existing approved budget and forwarded the reduced version and not a new estimate as requested by the ministry. “The Chairman of the House of Representatives’ Committee on Labor, (whom, as God would have it, is also a member of this committee) can confirm this,” he said.

On overseas travels, Somefun said it is the minister who decides who travels abroad or not as “the supervising ministry nominates all overseas journeys by the fund – for sponsorship.

He accused the minister of illegally appointing the NSITF Board Secretary against the provision of the NSITF Act as “he single-handedly appointed the Board Secretary from the South East without the relevant academic & professional qualification.”

Somefun in his presentation to the ad hoc committee also questioned Ngige’s barring of NECA’s Acting President from sitting on the Board of NSITF on the claim that he has not been given security screening as required.

Asking “why now, after almost One year on the Board?, Somefun added that as representative of a statutory organisation on the Board, “if any action to bar NECA’s Acting President was taken in good faith, one would have expected the Honorable Minister to communicate to the Board before now for the representative of NECA to go for the said security screening. Why now after almost eight months on the Board, and after the NECA representative was objective to publish their position on the suspension?”

Responding to the allegation that about N3.4 billion was lavished on non-existent staff training split into about 196 different consultancy contracts in order to evade the Ministerial Tenders Board and Federal Executive Council (FEC) approval, Somefun said:

“I read from some online publications that we carried out payment for trainings that were not done. I am surprised because the Ministerial Tenders Board approved about five trainings, which also had gone through budget defence in the supervising Ministry and at the National Assembly.

“It is pertinent I also mention that all the staff training were done locally and attended by all the nominated staff of NSITF and some staff of the supervising ministry.

“The N3.4 Billion training I presume they are writing about was the total of all training done for the years 2017, 2018 and 2019. The trainings were captured in the NSITF budget, duly approved and endorsed by the Hon Minister, and forwarded to the National Assembly for approval and was accordingly approved by the National Assembly.

“All trainings were done for over 5000 staff of NSITF and 56 branches of NSITF nationwide and there are evidences of training in pictures, certificates for staff that attended. Furthermore, the venues of the training are there to be confirmed. In addition, all staff that attended training were paid DTA and these can be confirmed in the NSITF Remita, statement of account.

“The trainings also all went through procurement process. Those within the Parastatals tenders Board threshold approval were approved by the Parastatals Tenders Board as provided by the BPP circular, Presidency circulars etc., and those that were above the Parastatals tenders Board threshold were forwarded to the Ministerial Tenders Board for necessary approval, and there are evidences of letters of approvals from the Hon Ministers office.”

Somefun noted that every contract awarded in NSITF followed due process stressing that there exist evidences of audit clearance, job completion certificates and that all contractors who received money for their jobs are evidently shown in the NSITF statement of account.

Somefun explained the allegations levelled against his management one after the other and concluded that his “being in charge of the day-to-day administration of the fund had been totally hijacked by the Hon Minister and the Board Chairman.”

He said though he recognises and respects the Minister as his boss, he is also knows that there exists a big difference between audit and witch hunting. “Audit is a process to correct you and enhance your performance and not a process to go out of your way, looking for faults to nail somebody,” Somefun stated.

The sitting also as drama

The ad hoc committee’s siting showcased very interesting altercations and drama between the committee’s members and some of those who appeared before them. Among the remarkable exchanges were those between Dr Ngige and Hon Faleke, which ultimately became a hot trending video shortly after.

The altercation between Dr Ngige and Hon Faleke who is a member of the ad hoc committee began after he (Faleke) had fired a number of questions to the Honourable Minister. Below are the questions and the altercation that ensued between them:

Hon James Faleke: It is obvious that you are not aware of your budget, but I have a letter here where you approved a lot of trainings for them, for the ministry within their budgets. Would you say that it must have been an oversight that you approved the budget without knowing?

Talking about budget, Honourable Minister, I have a mutilated budget here, manually adjusted; in so many instances where trainings per head was estimated to be N150,000, it is alleged that the Hon Minister, you increased it, it is alleged that all these handwritings were yours and so that was the way they submitted it to the National Assembly. Would you say that this is an act of direct interference in the day-to-day activities of the NSITF?

Hon Minister, in your opening speech, you said that because of the past activities of the NSITF, you wrote the names of those you think should be members of the new management based on your vision for the agency. But of course when the approval came, some of those names were not there, except of course the chairman. Will you say that your anger with them, these managers, is because your nominees were never taken from day one.

My friend has asked some questions regarding employment opportunities; will you say, Hon Minister, as Minister of Labour and Employment, someone saddled with the responsibilities of adjudicating and administering justice among employers and employees, will you said you have been fair to other sections of this country where employment of people by NSITF is mainly from Anambra State? When I took a look, a cursory look, Hon Minister; at the nominal roll, I saw about five Ngiges; I don’t know whether it is a family name or it is a community name?

Honourable Minister you said in your opening speech that I needed to recuse myself because according to you, I have grudges. We have a letter, Hon Minister, nominating an insurance broker that is not on the list of accredited brokers by BPP but the letter was signed by your wife. Would you have advised her to have recused herself from signing such a letter knowing full well that she was doing so even though the agency in question is not strictly funded and directing the agency to use that insurance?

Finally Hon Minister, as a politician, we all [sic] labour for this party, our own party, and apologies to my colleagues who are not from APC; we all labour and you alluded to it that some of your, some of the management staff, are also politicians. Will you say it is right, Hon Minister, to have also castigated them in the media, damaging there reputation, rather than following the process laid down by the Secretary the Federal Government [sic] for you to have duly taken this action?

Hon. Minister, with due apologies, I have to ask this question; finally, that you are a former governor, by the grace of God; you are also a former Senator of the Federal Republic of Nigeria. I also want to ask that you served your first tenure as a minister as a minister, now you are in your second tenure; will you say that your appointment by Mr President was based on you being a member of the party or because of your personality or because of your performance for the president at the election? Because I looked at the results in your local government, I discovered that you scored 2, 202 for the president while the PDP scored seventy something thousand. Thank you.

Dr Ngige: You are like my junior brothers, except Faleke whom they say is up to 60; I don’t know…

Hon Faleke: [cuts in] …I am 60 years

Dr Ngige: Mhmm, so you are near my age, at least I am 7 years older than you, I am sure. I am the same age with your mentor in Lagos, Asiwaju, and I was governor with him at the same time; he was a senator and I was a senator; I am a two-time minister, he isn’t a two-time minister…

Hon Faleke: [Cuts in] …but he won all his elections very well.

Dr Ngige: No problem about that, just like you won your own in Kogi State very well; and you are now the deputy governor and governor of Kogi State.

Hon Faleke: Mr Minister, please respond.

Dr Ngige: I’m responding my friend, if you yab me, I yab you ten times. I am a Lagos boy. You are just a small boy in Lagos. Look at this boy; Mushin boy, talking to a VI boy? I lived in Victoria Island. Look at this Mushin boy from Kogi.