NSFAF board a fees paradise

NAMIBIA Students Financial Assistance Fund board members were last year paid over N$2,2 million in sitting fees – mostly evading mandatory tax, The Namibian has learnt recently.

In June The Namibian reported about the hefty fee payouts that included a N$120 000 allowance to board chairperson Patty Karuaihe-Martin, for a trip she undertook to Cuba for eight days, but it was not clear at the time how the sitting fees were shared. The Namibian can now reveal that Karuaihe-Martin received more than N$600 000 in 2015, and about two-thirds of that (which is N$400 000) was not taxed. Karuaihe-Martin did not respond to questions sent to her two weeks ago on whether she paid tax on the board fees. Other members – Mbushandje Ntinda, Leezhel van Wyk, Timotheus Angala and Franz Gertze – also benefited from the paradise of untaxed board fees, where each fees, received anything between N$220 000 and N$400 000. Sources said most of the board members did not pay taxes in full on the sitting fees, while the fund is also accused of creating unnecessary committees of the board, which people with close knowledge say were meant to justify handsome sitting and “retainer” allowances. The five committees, divided among five or six board members, are strategic communication, selection and award, risk and audit, finance, and human resources and remuneration. The NSFAF's chief human capital and corporate affairs officer, Olavi Hamwele, declined to reply saying last week that remuneration matters were confidential. He said the fund considers the taxation issue as a private matter between individual board members and Inland Revenue, and this should not be linked to the NSFAF. “The NSFAF started deducting tax at source. Prior to that, board members were provisional taxpayers. We trust that the government machinery will handle such matters,” Hamwele added. He did not explain why the right taxes were not deducted until recently. News about the NSFAF splashing out on board fees tax-free is only part of a larger failure at the institution, which sources there and elsewhere said the fund overpaid local universities by more than N$20 million, yet they spent more than N$15 million on an information technology system that should have detected this anomaly. The NSFAF has over the months denied that the system was faulty, although unhappy student fund managers wrote to higher education minister Itah Kandjii-Murangi, public enterprise minister Leon Jooste and the board in June this year, complaining about the CIDE-LGAMIS system. “It is not enabling us to perform our tasks efficiently. The award process is not completed as yet due to system-related challenges,” a letter seen by The Namibian said. The group said everything about the system is remotely done in Tunisia, where the system was designed. In fact, “We rely on developers who are miles away in Tunisia to give us the simplest things, such as a solution to the uploading of information or award lists on the website,” the group said. Before buying into the Tunisian CIDE-LGAMIS system, the NSFAF used a system developed by LEX Consult, a Namibian black-owned information and communications company. “It still begs the question whether LEX Consult's system was terminated in good faith, or whether it was really worse than what we have now,” the managers noted. The NSFAF is believed to have paid for at least three different systems to do the same job in a space of two years. Another concern by the managers is the construction of the NSFAF head office, which was awarded to China Jiangxi International, who teamed up with a Namibian company, Homefin Properties. That contract is worth over N$178 million. “We are still in the dark as to how the process that led to NSFAF's building procurement was handled,” the managers said. According to them, the tender was advertised for two days, without any reference to the NSFAF in the advert. The managers thus asked the ministers and the board to investigate their concerns ranging from a climate audit at the parastatal, flawed tenders, the systems audit for loans and grants, and to analyse the impact of the recovery process. Hamwele told The Namibian that the complaints about failed systems “is not correct and grossly misleading” because no record exists in the NSFAF that there are staff members who do not know how to use the system. On overpaying N$20 million to tertiary institutions, Hamwele said the organisation has been operating in an environment with high volumes of records. “This kind of business operation is prone to underpayment or overpayment. When routine and scheduled reconciliation are done, overpayment or under-payment is detected, and remedial action is always taken promptly,” he added. Hamwele said the NSFAF collected about N$29 million in the last five years from students who benefited from the fund. The Namibian understands that the total amount owed to the fund by former beneficiaries stands at around N$1,2 billion but only N$400 million is recoverable because of the lack of documents. Ideally, it should collect more than N$200 million a year, according to people with knowledge of the NSFAF operations. NSFAF has been dogged by a myriad of controversies for some time with no clear indication of turning the corner.