SSNIT Boss charged over $72m scandal

Former Director-General of the Social Security and National Insurance Trust (SSNIT), Ernest Thompson and three top management members of the pension fund are in trouble for their alleged roles in the failed IT project – Operational Business Suite (OBS) initiative of the Trust.

The other suspects, apart from Ernest Thompson, are former OBS project manager John Hagan Mensah and Caleb Kweku Afaglo, who was head of IT at SSNIT and claimed to be a doctorate degree holder.

A private business woman, Juliet Hassana Kramer, Chief Executive Officer (CEO) of Perfect Business Systems (PBS), which led a private consortium to win the bid to install the OBS platform, has also been charged.

The Economic and Organized Crime Office (EOCO) says the OBS system failed SSNIT.

The four are expected to face a charge of willfully causing financial loss to the state in the award of a $72 million OBS contract to a Labadi-based company – Perfect Business Systems (PBS), according to SSNIT Board Chairman, Dr Kwame Addo Kufuor.

Dr Addo Kufuor made these known at a news conference organised by SSNIT in Accra yesterday to receive an independent review and baseline assessment report on the SSNIT saga from PricewaterhouseCoopers, an international audit firm.

The report covered operations of SSNIT for the period ended 31st December, 2016 and the three-month period ending 31st March, 2017.

Michael Asiedu, lead partner in the PwC assessment, said his team did not speak to any of the indicted persons.

The PricewaterhouseCoopers report also indicted the previous board of SSNIT headed by Joshua Alabi, an NDC presidential hopeful.

“It did not appear to demand accountability when the issue of poor overspending and poor project management were brought to their attention,” the report said about the Alabi-led board.

In trying to extricate himself from the mess, Mr Alabi accused Ernest Thompson of spending $34m as additional cost on the controversial ICT contract without prior approval of the board.

EOCO

However, the SSNIT board alleged that a total amount of over $70 million was paid to PBS in respect of the OBS project.

“The original OBS contract sum was $34 million but at the time the project was completed, the contract sum had shot up to $66.8 million and GH¢36 million.

“This means that at the end of the OBS project, an additional amount of $32 million and $36 million was paid to PBS.

“Five suspects were arrested… However, four of them have been cautioned. These include Ernest Thompson, Mrs Juliet Hassana Kramer, John Hagan Mensah and Caleb Kweku Afaglo,” he indicated.

Public Outrage

Last September, there was public outrage when it emerged that SSNIT spent about $72 million on the OBS project and in spite of the huge amount, the system could not operate as expected.

In what was said to be a clear case of conflict of interest, it emerged that the head of the troubled OBS was allegedly in a relationship with the vendor whose company was contracted to install the OBS software.

The man, however, denied the allegation.

Bidding Cost

The contract had been awarded to Perfect Business System/Silver Lake Consortium, whose CEO is Juliet Kramer, in 2011 during the Mills/Mahama-led National Democratic Congress (NDC) administration at an initial bidding cost of $27,610,791 but by 2016 the total cost had ballooned to $66 million and later $72 million.

The company was one of the highest bidders and SSNIT settled on it, ignoring lower bidders with potential value for money.

SSNIT sometimes resorts to manual registration instead of electronic because of inadequacy of the OBS system.

Last Gap Payments

According to the source, on December 9, last year, Mr Ernest Thompson allegedly ordered the payment of $9 million to Perfect Business Systems after the NDC had lost the elections in 2016 and was on its way out of power.

SSNIT allegedly agreed to pay $4 per card that was to be issued to pensioners in the contract but the amount increased miraculously to $7 per card and the Trust ended up paying the private company $7.1 million for one million cards.

According to sources, the whole project was not based on SSNIT’s requirement and that the vendor reportedly came in with an already-prepared provident fund system in order to modify it for SSNIT – which runs social security.

Fund Modification

The provident fund modification was reportedly not SSNIT’s idea, but the decision of the project manager and the private firm.

The sources said when SSNIT requested for thumb print devices that could scan all the 10 fingers at once, the vendor provided single finger devices and therefore, a contributor registering needed to put the fingers on the device one at a time, thereby wasting productive hours.

“When staff complained, it was never provided. Meanwhile, SSNIT paid for the 10 devices at a whopping cost,” a source revealed.

Batch System

The source said the vendor could not provide the OBS software but rather brought a batch system where a client could only see his/her data reflecting after a day.

There were several outstanding issues according to the source, that needed to be sorted out regarding the OBS project; and anytime the company was asked to correct a defect, it allegedly asked SSNIT to pay hefty bills.

The source said SSNIT caused the transfer of the well-qualified staff, who had deep insight into the OBS project, and brought in the Director-General’s alleged lackeys, including the head of IT, Caleb K. Afaglo, who was sacked for allegedly using fake degree certificates.

Inflated Cost

It turned out that SSNIT paid a whopping $500,000 for a product that costs $16,000 on the world market under the OBS project.

Legal Objection

It was reported that SSNIT’s Senior Corporate Law Officer, Jaezel Orleans-Lindsay, wrote to warn the Trust’s management against certain aspect of the contract that was being exploited by the private company.

“What it means is that SSNIT will have to pay the annual SLA fee of $2,000,000. Immediately upon signing the agreement (to cover for September 2104 to September 2015) and pay another $2,000,000 in September this year, when in effect it would have just received 9 months of service under the SLA instead of the contractual 2 years. This is objectionable!” the lawyer said in a letter to his bosses on January 16, 2016.