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Rhondor Dowlat
An internal audit into the operations at the National Insurance Board (NIB) has uncovered a scam involving the payout of close to $3 million in maternity benefits.
Four workers from the Insurance Operations Department at NIB offices in north Trinidad have been sent home with full pay pending the outcome of the investigations.
According to a source at the NIB, who agreed to speak on condition of anonymity, in mid last year, a woman visited the office of the executive director Niala Persad-Poliah, situated at NIB’s head office at Queen's Park East, Port-of-Spain, and reported that she discovered approximately $30,000 in her bank account. The woman in her report stated that upon an inquiry with her bank on the origin of the hefty sum of money, she was told that it was her maternity benefit that was paid by the NIB.
However, the woman said she was never pregnant and therefore never applied for such benefit.
On the heels of her report, an internal auditor was mandated to carry out an audit of maternity benefit payments after it was brought to the attention of the audit committee of the Board and to the Board of Directors.
Almost one year later "no action has been taken," according to NIB sources.
Employees claimed that one executive member is being "wrongly targeted" while those who are allegedly part of the scam "remain on the job." Employees are now calling on Persad-Poliah “to give the public answers.”
In an immediate response, Persad-Poliah told the Sunday Guardian that whilst this was an ongoing investigation and the NIB could not directly comment, "the NIB takes a zero-tolerance approach to fraud."
She said NIB has a robust Fraud Control Framework and "all allegations are thoroughly investigated utilising best practice methods, experience and expertise; a combination of well-trained in-house investigators, external consultants and the T&T Police Service Fraud Squad."
Persad-Poliah said she was "unaware of such an allegation" that an executive member was being targeted. She said the NIB has an efficient and effective grievance policy that "provides employees with a mechanism to expeditiously resolve issues of concern."
The maternity scam is said to be just one of other scams that have been allegedly discovered at NIB.
Last year, in the corporate communications department it was discovered that rooms were being "illegally" rented out for private functions, including weddings.
A member of the public who had paid money to host a wedding at a room at NIB’s head office reported the "illegal rental arrangement" to the office of the executive director.
"A worker resigned in the midst of this fiasco," the NIB source said.
That worker, the source added, was also fingered in another scam. It was discovered that the worker was allegedly caught tampering and inflating bids submitted for the purchase of hot cross buns to ensure a family member received the baking contract.
"The billion-dollar enterprises usually give staff complementary hot cross buns in celebration of Easter. The distribution of the sweet delicacy is in keeping with NIB decision to show respect of all religious holidays. Snacks are also distributed to staff during Divali, Eid, and Christmas," the source said.
With respect to that particular worker, Persad-Poliah confirmed that the individual is no longer with the NIB.
"Employee misconduct is subject to investigation and disciplinary process…This was an isolated incident," she said.
"Procurement is governed by a comprehensive policy with a robust checks and balances system which protects against conflict of interest. Breaches of this policy are subject to stringent disciplinary and or auditing processes."
There were also allegations that contracts were being distributed without proper procedures being followed. Sources said it was discovered that quotes were being received from ghost contractors and it was expected that quotations were to be received from three establishments.
Persad-Poliah denied any knowledge of this, but used the opportunity to reiterate NIB’s take on its procurement policy, "It is governed by a comprehensive policy with robust and rigorous tendering procedures for all procurement with various levels of oversight and controls aimed at preventing unfair or fraudulent procurement practices."
ABOUT THE NIS
•This country’s national insurance system was introduced in April 1972.
•The system is financed by contributions from employers and employees and is designed to cover employees against events of age, invalidity, death, sickness, maternity, occupational accidents, and injury.
•The number of contributors to the system in 2016 was estimated at over 516,000 people, representing 80 per cent of this country’s labour force.
•The NIS pension is currently $3,000 and there are currently 155,000 beneficiaries, including survivors.
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Last year, on May 28, in a Sunday Guardian article, Persad-Poliah appealed to citizens not to panic as she tried to allay fears following revelations, back then, that if changes are not made to this country’s national insurance system, funds will be completely depleted by 2030.
The Ninth Actuarial Review of the National Insurance System was published in June 2015.
It covered the three-year period up to June 30, 2013, and presented a projection of the financial situation of this country’s national insurance system for the next 50 years.
The actuarial reviews warned that from 2019-2020, assets will rapidly decrease and the NIS funds will be completely depleted in 2029-2030 if nothing is modified in terms of contributions or benefits.
The actuaries warned that urgent action is required to update the system and ensure it is relevant to the income security needs of the country.
They projected that the number of people at pensionable age in the country will grow to over 400,000 by 2063, up from the current figure of 200,000.
To address these issues among the recommendations made in the review is that the country’s retirement age be increased to 65 and an increase in the contributions made by citizens.
The three short-term changes recommended by the actuaries are an increase of the maximum insurable earnings (MIE) which is the band of income of an insured person that is currently insured from $12,000 to $13,600, an increase in the contribution rate from 12 per cent to 13.2 per cent (in September 2016), and a freeze in the $3,000 minimum pension. There is expected to be another increase in the contribution rate soon.
The long-term changes recommended by the actuaries are an increase in the retirement age gradually from 60 to 65 over the period 2025 to 2060, a further increase in the contribution rate to 22.8 per cent by 2061, and the implementation of a mechanism to automatically adjust system parameters namely the minimum pension, the earned pension, the MIE and the contribution rates.
Persad-Poliah had suggested in that article that the time for reform was now. If not, she added, the NIB may need to start selling off its assets to foot the bill.
The NIB’s assets up to 2012 was $22 billion.
Over the last financial period (2015-2016), the NIB collected $4.2 billion in contribution income and paid out $4.5 billion in benefits.