ASCE and BADF Audit: Nearly 17 Billion FCFA in Unrepaid Loans in Burkina

The ASCE-LC audit in Burkina Faso revealed major deficiencies in areas of activity such as governance, asset management, as well as accounting and financial management, during its audit of the CNSS and the BADF.

Thus, at the end of the audits, the ASCE-LC noted at the CNSS level, nearly 17 billion CFA francs in unrepaid loans, granted to public structures. Concerning the BADF, there are 978,000,000 CFA francs in bonuses and gratuities granted irregularly and without legal basis to staff.

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ASCE audit of CNSS

The audit of the management of the CNSS concerns the period from January 1st, 2019 to May 25th, 2022.

In terms of governance, the ASCE-LC notes the non-compliance with the convergence ratios of the Inter-African Conference on Social Security ( CIPRES), by branch of activity. “Intimately linked to the object and very essence of the CNSS, these non-compliant ratios are noted each year without substantial and sustained action to bring them into compliance,” she said.

Absence of a computerization policy

Also, the Higher State Control Authority notes the non-operationality of the technical inspection of services due to lack of staff. She also mentions the absence of a procedures manual validated by the board of directors. Added to this is the absence of an adequate computerization and information management policy. And this, despite colossal funding totaling nearly 1.6 billion CFA francs. “There is an absence of biometrics, digitalization of operations and the possibility of instant production of accounting,” specifies the ASCE-LC.

Concerning asset management, the audit report raises, among other things, an incompatibility of tasks in inventory management within the regional directorates of Ouagadougou and Bobo-Dioulasso. He points out that the head of the procurement department is also the inventory manager, which is abnormal.
In addition, a lack of proof of execution of maintenance services for administrative buildings is highlighted.

Around 17 billion FCFA to repay

In terms of accounting and financial management, the report observes an absence of formalized cash management policy. This therefore does not allow the social security institution to ensure optimal management of its cash flow with regard to the missions assigned to it.

Faced with this failure, the ASCE-LC recorded 16,845,260,351 CFA francs in unrepaid loans, granted to public structures, to which are added medical evacuations authorized by the general director of the CNSS, which are not justified. These medical evacuations for the benefit of CNSS employees cost 446,168,955 CFA francs, according to the Higher State Control Authority.

BADF audit

As for the audit of the management of the BADF, it concerned the financial years 2020, 2021 and the period from January to May 2022. In terms of governance, the ASCE-LC noted irregularities in recruitment .

Nepotism

It was observed, in fact, that certain directors of the bank recruited their close relatives there. While this practice is in violation of the provisions of article 39 of Circular No. 01-2017/CB/C of September 27, 2017 relating to the governance of credit institutions and financial companies of the WAMU.

In addition to this, the report indicates the granting of credits to certain directors under irregular conditions, not having been submitted to the board of directors. It is indicated in fact that out of four loans granted to administrators, three violated the provisions of article 26 of the UMOA circular relating to risk management in credit establishments and financial companies.

Around one billion FCFA in bonuses granted without legal basis

The ASCE-LC goes further by explaining that the general director and his deputy are among the people rooted in this bad practice. She confides that some of these loans were even granted without a credit agreement, estimated at more than 180,000,000 CFA francs.

In addition, the Higher State Control Authority discloses that bonuses and bonuses were irregularly granted and without legal basis during the period from May 2018 to May 2022. According to the Control Authority, the BADF paid its staff , motivation and encouragement bonuses, seniority bonuses, thirteenth and fourteenth month bonuses, for a total amount of 978,299,892 CFA francs.

Regarding “business providers”, the ASCE-LC defines them in its report as being any person bringing sums of money in order to place them with the BADF for a more or less long period, with a view to allowing the bank to build and consolidate its financial structure. And these people are then supposed to be paid by the bank on the basis of a contract following a scale.
However, the ASCE-LC points out that five people called “business providers” benefited from 378,000,000 CFA francs, even though they contributed absolutely nothing to the BADF.

In view of the serious shortcomings revealed by the audit mission, the ASCE-LC took legal action. Indeed, the question of “business providers” was the subject of a judicial investigation and the results were transmitted to the courts.

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(Featured image by Towfiqu barbhuiya via Unsplash)

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First published in le faso.net. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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