Prime
Auditors raid BoU as forensic audit starts
What you need to know:
- Background. This came after the Speaker of Parliament asked the Auditor General to disregard the Attorney General’s contrary advice and proceed to audit BoU.
Kampala.
Forensic experts from the Auditor General’s office yesterday went to Bank of Uganda (BoU) headquarters and demanded all documents relating to the controversial sale of Crane Bank and other closed commercial banks.
On Wednesday, the Speaker of Parliament, Ms Rebecca Kadaga, asked Auditor General (AG) John Muwanga to disregard the Attorney General’s contrary advice and proceed to audit BoU.
Sources close to the AG’s office told Daily Monitor that Mr Muwanga sent a team of about 15 forensic experts in ‘criminology’ and ‘accounting’ to examine BoU operations with “microscopic precision.”
The team was led by Mr James Bantu, the Director of Forensics. Sources said Mr Bantu was given “strict instructions” to look into the status of various banks at closure, cost of liquidation, assets and liabilities of the closed banks, non-performing assets, non-recoverable assets of the banks in question and the entire disposal chain.
Identifying perpetrators
In case of any fraud in the BoU operations, Mr Bantu’s team is required to identify both the perpetrators and the areas at risk of future fraud.
For fear BoU might block his team on account of the sub-judice rule since the matter is before court, Mr Muwanga on May 15 wrote to the Governor Emmanuel Tumusiime-Mutebile and notified him about the Speaker’s guidance on the matter.
“I have received the clarification from the Right Hon Speaker in a letter, ref AP116/161/01 dated May 10, 2018, and copied to you guiding me to proceed with the audit and submit the report to Parliament as required by law,” Mr Muwanga’s letter read in part.
Mr Muwanga informed Mr Mutebile that a team of auditors from his office would resume the exercise yesterday and asked the Governor to accord them the necessary cooperation.
Mr Muwanga yesterday confirmed sending a team to BoU but declined to disclose further details.
The expanded audit into BoU was prompted by petitions from Crane Bank shareholders and central bank employees regarding Shs200b allegedly sunk into the defunct commercial bank before it finally collapsed in October 2016. BoU later sold it to dfcu Bank in January last year.
Shareholder petition
They petitioned Parliament’s Committee on Commissions Statutory Authorities and State Enterprises (Cosase) chaired by Mr Abdul Katuntu and demanded an investigation into the sale of Crane Bank to dfcu Bank and the closure of other banks in the past.
Two whistleblowers also petitioned Parliament and the Inspector General of Government (IGG) on the same matter, calling for an independent audit into the sale agreement on Crane Bank between BoU and dfcu bank.
The sale agreement was signed on January 25, 2017, between Mr Mutebile and Mr Juma Kisaame, the managing director of dfcu Bank.
The audit, according to sources, will also include the disputed agreement the BoU officials signed with dfcu Bank in the sale of Crane Bank, and other issues of accountability, supervision, guidelines and policies.
In a May 15 letter to Mr Mutebile, Mr Muwanga explained why he had temporarily suspended investigations into BoU and sought the Speaker’s guidance on the matter.
AG’s clarity
Mr Muwanga said he wanted clarity after Deputy Governor Louis Kasekende wrote to Attorney General on April 19, seeking advice on whether the investigations did not contradict the August 3, 2017 ruling of the Parliament’s Deputy Speaker in regard to Crane Bank.
When contacted yesterday, the BoU director communications, Ms Charity Mugumya said: “Bank of Uganda has always been ready to be audited by the Auditor General in accordance with the law. However, we were waiting for guidance on the sub-judice rule, which has since been given by the Speaker and, therefore, we will comply with the audit.”
On April 26, Mr Katuntu wrote to the Speaker and cited Mr Muwanga’s interim report on BoU operations. Mr Katuntu informed Ms Kadaga that the interim report “raises very disturbing findings” and protested any attempt to block the forensic audit into the central bank operations.
Parliament’s queries
Quoting from the interim report submitted to Cosase on April 10, Mr Katuntu said BoU officials denied the Auditor General access to any information regarding closure of Crane Bank and the National Bank of Commerce (NBC).
He requested her to guide the AG on how to proceed with the audit in the face of BoU defiance. The Solicitor General had asked BoU not to cooperate with AG.
On Wednesday Kadaga gave the Auditor General a nod to audit BoU.
The forensic audit will, among other things, focus on the following defunct banks; Teefe Bank, Greenland Bank, International Credit Bank, National Bank of Commerce, Cooperative Bank, Global Trust Bank and Crane Bank Limited.
