Leaked OPM report pins government officials

The committee assigns different levels of guilt to the officials named and makes varying recommendations depending on their level of responsibility in the scam, which saw money meant for post-war reconstruction in Northern Uganda and Karamoja sub-regions under the Peace, Recovery and Development Plan (PRDP) misappropriated.

The report to be discussed in Parliament next week, recommends that Mr Bwoch and Mr Mpoza be held responsible for negligence in failing to detect and stop the fraudulent transfer of Shs6.9 billion from the Royal Danish Kingdom and Sweden. The committee also wants the duo held responsible for sanctioning the transfer of the funds.

When asked yesterday, Mr Bwoch said: “I did not handle that money.” But when asked to explain the processes, said he could not comment because he had not seen the report.

The report further recommends that Mr Muhakanizi, who was Deputy Secretary to the Treasury then, be held responsible for causing financial loss by giving open-ended authority to withdraw imprest above the limit set by his former boss Chris Kassami, who has since retired. The committee recommends that CIID investigates the extent of forgery on cash withdrawals in OPM with a view of prosecution of the culprits.

Whereas Mr Muhakanizi did not respond to our calls and text messages yesterday, when he appeared before PAC in November last year, he accused OPM officials of misusing his authority, adding that his letters had nothing to do with the transactions made on the crisis management account used to divert PRDP funds.
On the alleged misuse of Shs11.6 billion from Norwegian support to PRDP, the committee recommends that Mr Bwoch and Mr Bigirimana be held responsible for the diversion of funds. The committee recommends that the PS be held responsible for spending funds that were not appropriated to OPM.

But Mr Bigirimana yesterday refused to take responsibility, saying he was the one who unearthed the scam. “I cannot be held responsible for diversion of PRDP money; the one responsible is the Accountant General who is the ‘priest’ of government accounts. I wrote to him requesting for funds under emergency humanitarian assistance programme and he released the money,” Mr Bigirimana said.

“I am not an angel to know that Mr Bwoch had diverted the money from PDRP. In any case, I did not force him to release the money, he knew what he was doing and as user, I would not know the source of the money. As I have indicated before, my signatures were forged and instead of confirming with me, the people at Bank of Uganda and Treasury were busy calling Kazinda. They hooked Kazinda on IFMs system and went ahead to approve fraudulent transactions behind my back. Treasury was the epicenter of the scam and not Prime Minister’s Office.”

At least Shs50 billion meant for the PRDP is believed to have been stolen in the scam, which has forced five donor nations as well as the European Union and the World Bank to suspend 93 per cent of budget support to Uganda. The donors have also put stringent conditions on government to stop further abuses.
In November last year, the EU ambassador to Uganda announced yesterday that the EU, United Kingdom, the World Bank, Austria and other countries had suspended up to $300 million promised in budget support each year, up to 2013.

Minority report
Meanwhile, two MPs have written a minority report on the scam. Although the main report which is signed by 28 MPs does not implicate any politician, the minority report wants Prime Minister Amama Mbabazi held responsible for taking a car bought using PRDP funds.

The two argue that the Prime Minister should have been aware about the source of Shs1.818 used to buy cars for him and other ministers at OPM. Still on the political front, the committee noted in its report that there was no evidence in the Auditor General’s findings that First Lady Janet Museveni had travelled to Israel nine times in one month. However, they did indicate that OPM advanced Mr Boniface Obbo (deceased), the cashier at OPM a total of Shs125.9m for her alleged travels.

While the committee has largely asked that Mr Kazinda’s role in the scam be investigated, it indicated that failing to meet the interdicted principal accountant made it hard to make definitive recommendations.
Mr Kazinda, who is before the Anti-Corruption, allegedly forged Mr Bigirimana’s signatures to withdraw millions of shillings from government coffers. He is also accused of making a document without authority and unlawful possession of government stores. A judge will this week make known his fate after court assessors proposed that he be released.

Tomorrow: Find out details of what the MPS found out specifically about operations in OPM and their recommendations.
Also: two MPS wrote a minority report, find out details in tomorrow’s Monitor

The scandal: How it all began

In October 2012, Sweden and Ireland suspended project support aid to Uganda over alleged corruption in the OPM and sent a team to investigate the matter. The move followed a draft report by Auditor General John Muwanga (right) which found that at least Shs50 billion in aid from Ireland, Norway, Sweden and Denmark had been misused. The Auditor General’s inquiry was prompted by investigations by this newspaper, which broke the story of the graft in the OPM.

The Public Accounts Committee of Parliament is currently investigating the matter based on the findings in the Auditor General’s report. A separate investigation by the Criminal Investigations and Intelligence Directorate of police is also underway.

Donors’ conditions
Payment and recovery of all the misappropriated funds in OPM; interdiction of all public officials involved in the fraud and rotate accounts staff; seek legal remedy and freeze assets for individuals named in the scam; facilitate CID, DPP and Auditor General’s Office to stop another scam.

Others are: fully constitute the Office of the IGG by appointing all the required deputies under the IGG Act, clean up the Integrated Financial Management System, strengthen systems in Bank of Uganda and audit the payroll to weed out ghosts.

Findings and recommendations

1. RECOMMENDATIONS FOR MINISTRY OF FINANCE
a. Diversion of donor funds from PRDP Basket Account
Facts: of Shs39,319,399,151 contributed by donors (Ireland, Sweden & Denmark) for PRDP, only Shs10,161,775,000 was transferred to Consolidated Account for PRDP activities. Recommendations:
Ms Mariam Kiggundu, an economist at Ministry of Finance, Mr David Mugisha, a senior economist at Finance and Ms Jennifer Muwuliza, the commissioner aid liaison, be held responsible for initiating fraudulent transfers of funds from PRDP holding accounts to project accounts in OPM. The trio be prosecuted.
- Commissioner Treasury Services be held responsible for sanctioning the transfer of said funds based on irregular request.
- Accountant General and Commissioner Treasury Services be held responsible for negligence in failing to detect and stop the fraud.

b) Fraudulent transfer of Shs20.171b to crisis management recovery programme
Recommendations:
- Ms Bright Atwine of Treasury Services Department, Mr David Mugisha, a senior economist and Mr Amon Takwenda (a treasury agent but now deceased) be held responsible for uttering false documents to cover up fraud. Ms Atwine and Mr Mugisha be referred to appointing authority for disciplinary action
- Mr Wilbert Okello, a principal systems analyst, Mr Tony Yawe, an IT officer at Treasury, Mr David Mugisha and Mr Charles Mwasa, of the Financial Services Department, be held responsible for fraudulent transfer of Shs5.2b on January 30, 2012 and be referred to appointing authority for disciplinary action and prosecution.
- Mr Wilbert Okello, Mr David Mugisha and Mr Charles Mwasa be held responsible for fraudulent transfer of Shs14.8b. They be referred to appointing authority for disciplinary action and also prosecution.
- Mr Gustavio Bwoch, the Accountant General and Mr Isaac Mpoza, the commissioner TSD, be held responsible for transferring funds from holding account to project accounts in contravention of the JFA that they were privy to. The duo be referred to appointing authority for disciplinary action.

c) Diversion of Shs11.166b from Norwegian support to PRDP Account
Recommendations:
Mr Gustavio Bwoch (AG) and Mr Pius Bigirimana (OPM PS) be held responsible for diversion of Norwegian Support to PRDP North Account at OPM

d) Internal Control Weaknesses at Treasury
Recommendations:
- Accountant General be held responsible for failing to ensure an effective internal audit function at Finance ministry.
- Internal audit function in government be strengthened by separating its mandate and reporting structure from the Finance ministry.

e) Irregular allocation of responsibilities
Recommendations:
- Mr Lubega be held responsible for fraudulently assigning access privileges to Mr Kazinda. He should be prosecuted.
- Mr Bigirimana be held responsible for negligence of duty in executing responsibilities under IFMS.
- Finance ministry should ensure accounting officers are fully competent in operating IFMS.
- Mr Kazinda be investigated for causing financial loss of Shs16.

f) Negation and Internal Audit function
Facts: When Mr Shaban Wejula was transferred to OPM as principal internal auditor, he was isolated and treated as a stranger except by the PS Bigirimana. It took intervention of PS through a memo to compel staff to cooperate with Mr Wejula.
Recommendations:
- Internal audit function in government be restructured with view to rationalizing its reporting responsibility without negating functional complementarity to management.
- Government should urgently establish and operationalize audit committees in each MDA

2. RECOMMENDATIONS FOR BANK OF UGANDA
a) Non-confirmation of payments by Bank of Uganda
Recommendations:
- Bank of Uganda must comply with their guidelines with regard to confirmation of payments. Bank of Uganda and Finance should set a threshold above which confirmation must be made with principal signatory.

b) Signature Verification
Recommendation: Disciplinary measures be taken against BoU officials involved. CIID should investigate possible collusion with view to prosecution.

c) Cash withdrawals
Recommendations:
- Deputy Secretary to the Treasury be held responsible for causing financial loss by giving open ended authority to withdraw imprest above limit.
- CIID investigate extent of forgery on cash withdrawals in OPM with view to prosecution.

d) Non-confirmation of EFT files
Recommendations:
Bank of Uganda be held responsible for causing financial loss by failing to execute terms of MoU meant to safeguard electronic transfers.

e) Failure to close dormant accounts
Recommendations:
Finance Ministry should review its MoU with BoU with view to rationalizing number of accounts operated and reducing period within which a dormant account must be closed. The MoU should provide penalties in case of breach by the Bank.
- BoU must adhere to terms of closing dormant accounts

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