Legislators call for Muhakanizi trial over Shs114b loss

KAMPALA. The Public Accounts Committee (PAC) of Parliament has recommended an investigation and prosecution of Mr Keith Muhakanizi, the Secretary to Treasury, for allegedly causing financial loss of Shs114b.

Parliament reconvenes today after a recess to discuss the PAC report on accountability for 2014/15 financial year.
In their report to Parliament, the committee chaired by Soroti District Woman MP Angeline Osegge (FDC) observed that there were several unjustified payments from the Treasury in 2014/15 that point to collusion and forgery.
For instance, during the financial year, the Auditor General noted that Shs114b was released from the Treasury to various beneficiaries in respect of court awards and compensations.

The committee observed that a review of the consolidated financial statements indicated that only payments made in 2014/15 were captured in the accounts and that the Auditor General noted that these court awards were enforced against government over time, but were not recognised as payables at the time and showed that government had a future obligation to settle.

“The committee observed that the preparation of inaccurate accounts was a clear indication of failure to adhere to the Internationally Recognised Accounting Standards,” reads part of the report upon which a recommendation to punish Mr Muhakanizi was made.
“The PS/ST, Mr Keith Muhakanizi should be sanctioned in accordance with the Public Finance Management Act 2Ol5,” the committee recommended.

“Court awards should be recognised as payables in the financial statements,” the report added.
The committee further discovered that Shs53.4b was paid out by Ministry of Finance as court awards but there was no document to show that the Secretary to the Treasury had been instructed to pay.
The payments, according to the committee, were irregular and raised suspicion why Mr Muhakanizi paid this particular court award among other awards without supporting instructions from the court.

The MPs also observed that there is a risk of making a double payment (by Ministry of Finance and Ministry of Justice) and occasioning further loss to the government.
The committee recommended further investigations into these payments with a view for criminal prosecution against Mr Muhakanizi.
“The IGG (Inspector General of Government) should investigate the irregularities in mandamus payments with a view to prosecute the PS/ST [Muhakanizi],” the committee stated.
The report also recommended the Attorney General to be held liable for poor management of court cases and that the Ministry of Finance should make adequate provisions in the budget to promptly pay off the court awards.

The committee noted a rapid increase of court awards from Shs88b in 2013/14 financial year to Shs114 billion in 2014/15.
“This astronomical increment of court awards points to grave weaknesses in management of court cases; incompetence and connivance between the plaintiffs, defendants and the Accounting Officer,” the MPs noted in their report.

However, Mr Muhakanizi told Daily Monitor by telephone from abroad yesterday that he was unmoved by the committee’s recommendations for reprimand and criminal prosecution against him.
He said the MPs should look at the amount of interest on the court wards cases he has saved government from, rather than rush to impose sanctions on him.
“We were paying those that had agreed to give us a discount, I have saved over Shs400 billion on court cases,” Mr Muhakanizi said.

Court awards
He said the issue of payments was brought up when the Auditor General indicated that the court awards that had been paid were not eligible for payment, but added that the query has since been cleared after evidence was given to PAC.
Daily Monitor could not independently verify Mr Muhakanizi’s claim by press time.
However, he maintained that he is ready to be prosecuted if that’s the only path left for him to account.
“The Constitution and the law is that the payment is by the PS/ST, why would I have to be prosecuted for doing my work?” Mr Muhakanizi asked.

“I paid as per a directive of the then Attorney General Peter Nyombi (RIP) and Mr Mwesigwa Rukutana, who advised that there was no problem in effecting the payment,” he added.
The government is currently grappling with more than Shs676.8b in unsettled court awards and compensations.
Mr Muhakanizi acknowledged the rising indebtedness in court awards but said priority for payment is given to those who are willing to reduce their interest as a discount to government.

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