UPPC bosses in alleged Shs2.3b fraud

Minister says since he came to office, there have been infightings at the government printer between the board and management staff, resulting in one of the managers throwing in the towel.

Kampala

Auditors from State House have recommended that top bosses at the Uganda Printing and Publishing Corporation (UPPC) be sacked over an alleged misappropriation of Shs2.3 billion in a damning dossier sent to the President.

The audit followed a petition to President Museveni by Mr Henry Sseremba, the former marketing and sales manager at UPPC, last year. He also presented a financial report to the board of directors that implicated the acting managing director, Mr Levi Malinzi, in financial indiscipline.

Mr Sseremba alleged that about Shs2.3 billion and another Shs25 million was unaccounted for under the supervision of Mr Malinzi who is also the financial manager at the government printer. Presidency minister Frank Tumwebaze told the Saturday Monitor that on receiving the petition, he instituted an investigation into the matter.

“I found a lot of confusion there [at UPPC] and fights between the board and management staff. I instituted a management audit and it recommended among others an overhaul of the organisation and the appointment of the new board,” Mr Tumwebaze said on Thursday. “The term of the current board has as well expired. We are in the process of constituting a new board,” he added.

In a September 20 letter, Mr Sseremba wrote: “I hereby petition, your Excellency, and ask for your immediate and urgent intervention into the financial irregularities and diffuse the current state of anarchy that is in existence at the Corporation.”

“Following the departure of the previous managing director [Elizabeth Bakaawa Sekabembe], Mr Levi Malinzi (who is currently holding the portfolio of the finance manager) engaged in several acts of financial impropriety that occasioned this government entity to lose so much money,” the petition read.

Mr Sseremba claimed that Shs450 million was withdrawn from the UPPC Stanbic Account No. 0140020379301 between February 1, 2011 and February 10 the same year. Between June 24, 2011 and June 30, 2011, about Shs638m was withdrawn from the same account.

He also points that more funds amounting to Shs455 million were withdrawn between June 13, 2012 and July 17, 2012 in different installments. The financial report by Mr Sseremba to the board – that is attached to the petition to the President – quotes a total sum of Shs2.3b withdrawn from the company coffers between February 1, 2011 and July 17, 2012.

Officials arrested, released
Our investigations reveal that the Special Investigations Unit (SIU) picked interest in the case and arrested Mr Malinzi, together with the chairperson of the board, Mr Stephen Bandutsya, last year. They were later released on bond. After securing their release, the two top bosses then hired private auditors who went ahead to clear them of any wrongdoing.

A draft report of the forensic audit dated October 31, 2012, by Oakland Partners, indicates that “the funds alleged to have been misappropriated were actually made in the best interests of the Corporation”. “The allegations [by Mr Sseremba] are not correct. They are malicious and misleading and cast doubt on the professionalism and ethical principles of the report bearers. All transactions have been verified as correct and benefiting the Corporation,” the draft signed by Mr Lawrence Tumusiime, a managing partner at Oakland Partners, notes.

But this newspaper has since discovered that the above auditors were allegedly hired in disregard of the Public Procurement and Disposal Act, despite warning by the UPPC board secretary, Ms Juliet Bibangambah, who is also the Corporation legal manager.

“A letter appointing them [auditors] was signed by the acting managing director. This is a very fundamental flaw as it taints their independence since he is mentioned specifically in the sales and marketing manager’s report and would bring into issue conflict of interest if the person who is signing your appointments letter is the one you are investigating,” Ms Bibangambah wrote on October 29, 2012 also copied to the acting managing director, Mr Malinzi.

Ms Bibangambah also questioned the integrity of Oakland Partners. But Mr Tumusiime of Oakland Partners stood his grounds saying, “My facts are there. But those guys have their own internal conflicts. Whether they did not follow the right procedure to appoint me, it’s none of my business.”

Malinzi defends private auditors
Mr Malinzi also defended the process through which the auditors were hired. “What Ms Bibangambah was calling advising was misadvising. The chairman of the finance committee came up with three names of auditors and recommended Oakland. Even auditors assigned from the Auditor General’s Office, we sign engagement letters for them,” Mr Malinzi said.