OPM: Janet free, queries for Mbabazi

Wednesday June 12 2013

By Yasiin Mugerwa

Prime Minister Amama Mbabazi could still have some questions to answer if Parliament upholds recommendations of a minority report of the Public Accounts Committee in relation to the OPM cash scam.

A four-page minority report signed by two MPs; Joseph Ssewungu (DP, Kalungu) and Ignatius Besisira (NRM, Buyaga East), which the Daily Monitor has seen, wants the Prime Minister held accountable for failing to coordinate the Peace, Recovery and Development Plan (PRDP).

However, Mr Ssewungu and Mr Besisira look lone rangers after the bulk of the committee (28 members) signed a main report, whose details were published in the Daily Monitor yesterday, clearing Mr Mbabazi. The committee also found no truth in claims that First Lady Janet Museveni had travelled to Israel nine times in one month as had been indicated in an earlier audit report.

In the minority report, Mr Ssewungu and Mr Besisira fault Mr Mbabazi on three grounds; use of PRDP money to buy a Mercedes Benz and other vehicles for ministers at OPM, blocking the transfer of Mr Geoffrey Kazinda, the indicted principal accountant, and failure in political supervision of the funds.

However, the main report indicates that Mr Mbabazi explained that the nature of the financial mismanagement that took place in his office was a case of criminality that needed to be handled as such, and regretted that it took a while to be noticed. Mr Mbabazi also said the scam also pointed to weaknesses in the financial systems within government and that a consultant had been engaged to review the systems.

Whereas the Daily Monitor could not get Mr Mbabazi to respond, Mr Pius Bigirimana, the outgoing permanent secretary, whom the main report says should be held responsible for procuring the cars, said the recommendation was unfair given that he wrote to the Finance ministry which advised him to use any money within the OPM account.

Mr Bigirimana also faulted the committee for apportioning him blame over abuse of security papers, saying Mr Kazinda smuggled the documents outside the office and some of them were kept at his home. On the recommendation that he be held responsible for negligence of duty executing his responsibilities under IFMS, Mr Bigirimana said this is rather harsh. “Officials in the Ministry of Finance had given the responsibility of approval of payments to Mr Kazinda since 2007 to 2012. From what has been unearthed this arrangement was sophisticated and only callS for a special audit to expose it.”

Asked why he authored a minority report, Mr Ssewungu yesterday said: “They wanted to force me to sign the main report but I refused. I will defend my minority report on the floor.” He added: “I don’t want to associate myself with the person who leaked my minority report to the media but I can confirm that I wrote it. I will present it on the floor and it will get support because I have evidence.”

Meanwhile, the Secretary to the Treasury, Mr Keith Muhakanizi, whom the main report says should be held responsible for causing financial loss by giving open-ended authority to OPM officials to withdraw imprest above a set limit, has said his letters were used by ‘fraudsters’ in Bank of Uganda to commit fraud and that the IGG, CID and DPP have never investigated him in connection with the scam in OPM.

“I am 100 per cent sure that what I did was the right thing and I was never involved in the scam. In any case, my letter of July 14, 2011 and other letters were very clear, I demanded and put conditions on release that every single penny must be accounted for and I gave the committee all this information,” Mr Muhakanizi said. Both reports are expected to be tabled in Parliament next week.

RECOMMENDATIONS FOR PRIME MINISTER

A. Utilisation of Funds on the different Accounts
Facts: The Crisis Management and Recovery Account was opened in July 2008 to receive funds for Programme activities funded by UNDP. Although the programme ended in 2009, the account was not closed and remained dormant for close to two years. However, between first December 2011 and 30th January 2012, Shs 20,171,476,505 was irregularly credited on the account from the PRDP Holding Account. Audit reveals that all these funds were paid out. A review of the account indicated that Shs15,509,912,881 was paid out without the approval of the Accounting officer.
Recommendations: The PS OPM be held liable for spending funds that were not appropriated to OPM.
-That the former Principal Accountant at OPM, Mr Geoffrey Kazinda be investigated to establish his role in the fraudulent transfer of Shs20.1billion and fraudulent payments amounting to Shs4.6billion.

B. Cash Withdrawals
Facts: A total of Shs3.2billion was withdrawn cash by the Cashier, Mr Isiah Oonyu, with a frequency of Shs96million or Shs100 million almost daily. Of this amount Shs1.4b was approved by the Accounting Officer and Shs1.6billion was attributed to forged signatures. In 9 times, cash totaling Shs787.1m was withdrawn on Fridays putting into question whether activities were to be undertaken over weekends and no single accountability document was presented for audit and therefore under the circumstances.
Recommendations: - that the Cashier be held responsible for gross negligence of duty and causing financial loss.
-That Mr Oonyu be investigated with a view to prosecution and recovery of the lost funds.
-That Ms Annet Namuddu, Principal Internal Auditor and Ms Alice Nangoku, the Senior Internal Auditor at OPM be referred to the appointing authority for disciplinary action for negligence of duty and be investigated for possible collusion

C. UK/UG Post Conflict Account
Facts: Shs3billion was transferred (borrowed) to the UK/UG Post Conflict Account. The transfer was initiated by Mr Kazinda and authorized by the PS. The money was processed as office imprest for the Karamoja department..
Recommendations: That the PS be held responsible for diversion of PRDP funds to cattle branding.

D. PRDP North Account
Facts: The PRDP North Account was opened in June 2010 to receive funds meant for monitoring PRDP activities. As earlier indicated Shs11.1 billion was irregularly accredited on the account from Norwegian Support to PRDP account on February 9 2011. Of the amount Shs2.5b was withdrawn by the cashier, Mr Oonyu, of which Shs1.8b was approved by the accounting officer and Shs673.5million relates to forged signatures. No accountability was availed for review. In addition Shs6.2b was transferred to Ministry of Works in May 2011 for procurement of a Ferry on Lake Bisina.
Recommendations: That the Cashier be held responsible for gross negligence of duty and causing financial loss.
-That Mr Oonyu be investigated with a view of prosecution and recovery of the lost funds.
-That the PS be held responsible for diverting PRDP money to procure a ferry on lake Bisina and to pay Farm Engineering for ploughing in Karamoja.

E. Mismanagement of Funds at OPM
Facts: The Committee observes that there was a total breakdown in both the system and the internal controls expected in an institution. The absence of cashbooks and imprest vouchers casts doubt on the irregularity and approval of expenditure. This was a failure by Internal Audit not to have noticed the anomalies. The Committee finds not only strange but also ridiculous, the explanation by Mr Oonyu, the Cashier, that he had handed over large sums of money to persons unknown to him and without acknowledgement.
Recommendations: - that the Cashier be held responsible for gross negligence of duty and causing financial loss.
-that Mr Oonyu be investigated with a view to prosecution and recovery of the lost funds
-that Ms Annet Namuddu, Principal Internal Auditor and Mas Alice Nangoko, the Senior Internal Auditor at OPM be referred to the appointing authority for disciplinary action for negligence of duty and be investigated for possible collusion.

F. Entries on IFMS
Facts: Audit established that Senior Accountant, Yahaya Kasolo. Together with Accounts Assitants, Ms Lydia Nalwanga and Ms Irene Birungi were charged with the responsibility of entering invoices on IFMS, and reported directly to the Principal Accountant. Ms Nalwanga’s insistence that all payments to suppliers were based on LPOs, invoices, delivery notes, accompanying loose minutes and contracts committee minutes contradicts the submission by the companies that received money from OPM without supplying any goods or services and who then had to return the money to Kazinda.
Recommendations: - that Mr Yahaya and Ms Nalwanga be held liable for causing financial loss of Shs16.2billion and be investigated with a view of prosecution.
- That Ms Birungi be referred to the appointing authority for caution
-that the former Principal Accountant, Mr Kazinda be investigated for his role in fraudulent transaction amounting to Shs16.2billion.

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