Amongi refuses to renew Byarugaba contract at NSSF

A latest twist in the drawn-out corruption and top management saga at the National Social Security Fund (NSSF) has emerged, with Labour minister Betty Amongi standing by her refusal to renew former managing director Richard Byarubaga’s contract.

Two weeks ago, Ms Amongi wrote to the NSSF board rejecting its November 2022 recommendation to re-appoint Mr Byarugaba, observing that he would continue to undermine her as minister responsible for supervising the Fund if allowed back at Workers’ House.

In the letter dated June 30, Ms Amongi also informed board chairperson Peter Kimbowa that her decision has been informed by findings of investigations into alleged mismanagement at NSSF, carried out by both the Inspector General of Government (IGG) and Parliament.

Her letter instructing the board to recruit a new managing director was copied to the prime minister, Attorney General and the Finance ministry, which co-supervises the Fund alongside Ms Amongi’s Gender, Labour and Social Development ministry.

“…The reports of Parliament and IGG are sufficient for us to make a decision on his employment with NSSF, and the period allowable for someone to act in a position for six months has expired, which calls on us to recruit a new MD,” the letter states. 

It adds, “Against that background, I now would like to notify you that your recommendation to me to renew Mr Richard Byarugaba’s contract as managing director has been declined.”

While the IGG’s report cleared Mr Byarugaba of some of the allegations made against him, and also acknowledged his notable performance in growing the Fund, Ms Amongi pointed out, among other reasons, that his reputation has been so damaged -- rendering him unfit for re-appointment.

The NSSF Amendment Act, 2022, grants the Minister of Gender, Labour and Social Development powers to appoint NSSF’s managing director, on the recommendation of the board.  

Mr Byarugaba was at the helm of the private sector workers’ provident fund for 12 years during which time he was credited with growing the Fund to Shs17 trillion worth of member savings. He was forced out in December 2022, following corruption allegations made against him and his senior management team. 

The Fund has for six months run without a substantive managing director. Along the way, parallel investigations by Parliament and the Inspectorate of Government have exposed suspected corrupt dealings at Workers’ House and bad blood between the minister and NSSF senior management. 
Yesterday, Ms Among was terse when approached for comment.

“I don’t do my duties through the media ... the person who gave you the letter, if you have it, should give you the comment,” she said.

Mr Kimbowa yesterday told Monitor that he had not received any formal communication from the minister, explaining that the processes to appoint the MD have been on hold since investigations started.  

In the nine-page June 30 letter, Ms Amongi refers at length to both what the IGG and Parliament’s Committee on Trade, Tourism and Industry found in respect to the allegations against Mr Byarugaba.  The letter, which is dated a day after IGG Beti Kamya’s report was released, refers to findings about Mr Byarugaba’s reported culpability in overseeing irregular payments and making costly management mistakes, resulting in huge losses to the Fund. 

The IGG’s report, however, said there was no evidence to prove any irregularities in the procurement of the multi-billion Pension Administration System (PAS) contract awarded to a company called Sybyl, among others. 

Mr Byarugaba and the other senior management were ordered by the IGG to pay Shs4.4b in reimbursement for money paid to staff who left NSSF under the voluntary early retirement programme; Shs687m paid to two board members when they retired, and Shs16m he was reportedly overpaid on two foreign trips. 

As the IGG directed a refund of the billions, which were found to have been paid out irregularly, the IGG also said it found no evidence that the former MD personally benefited from the pay-out. 

For the allegation of insubordination for which he was found at fault, the IGG recommended disciplinary action in line with the Fund policy. 

Mr Byarugaba was similarly found to have poor people skills, tended to use inappropriate language, and was high-handed in arbitrarily dismissing and paying two employees, which caused financial loss to NSSF.
Overall, the IGG concluded: “Although he made some costly management and financial decisions, they pale compared to the robust (strong and healthy) status of the Fund during his administration, which happened to be the core mandate and key performance indicator of the Funds chief executive officer”.

Ms Amongi’s letter, however, seems to express dissatisfaction with some of the Inspectorate’s recommendations. 

“After the release of the IGG report, the current public perception is that he should be prosecuted… Reading through the report, there are findings with evidence yet the recommendations are not biting. Be that as it may, the findings are satisfactory in supporting my decision of declining the renewal of his contract at this stage,” the letter states.

Speaking to the Monitor yesterday, Mr Byarugaba said he had not received information of his rejection, and declined to comment any further.

At the beginning of July, after the IGG report first became public, the former MD was upbeat when he addressed journalists, welcoming the outcome of the Inspectorate’s inquiry. 

“Six months ago, I put myself forward for my contract to be renewed, the board recommended me on the basis that I had done very well and I was eligible for re-appointment based on the NSSF Act. The situation has not changed …,” he said. 

Previous clash

Ms Amongi had, in December last year, declined to renew Mr Byarugaba’s contract when it expired, citing concerns and petitions about alleged financial impropriety and mismanagement at the Fund. A month earlier, in November, the board had recommended Mr Byarugaba be re-appointed for another five years.  She only renewed the contract of deputy MD Patrick Ayota, who has been acting as NSSF chief executive over the last six months or so.   The minister’s concerns led to the investigation by the parliamentary committee, during which inquiry Ms Amongi openly clashed with Mr Byarugaba. 

The committee later found both the minster and MD guilty of various wrongdoing, and recommended the prosecution of Mr Byarugaba, Mr Ayota and other NSSF senior managers. Ms Amongi was also told to step down as minister.  Ms Amongi has not shown any indication she will be stepping down as minister even as she noted in the letter that given the nature and length of the probes, Mr Byarugaba has emerged with a reputation no longer fit for the Fund’s brand. 

She also implied that if re-appointed, Mr Byarugaba will undermine her as supervisor, since he reportedly preferred supervision by the Ministry of Finance.  In an earlier interview, Ms Among had indicated she would wait for the report of the Auditor General before making her final decision, a position she has now abandoned. 

She says the available findings are enough to support a decision declining re-appoinment of the former MD.

“As you could have observed, during the period of investigation, he was willing to sacrifice the institution that has given him opportunities to propel his career (NSSF), the management team that supported him to build the Fund, the board members who stood by him and the minister who is his appointing authority. Because of this, his public rating has plunged, and unable to be rebuilt as an executive of the Fund,” her letter states.