North Bukedi Cooperative Union (NBCU) officials tour the Kabole ginnery in Pallisa District. The embattled leadership of the NNBCU has been suspended over allegations of mismanagement of funds worth Shs8.2 billion it received from the government. PHOTO/ MUDANGHA KOLYANGHA
The leadership of the North Bukedi Cooperative Union (NBCU) has been suspended over allegations of mismanagement of funds worth Shs8.2 billion it received from the government. The decision announced by the Registrar of Cooperatives, Mr Bariyo Barigye, sent shockwaves through the cooperative delegates during a meeting held at Kabole ginnery on Thursday last week.
“The board members should step aside to pave the way for an investigation into the union’s financial records because reports point to questionable expenditures, and the alleged misallocation of funds meant for primary societies,” Mr Barigye said.
The board members include Mr Farouk Gundi (chairman), Vincent Odata (vice chairman), Mr Sam Tavuga (treasurer), Mr John Okoboi (Pallisa representative), Mr Jimmy Okwalinga, Mr Vicent Namulevu (Budaka representative), Mr Samson Nsenye (Kibuku representative), and Ms Ketty Iculet (Butebo representative). The suspension follows various petitions from the delegates, including MPs from North Bukedi Sub-region, demanding a forensic audit and investigation into the mismanagement of the Union money.
NBCU, a once–respected agricultural cooperative in eastern Uganda, has come under the spotlight over widespread mismanagement of funds for the past four years. The Shs8.2 billion was disbursed to the organisation starting in the Financial Year 2019/ 2020 as part of a government initiative to compensate Unions that lost their property during the past wars.
Monitor learnt that the Union received payments in four instalments; Shs2.4 billion in the FY 2019/2020, Shs3.2 billion in FY 2020/2021, Shs2 billion in FY 2021/2022 and Shs600 million in FY 2022/2023. The Union, which is a marketing enterprise for cotton, was established in 1953 and has a membership of 75 cooperative societies in the districts of Pallisa, Budaka, Kibuku and Butebo.
The Union has a functional ginnery at Kabole, whereas those in Iki-Iki, Kakoro, and Kibuku were sold by the old management. Mr Barigye also called for a full validation of all the 75 primary societies, saying there are reports of ghost primary societies in the Union. “All the primary societies are required to present audited books of accounts, minutes, membership subscription list and other required documents in order to ascertain whether these societies co-exist,” Mr Barigye said.
Mr Barigye also ordered Mr Gundi and Mr Tavuga to cease being signatories on the Union accounts. He tasked the secretary manager, Mr James Okoboi, to route all the financial transactions through his office. “All financial transactions should seek clearance from the registrar’s office for approval. This implies that the Ministry of Trade and Cooperatives have taken over the control of the Union,” he said.
In November last year, during President Museveni’s rally to monitor the Parish Development Model (PDM) programmes in Pallisa District, a group of stakeholders led by Mr Amissi Magona displayed a banner appealing for intervention.
The banner read: “North Bukedi Cooperative Union – His Excellency the President of Uganda, embezzlement of government war claim funds of Shs8.2 billion by corrupt Union board members and management. Please help us investigate the Union.”
After the incident, Mr Gundi suspended three delegates and their primary societies on the grounds of gross misconduct for, among others, accessing and circulating Union documents, including minutes and financial statements without authorisation and displaying banners in public and before the President.
The suspended delegates and their societies included Kamonkoli Growers Cooperative Society, headed by Mr Christopher Ketta, Nangeye Multi-Purpose Growers Society, led by Mr Magona and Lupada Growers Society, headed by Sula Mwidu.
“These primary societies have been suspended with immediate effect due to gross misconduct. These conduct and action were basically against the interest of the Union, malicious, baseless and unacceptable and also irrational, ill motivated and in bad faith and intended to ruin the integrity and good will of the Union and also to cause financial loss and erode government support to the Union,” the November 28, 2024 letter seen by Monitor read in part. The cooperative, which was established to help smallholder farmers access better markets, credit facilities and agricultural resources, has for years been a symbol of collective empowerment, but now it is embroiled in fights over alleged corruption.
However, Mr Magona said the troubling financial mismanagement within the Union’s leadership must be addressed. He said the Shs8.2 billion was meant as war compensation funds for the Union, which was ravaged by the 1987 NRA insurgency. “Farmers have not benefited at all, and yet this money was meant to support the lower primary societies which form the mother Union.
But our good friends just misused the money,” Mr Magona said. He said Mr Okoboi allocated money totalling Shs90 million to himself as his retirement package without the approval of the AGM. “He paid himself a retirement package while still serving today. This sounds funny. I sought you get a retirement package after retirement. There is no proper accountability. This is the reason we are calling upon the government to institute and carry out a forensic audit,” he said.
He said they had on numerous occasions petitioned the Commissioner of Cooperatives and other investigating organs to recover the stolen money and it be redirected to the benefiting farmers. Mr Mwidu said money collected from rent is never accounted for or declared in the books of accounts by Union leadership. He claims that Shs172 million is collected as rent but never declared. “The general accountability for these funds is never transparent. There is no major activity, but people are busy sketching how to siphon Union funds,” Mr Mwidu said.
Union responds
Mr Farouk Gundi, the NBCU Board chairman, denied any wrongdoing, claiming that the Union leadership is simply being victimised. “As Union’s top management, we strongly reject the accusations, which are baseless and politically motivated to dent the image of the Union. All the funds have been fully utilised and accounted for in accordance with the Union’s guidelines and strategic plans, with full transparency,” Mr Gundi said.
He added: “The team from Parliament, together with security agencies, have verified all the accountability, and in their report commended other unions to copy a leaf from NBCU,” he said. Mr Gundi said out of Shs8.2b, the government is yet to release Shs3.2b to the Union. “The Union had so many challenges and yet it had no other sources of income to address some of these challenges.
We had to use part of this money to clear outstanding business loans and other loans,” Mr Gundi said, adding that two-storeyed buildings are also complete. In an earlier interview, the secretary manager, Mr James Okoboi, denied the allegations and advised those not contented to get facts from the Union before they could spread falsehood.
“Our records are open, anyone who feels they are not satisfied with the accountability and value for money should move to the office rather than just making false allegations against the management, which is not good,” Mr Okoboi explained.
Mr Okoboi explained that part of the money had to offset a mortgage loan amounting to Shs700 million and a business loan of Shs461 million.
“We should separate politics from the cooperative movement. Once the two are mixed, then cooperatives are likely to collapse,”Mr Okoboi said.
