MPs raise 28 grounds to disband NSSF top brass

A parliamentary select committee has recommended that Gender and Labour minister Betty Amongi resign “with immediate effect” for alleged abuse of office.

It also wants National Social Security Fund (NSSF) ex-Managing Director Richard Byarugaba alongside his deputy-turned-acting successor Patrick Ayota to be investigated with a view of possible prosecution for abuse of office, corruption and conspiracy to commit a felony.

However, Minister Amongi last night said she was going nowhere. “I will not resign. How can I resign when I unearthed the rot at NSSF and the work the committee has done confirms what I have all along been saying; that there has been mismanagement at NSSF for 10 years?” she said by telephone.

On his part, Mr Byarugaba said: “The report is not saying anything new because everything is being investigated by the Inspector General of Government (IGG). I am not working at NSSF; so, how can I step aside”?

“They are still wild [allegations] because when the IGG investigates they will find out I did not [for instance] make the loan for Uganda Clays,” Mr Byarugaba said last night, referring to a finding that providing Shs11b unsecured loan to the loss-making firm was unjustified and illegal.

That money has now ballooned with interest to Shs24b and Uganda Clays has only serviced Shs221m, leaving NSSF with limited recovery options, according to the committee.

This newspaper understands that the report of the inquiries by the Ombudsman done concurrently with the parliamentary inquest, is ready but the details remain under wraps. The contract of Mr Byarugaba, who superintended the Shs17.8 trillion pension fund for 12 years, lapsed on December 1, 2022.

A recommendation by the Fund’s Board that he be rehired for five more years ran into the wall after Minster Amongi, the appointing authority, withheld her signature on grounds that motley allegations levelled by whistleblowers against Mr Byarugaba who, like his deputy Ayota had clocked the retirement age of 60, needed to be investigated first.

The minister, however, signed up Mr Ayota as the substantive deputy managing director and designated him as acting managing director, a decision the committee questioned since impugned decisions happened under the watch of both principals.

In a raft of proposals that handed no victory but punishments to all sides in the contest over alleged mismanagement of the Fund, the committee chaired by MP Mwine Mpaka (Mbarara City South, NRM) asked the NSSF Board led by Mr Peter Kimbowa to be immediately disbanded and replaced.

Mr Mpaka’s team last month investigated claims of corporate, financial mismanagement and structural problems at the pension fund and in a presentation of its findings to Parliament last evening demanded refund - anywhere within seven to 60 days upon adoption of its report - of billions of shillings questionably paid out to staff and board members.

The inquiries were triggered by minister Amongi’s deferral of the reappointment of Mr Byarugaba as the Fund’s chief executive.

After conducting a two-week public inquiry and writing a report away from prying eyes, the committee muted chances of Mr Byarugaba’s return to office by instead recommending that he, Mr Ayota and two departmental heads step aside “with immediate effect” to pave way for their investigation and their “immediate prosecution” by the Ombudsman for provisioning Shs1.8b, ostensibly under duress, in corporate social investment.

“Their justification of succumbing to pressure to commit an illegality is no defence to criminal liability,” the committee noted in reference to the top brass, including Chief Finance Officer Stevens Mwanje and Barbra Arimi, the head of marketing and corporate affairs.

The report adds: “The committee, therefore, recommends that NSSF management that participated in initiation of Shs1.8b budget for donations much as they did not participate in the final approval; MD Richard Byarugaba, DMD Patrick Ayota, CFO Stevens H. Mwanje, Head of Marketing and Corporate Affairs Ms Barbra Arimi Teddy, should step aside with immediate effect for investigations by the office of the IGG, for offences of abuse of office, corruption and conspiracy to commit a felony with a view of immediate prosecution”.

The legislators also want the Ombudsman to inquire into the lifestyle of Mr Ayota and Fund top managers, including those in the compliance department.

“I have always said it is okay for the IGG to investigate. For me those recommendations [by the committee] have already been happening to me. The lifestyle audit was already done, maybe you ask the minister (Amongi); she is the one being asked to resign, and the new people who are being talked about,” Mr Byarugaba said.

Mr Ayota was unavailable to speak on the findings and recommendations against him, and he did not reply to short-text messages that our reporters sent on his mobile phone handset by presstime.

In a proposal certain to necessitate revision of the recently amended NSSF Act which provided for dual political oversight, the select committee wants the Fund supervision to revert to Finance ministry with Gender and Labour ministry, under which contributing members fall, retaining only the power to appoint Board members.

More to investigate

The committee members asked President Museveni to take “keen interest” to examine the conduct of minister Amongi and in a more barbed proposal noted that: “The action of the minister … in directing Shs6b to be availed to her ministry amounts to abuse of office since the minister, being the [co-] supervisor of NSSF, without any law empowering her to do so and knowing that ministry activities are financed through appropriation [by Parliament], did an act which is prejudicial to savers’ funds and the just administration of NSSF.”

Minister Amongi last night said she acted within the law, citing Section 29(3) of the NSSF Act, which provides that “the minister [of Gender and Labour] shall, upon receipt of the annual budget or any supplementary budget, approve or disapprove the budget or may approve it subject to such amendment as he or she may deem fit”.

“I made the adjustment to the budget of NSSF within the premise of the law and the justification was clear: implement the provisions in the amended law to enforce compliance and expand coverage,” she said, noting that about Shs257b potential NSSF contributions remain uncollected.

Whether or not Parliament adopts the report, the minister said she would use the findings and recommendations to prepare a paper for Cabinet consideration to inform decisions on proposed reforms.

Ms Amongi questioned by the select committee did not hold former NSSF political supervisors at Finance to account, yet most of the identified mismanagement happened under their watch.

During yesterday’s Parliament sitting, Speaker Anita Among announced that the minister and other adversely named members of the House will be given slots to make personal statements on the accusations and recommendations against them.

Mr Mpaka’s committee, among other things, recommended for different reasons the immediate termination of the services of two other top NSSF executives; Business Department head Geoffrey Sajjabi and finance chief Mwanje.

In its conclusion, the only item that preoccupied the investigators was one: dissolution of the Board.

“… the Board has failed on several occasions … to ensure that there is secure, profitable and effective financial management of the Fund for the benefit of the workers in particular and the country at large as stipulated in Section 4 of NSSF Act (general functions and duties of the Board),” they noted.

“The committee, therefore, recommends that the 12th NSSF Board be dissolved by the Minister of Gender, Labour and Social Development, Ms Betty Amongi Ongom, with immediate effect and a new Board constituted.”

In a rejoinder last night, Mr Kimbowa, who chairs the pilloried Board said he would prefer to read and internalise the report, and not rush a comment.

“I would like … to go through it, internalise it and then have an opinion. We have asked our people to go to Parliament and get [a copy] so [that] we can speak intelligently about it,” he added.

THE 28 RECOMMENDATIONS

• Gender and Labour Minister Betty Amongi resign with “immediate effect” and President Museveni “take keen interest in her conduct”.
• Dissolve NSSF Board chaired by Peter Kimbowa.
• Revert Fund supervision to Finance, which will appoint the managing director and deputy, but retain appointment of Board members with Gender and Labour minister.
• l    Ex-managing director Richard Byarugaba, his then deputy and now acting successor Patrick Ayota, Chief Finance Officer Stevens Mwanje and Marketing and Corporate Affairs head Barbra Arimi step aside and IGG investigate them for abuse of office, corruption, and conspiracy to commit a felony in relation to Shs1.8b given to line minister, board members and workers’ groups for corporate social investment.
• IGG investigates with view of prosecution ex-MD Byarugaba and five others for involvement in conceptualisation, procurement and installation of geo-mapping systems which led to Shs749m loss.
• Prosecute all NSSF Board members and staff involved in the creation of Victoria Property Development Ltd for abuse of office and causing financial loss of $2m (Shs7.2b).
• Ombudsman conducts lifestyle audits on Byarugaba, Mr Patrick Ayota and all Fund executives.
• Workers’ groups, the National Organisation of Trade Unions (Notu) and the Central Organisation of Free Trade Unions (Coftu), refund Shs806m “illegally” received from Fund or face prosecution.

  
  

• Board terminates services of Geoffrey Sajjabi, the head of Business, with “immediate effect” over nepotism claims.
• Board terminates the services of Fund’s Chief Finance Officer Stevens Mwanje appointed when not a member of the Institute of Certified Public Accountants as required by law, and the Directorate of Public Prosecution (DPP) prosecute him for working without a professional practicing certificate.
• NSSF to build houses affordable to savers since only three out of 300 Lubowa luxury units, costing between Shs800m to Shs3b, have been occupied.
• IGG investigates 13 individuals, including former Fund Deputy Managing Director Geraldine Ssali, involved in the flopped smart card project.
• Coftu recall Sam Lyomoki and Peninnah Tukamwesiga as its representatives to NSSF Board.
• Nine board members refund Shs624m pay-out to two of their colleagues, Fred Bamwesigye and Julius Bahemuka, who resigned.
• Auditor General to conduct value for money audit on Lubowa housing project, the under-construction NSSF Pension Towers (particularly the contract variation), the Fund’s land on Yusuf Lule Road and in Temangalo in Kampala and Wakiso, respectively.
• Auditor General to conduct forensic audit into transactions over the past five years on the Fund’s Shs57b suspense accounts.
• Cancel memoranda of understanding between the Fund and workers’ bodies, Notu and Coftu, on the one hand and a separate Fund MoU with ex-deputy managing director Geraldine Ssali for Shs1b payment.
• Shs610m paid in 10 percent NSSF contributions for two-dozen NSSF board members be refunded within seven working days from adoption of report.
• IGG investigate nepotism in Fund staff recruitment and deployment.
• Ombudsman conducts lifestyle audit on Fund compliance staff.
• Secure and enforce recovery of Shs24b loan to Uganda Clays.
• Amend waiver powers of Fund MD which Mr Byarugaba used to forgive Shs3b in penalties on unremitted NSSF contributions.
• Halt further investments in Lubowa Housing Estate until true land owner ascertained.
• Board desist from extravagant spending.
• Cancel write-off of Shs2.3b Fund investment in joint venture with West Nile Golf Club and prosecute ex-NSSF chief executive Leonard Mpuuma, then Board chairman Onegi Obel and former Gender minister Zoe Bakoko Bakoru.
• Recover Workers’ House building land title from Alcon and Tumusiime, Kabega & Co Advocates “with immediate effect”.
• Gender minister to independently corroborate Board nominees from Notu and Coftu, abolish contract between Fund and workers’ bodies.
• Gender minister, Board members and workers’ unions account within 90 days for Sh1.8b they received from Fund in corporate social investment allocations.