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Nine Finance officials held over Shs50b BoU digital heist
Bank of Uganda headquarters in Kampala. PHOTO/ FILE
What you need to know:
- The money was lost when officials with top-level clearance manipulated the government’s digital payment system, altered debt repayment invoices, and rerouted funds meant for the World Bank and African Development Bank to private company accounts in Japan and London.
Nine senior Ministry of Finance officials, including the Accountant General, Mr Lawrence Semakula, were on February 4 summoned and detained by Police’s Criminal Investigations Directorate (CID) in connection with a heist in which Shs53 billion was spirited away from Bank of Uganda.
According to police, other officials include the acting director of Treasury Services and Asset Management, Ms Jennifer Muhuruzi, Mr Mubarak Nansaba, the commissioner Treasury Service Department; Ms Judith Ashaba, an accountant, and Ms Deborah Dorothy Kusiima, a senior accountant in the Treasury Services Department,.
Others are Mr Tonny Yawe, a senior IT officer; Mr Paul Lumala, a systems IT officer; Mark Kasiiku, an IT specialist, and one Bephar Nayebare, all attached to the Department of Management Information Systems. By press time last evening, they were being detained at Kira division police and Nateete police stations, respectively.
They were held to help with investigations after the Auditor General and Financial Intelligence Authority (FIA) probe apportioned responsibility of how payments systems were manipulated on the Ministry of Finance side, leading to BoU remitting money to the wrong payees.
The Ministry of Finance Permanent Secretary, Mr Ramathan Ggoobi, in a statement last evening confirmed the arrest of some of his staff, which he said will not affect work. “The ministry has provided the investigating authorities full support and ensured that the concerned officers fully cooperate as required,” Mr Ggoobi wrote, adding: “We wish to assure everyone concerned that all our services, including those provided by the Accountant General’s office are operating normally.
Background
Daily Monitor lifted the lid on the white collar crime last year in November, and that President Museveni had directed CID, with involvement of counter intelligence sleuths from the Defence Intelligence and Security (DIS), formerly Chieftaincy of Military Intelligence (CMI), and the Auditor Generals office, to inquire into the matter. In the scheme, both the BoU sanctioned information systems audit by the consultancy, PwC and the Auditor General’s probe, apportioned culpability to the Accountant General’s office and Treasury Department in the Ministry of Finance. The Accountant General’s office is responsible for budget execution and accountability, including procurement, fund releases, payments, financial reporting, and overall financial oversight. The back-to-back audits documented that officials with top-level clearance fiddled with the government’s digital cash transaction portal, the Integrated Facility Management System (IFMS), and changed the invoice particulars for debt repayment. In this case, $6.134m (Shs22.3b) meant for payment on September 10 to the World Bank’s International Development Association (IDA), which extends confessional credit line to the world’s poorest countries, was rerouted to a bank account of a private company, Roadway Company Ltd in Tokyo, Japan. Similarly, $8,596,824 (Shs31.2b) meant to be wired to the African Development Bank’s African Development Fund (AFD) was on September 26 instead rerouted to a bank account in London for a private company, MJS International. Customarily, the Treasury Service Department in the ministry generates a debt repayment invoice within the IFMS. The invoice particulars such as payee and amount are picked from the Debt Management and Financial Analysis System (DMFAS) which is used to track external debt payments.
The probe findings indicate that payment invoices were created, reviewed, approved, and fed into the IFMS. En route, an officer[s] with top level clearance intercepted the files, manipulated them and relayed them to BoU. The same officers intercepted confirmation of payment receipts from BoU to the ministry to reflect payees as had been created and approved. Deputy Governor Michael Atingi-Ego, commenting on the matter for the first time on December 5, put responsibility far away from his doorsteps, saying “these fraud incidents were initiated outside the BoU IT systems to divert the funds.”
“BoU is a paying entity. You get instructions to pay, and we pay as instructed. So let me repeat: the fraud incidents were initiated outside the BoU IT systems, and instructions were received by the BoU to pay the wrong beneficiaries, leading to the subsequent diversion of the funds. Now, where the diversion took place, how, and who were involved is a subject matter of the ongoing investigation for which I cannot comment,” Dr Atingi-Ego said.
Monitor, however, understands that some BoU officials have since recorded statements at CID as part of the ongoing probe.
Sources indicated that the probe has widened to earlier incidents of hacking the BoU systems and money spirited away and then refunded—which, officials indicated, is another form of laundering money. BoU wrote to CID in late December detailing that the corresponding bank in London has since wired back $8.205m (Shs22.9b), less by $390,000 (Shs1.42b), of the original sum wired to MJS International.
On the other hand, BoU has so far been unsuccessful in getting back the funds wired in Tokyo, and likely won’t, according to people familiar with the matter.
