3 January 2010

Uganda: Action Should Be Taken On NSSF Audit


Kampala — A fresh controversy has emerged at Makerere University. The university's convocation has called for the resignation of the Chancellor, Prof. Mondo Kagonyera. The convocation, an alumni body that unites former students of the university, argues that his continued stay is undermining efforts to clean up Makerere.

They were referring to Kagonyera's involvement in mismanagement of the National Social Security Fund (NSSF), where he was deputy managing director before his suspension a year ago. The Auditor General in a report submitted to Parliament last week confirmed earlier findings by the Kenyan firm KPMG but found additional irregularities, leading to the loss of billions of workers' savings.

Although most of the questionable deals were done by the MD, David Jamwa, as deputy MD Kakonyera was co-responsible. He should at least have reported to the minister that things were going wrong, particularly after an internal whistleblower exposed the scam that was going on with transactions on the stock exchange. In addition, Kakonyera awarded himself huge 226m in salary and housing advances in a manner contrary to the NSSF loan policy and financial regulations. The NSSF loan policy allows for only one salary advance per year, yet he received three in 2007.

He received housing advances that exceeded the limit of his gratuity. Furthermore, he was paid gratuity without recovery of the housing advances. The call for Kagonyera's resignation is legitimate. After the scandals that have plagued the once prestigious university, Makerere needs people at the top whose personal integrity and competence cannot be questioned.

But other, more drastic actions are needed against those who caused the loss of workers' money to save that other, equally important institution. Selling Government bonds before their maturity date might have been negligent, but selling them below the prevailing market price is criminal. Since the final NSSF audit is out, let Parliament, the Criminal Investigations Department and the DPP do their work. And let their actions be enough warning to any future NSSF managers to stop feasting on hard-earned workers' savings.

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