Amama Mbabazi, Bigirimana 'opposed' Kazinda transfer:
The secretary to the treasury, Chris Kassami, today admitted before the Public Accounts Committee that the misappropriation of the funds meant for the Peace Recovery and Development Plan in northern Uganda originated from the Ministry of Finance and he was unable to detect it.
Appearing as the first witness before PAC, which is considering the Auditor General's special report on the allegations of financial impropriety in the office of the Prime Minister (OPM), Kassami described the scam as "conspiracy to steal."
"This was not mere corruption but a conspiracy to steal. And, indeed ever since information was unearthed about the fraud in the ministry we have taken measures to curb the financial impropriety," Kassami said.
Two weeks ago the Auditor General, John Muwanga, following an investigation into the misappropriation of PRDP funds, submitted an audit report that shows how colossal sums were diverted to other activities. This contravened the Joint Financing Agreement (JFA) signed between the government and development partners, Norway, Sweden, Denmark and Ireland.
According to that agreement, the government was to use these funds only to cover PRDP expenditures as approved by Parliament. However, the Auditor General found that Shs 6.93bn, meant for PRDP was diverted by the treasury to an OPM account in Bank of Uganda under the name National Policy on Disaster Management Account No 000030088000013.
"This diversion was effected on 27th June 2011 on the advice of Ms Mariam Kiggundu, an economist for the Aid Liaison Department. In her letter, the officer explained that the funds that had been received from Royal Danish Kingdom (DKK 5,000,000) as well as the Government of Sweden (SEK 15,000,000) were for developing a policy on disaster management," reads the Auditor General's report.
Further, Shs 11.166 billion in respect of Norwegian aid was transferred to an OPM account in Bank of Uganda after a request from the Permanent Secretary, Pius Bigirimana.
"Ordinarily, the diverted funds should have been sent to the consolidated fund and released to the districts following the appropriation by Parliament, instead, these funds were sent to a project account whose activities had ceased in 2009," the Auditor General observed, adding that this was in contravention of the JFA.
Today, PAC also met the Accountant General Gustavo Bwoch and asked him how he instructed the diversion of funds against the JFA signed with donors.
"How could you instruct the transfer yet OPM was not the implementer of the project?" Maruzi County MP, Maxwell Akora, asked.
In his reply, Bwoch blamed the PS. "The funds in question were transferred to OPM with instructions from the PS/OPM," he said before citing a January 26, 2011 letter from Bigirimana.
But the lawmakers were not done with him. "You were a signatory to the account and it is very clear that the OPM was to receive only Shs 1.9bn to monitor the PRDP. How could you go ahead to transfer all that money?" Western Youth MP, Gerard Karuhanga, asked.
The lawmakers insisted Bwoch be held accountable for failure to carry out due diligence.
"This means that you either colluded or neglected your duties," said Paul Mwiru, the PAC vice chairperson. Bwoch pleaded guilty to the charge of negligence.
Shs 14 billion fraud:
PAC also put Bwoch to task over the fraudulent transfer of Shs 14.8bn meant for PRDP to a dormant crisis management and recovery programme account owned by the OPM.
"All transfers from budget support accounts can only be effected by way of signed security papers and not by electronic transfer and require authorisation from the accountant general. How did this happen?" Akora asked.
This time Bwoch blamed his juniors. "I signed the transfer instruction because of my strong belief in the support given to the request by my staff," Bwoch said. Then he added that since the fraud was unearthed, all the staff involved had been interdicted. These include Principal Accountant Treasury Services Department, Bright Atwine, and treasury agent Amon Takwenda.
Although the lawmakers supported the actions so far taken, they insisted that Bwoch take responsibility for the mess. PAC also reprimanded the acting commissioner in charge of the Aid Liaison Department, Jennifer Muwuliza, for instructing the transfer of Shs 6bn to fund the National Disaster Policy as opposed to funding PRDP activities. But in her defence, Muwuliza told the MPs that she acted in the spirit of a letter she received from Kiggundu.
"The letter I received from her was stating that the money was meant for PRDP plans," she said.
However, the lawmakers didn't appear convinced. "The request from her [Kiggundu] was clear and since you just decided to authorise the diversion you should take responsibility because this showed that you neglected your duties or connived with the perpetrators of the misappropriation," Kalungu West MP, Joseph Ssewungu, charged.
The committee asked Kassami to interdict Muwuliza and another official, David Mugisha of the Macro Economics Department, who on December 19, 2011 generated an email to Atwine confirming that Shs 14.8bn had been sent by the Irish Government for crisis management in Karamoja.
However, Kassami replied that he is still studying Mugisha's role before taking action. "He is in Europe studying oil economics and if we find him culpable his scholarship will be cancelled and we shall interdict him," Kassami told the lawmakers.
PAC also met Bwoch in camera, whereupon he claimed that he had planned to transfer Geoffrey Kazinda, the OPM's former principal accountant, but that Bigirimana and the Prime Minister, Amama Mbabazi, had objected to his plan.
The Accountant General returns to PAC tomorrow to answer more queries about the fraudulent transfer of Shs 5bn to the crisis management account as investigations into the scam continue.