21 January 2013

Uganda: Donor Funds Have Been Accounted For


There has been a lot of misinformation fed to the public by the media, to the effect that over Shs 50bn of donor funds which was meant for the people of Northern Uganda under the Peace Recovery and Development Plan (PRDP) was misappropriated.

It is my duty to set the record straight: the forensic audit conducted by the Auditor General, on request by the Permanent Secretary in the Office of the Prime Minister (OPM), established that out of this amount, about Shs 38bn was the donor component of the funds released by the ministry of Finance, Planning and Economic Development (MoFPED).

The rest of the funds, about Shs 16.22bn, although part of the entire amount that is subject of the ongoing investigations of fraud under OPM, were Government of Uganda funds committed to several other programmes under the OPM. I am glad to report that all the funds remitted by the World Bank and DFID for Northern Uganda Social Action Fund (Nusaf) 2 activities in Northern Uganda and Karamoja, totalling Shs 123.5bn, were disbursed to the districts and communities and their accountability stands at 95%. Therefore, no funds of Nusaf 2 were involved in this scam whatsoever.

I wish to reassure the people of Northern Uganda in particular, and the entire Ugandan public in general, of the government's unwavering commitment to ensuring that the region is fully pacified and takes off on the path of development. I should also clarify on some of the information that seems to have been distorted by the media that may, as a result, have created concern among the people.

It is true that Norway, Ireland, Sweden and Denmark agreed to support the PRDP through a basket fund managed by MoFPED. At the time of the audit, Shs 75.78bn had been contributed by the donors, out of which Shs 38.3bn was disbursed to OPM under separate arrangements as explained hereunder:

• During the financial year 2010/11, Shs 11.16bn was requisitioned by the accounting officer as part of a continuous effort to support the activities that had remained unfinished under the Emergency Humanitarian Action Plan (EHAP). This intervention was being monitored under a Joint Monitoring committee that included both the government and donors. Out of these funds, Shs 6.2bn was sent to the ministry of Works and Transport (MoWT) to finalise the implementation of the delegated procurement and construction of ferries on lakes Kyoga and Bisina.

The rest of the funds were spent on food and other non-food relief items for disaster- stricken communities as well as other development activities. Out of these funds, Shs 769.5m is questioned by the Auditor General as having been spent on unjustified expenditures together with another 6.95bn that was deposited on the National Policy on Disaster Management Account by MoFPED without the knowledge of the accounting officer.

• In FY 2011/12, Shs 20.17bn was deposited by the Accountant General on the dormant Crisis Management account, once again without prior knowledge of the accounting officer, but instead with full knowledge of the then principal accountant (Mr Geoffrey Kazinda). Out of this amount, and on Kazinda's advice, 13.77bn was released, whose utilization the accounting officer duly authorized with the assurance that it was released by MoFPED in response to an earlier request he had made for funds to facilitate a number of activities, including the procurement of vehicles for newly appointed government ministers. The total amount of allegedly misappropriated funds from the entire donor component (38.3bn) that is attributed to Kazinda alone by the forensic audit report is Shs 13.4bn.

• It is true that within the total 50bn,whose utilization and accountability was and still is a matter of investigation by the Auditor General and now CIID, are government of Uganda funds to the tune of 16.22bn. The government has acknowledged responsibility for the loss of funds which was orchestrated by officials of the government. We note that the fund flow in the financing agreement signed with the donors required funds to be remitted to the Consolidated Fund account from the different donors.

However, these funds were diverted before reaching the consolidated fund by a racket consisting of the OPM principal accountant and some officials in the ministry of Finance and Bank of Uganda. Notwithstanding the undertaking made by the government to refund the misappropriated donor funds, the culprits are being investigated and will be prosecuted in courts of law and punished accordingly, including recovery of lost funds from their assets.

This is to assure the public and the people of Northern Uganda that the implementation of PRDP will continue as earlier planned, with the biggest proportion of the money continuing to be disbursed directly to the districts and sectors and OPM only retaining a minimal percentage to undertake coordination, monitoring and evaluation.

The author is permanent secretary in the Office of the Prime Minister.

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