11 February 2013

Uganda: Use of Funds in OPM Explained


There has been a lot of misinformation fed to the Ugandan public by the media to the effect that over UGX 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 clear that the Forensic Audit that was conducted by the Auditor General on request by the Permanent Secretary Office of the Prime Minister (OPM) established that out of this amount, about UGX 38billion was the donor component of the funds released by the Ministry of Finance, Planning and Economic Development (MoFPED).

The rest of the funds, to the tune of UGX 16.22bn, although part of the entire amount that is a subject of the on-going 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 NUSAF2 activities in Northern Uganda and Karamoja totaling UGX. 123.5bn were disbursed to districts and communities and their accountability stands at 95%. Therefore, no funds of NUSAF2 were involved in this scam, whatsoever.


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

It is true that four countries namely Norway, Ireland, Sweden and Denmark agreed to support the PRDP through a basket fund (of pooled resources to support the budget) managed by MoFPED. At the time of the Audit, Uganda Shillings (UGX) 75,777,092,394 had been contributed to the PRDP basket by the Donors, out of which UGX 38,291,127,963was disbursed to OPM under separate arrangements as explained hereunder:

a. During the financial year 2010/11, UGX 11,166,123,879 was requisitioned by the Accounting Officer as part of a continuouseffort 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 Government and the Donors. Out of these funds, UGX 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 Lake Kyoga and Lake Bisina. These ferries, whose procurement had commenced during the EHAP, were considered vital in efforts geared towards addressing the persistent transport challenges in the Northern region, whose transport infrastructure had broken down due to insurgency. 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 whose outputs arelisted later in this presentation. Out of these funds, UGX. 769.5m is questioned by the Auditor General as having been spent on unjustified expenditures together with another UGX. 6,953,527,579 that was deposited on the National Policy on Disaster Management Account by MoFPED without the knowledge of the Accounting Officer.

b. In the Financial Year 2011/12, UGX 20,171,476,505 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 Mr. Kazinda's advice,is UGX 13.77bn 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 of the PRDP funds (of UGX. 38.3bn) that is attributed to Mr. Kazinda alone by the Forensic Audit report is UGX. 13.4bn. As mentioned earlier, this is also still a matter under investigation by the appropriate arms of government.

c. It is true that within the total UGX. 50bn,whose utilization and accountability was and still is a matter of investigation by the Auditor General and now CIID, includes Government of Uganda funds to the tune of UGX. 16.22bn. Investigations that are currently underway will enable us to concludethat these funds are lost or misappropriated since accountabilities are still being examined.


The Government of Uganda has acknowledged responsibility for the loss of funds which was orchestrated by officials of 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 Principal Accountant OPM and some officials in Ministry of Finance and Bank of Uganda.. They diverted these funds to accounts under the OPM, one of these a dormant account, instead of routing them through the Consolidated Fund, where they would have been recognised within the OPM budget ceilings and spent in accordance with the work plans for the respective years.

Notwithstanding the undertaking made by 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 the sectors and OPM only retaining a minimal percentage to undertake coordination, monitoring and evaluation.

Let me also clarify that PRDP funds are allocated to the districts basing on the following criteria:

1. Population of the District or Municipality;

2. Conflict impact under which we have three categories; the severely affected, sporadically affected and spill-over areas; and

3. Performance of the District or Municipality against the money disbursed previously. Here focus is put on absorption of the funds and completion of planned projects as well as accountability

For avoidance of doubt, our PRDP disbursements are illustrated in Figure 1 (Budget to date under the PRDP Grant): (Table below) and Figure 2 (Disbursements of PRDP Funds to Local Governments): (Too big to fit this publication, but available at OPM offices)

The Office of the Prime Minister will continue to undertake measures in areas which need critical attention using the Post War Recovery and Presidential Pledges Fund, which also contributes towards the achievement of the strategic objectives of the PRDP. We have, in the past, undertaken a number of projects whose key outputs include the following:

1. Completed the Construction of 54 Acholi traditional Chiefs housesand 53 Helpers' Quarters

2. Resettled people from IDP camps

3. Procured and distributed 29 heavy duty tractors and 7 walking tractors specifically for Karamoja

4. Opened10,201Acres of land in Northern Uganda

5. Distributed 950metric tones of planting materials

6. Procured and distributed 350 ox-ploughs, 700Oxen and 350 heifers

7. Procured and distributed 60,000 iron sheets

8. Procured 60 Hydrafoam Machines for the PRDP Districts

9. Disbursed 6 bn to Ministry of Works towards theprocurement of a ferry

10. Disbursed funds towards the extending of electricity to the NUYDC, Oyam, Tororo, Soroti and Kaberamaido Districts

11. Achieved the following using Hydrafoam technology:

a) 20 Houses,10 Kitchens + stores constructed at Nadunget-Moroto

b) 19 Houses and 1 Health Centre constructed at Kampswahilli-Moroto

c) 20 Houses constructed at Acherere-Mororto

d) 20 Houses constructed at Lorengdwat-Nakapiripirit

e) 24 Houses & 1 Health Centre constructed in Amuria

f) 19 Houses & 1 Health Centre constructed for Widows at Kweyo-Gulu

g) 2 Staff Houses & 1 Health Centre constructed in Apaa-Amuru

h) A 6-roomed commercial house constructed for Mr. Onyika at Labora-Gulu

i) 72 Teachers' and 20 Health Workers' Houses constructed in Lamwo, Otuke, Zombo and Napak Districts

As earlier indicated, the advances that were made to the personal accounts of the officers working in Northern Uganda and Karamoja were largely used for the implementation of the above mentioned programmes and activities. It is therefore not true that these funds were simply "eaten" or are lost.

These physical outputs and accountabilities for funds advanced are available for verification.

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