7 July 2013

Uganda: Govt Billions Vanish On Personal Accounts

At least Shs 25bn of the Shs 67bn deposited on personal accounts of government officials has vanished without a trace, a new Auditor General's report has found.

In the latest findings, the AG, John Muwanga, says many accounting officers deposited public funds on their personal accounts ostensibly to carry out official activities. But this money remains largely unaccounted for.

Normally, the AG's report says, the funds should have been paid to the beneficiaries directly. The Auditor General says depositing cash on a public officer's account is not only contrary to established regulations and procedures; it is also risky and exposes government funds to possible loss.

"Accounting officers have no control over private individuals' accounts... and it is no wonder that in the examination of a total of 67bn involved, it was revealed that 25bn remained not adequately accounted for," indicates the AG's report.

The report, which comes at a time when Uganda is said to lose an estimated Shs 510bn to corruption annually, says good financial management is not practised by most government departments. The report also revealed that following another special audit of the pension funds under the ministry of Public Service, it was established that due to laxity in financial controls, an estimated Shs 165bn had been misappropriated.

The new findings come after another Shs 93bn was reported by the AG in his 2011/12 report to have been lost in the ministry of Public Service. The report also shows that the misappropriated funds meant for the Peace, Recovery and Development Programme in northern Ugandan has risen to Shs 58bn, up from the Shs 50bn reported in the previous report.

"A special audit was undertaken in the Office of the Prime Minister on allegations of impropriety in financial mismanagement and financial irregularities such as diversions, fraud, unauthorized approvals of payments and irregular withdrawal of funds. As a consequence of these irregularities, Shs 58bn is estimated to have been misappropriated," the report says.

NSSF land:

The new AG report also resurrected the controversial irregular purchase of land measuring 463.87 acres by the National Social Security Fund. NSSF spent Shs 16bn on the land that belonged to Prime Minister Amama Mbabazi and his business partner, Amos Nzeyi, at Busiro, Temangalo, in 2010. But according to the findings of the Auditor General in the year ended June 30, 2012, the land's value has reduced by Shs 3.54bn.

"During the year under review, the fund engaged the services of another professional valuer whose report indicated that there was a Shs 3.54bn reduction in the fair value of the said land... " reads the report.

The Auditor General explains that this was a result of the presence of squatters on the land and the development of a swamp measuring about 67 acres, which were not considered in the previous valuation.

"Although the terms between NSSF and the vendors were that the land would be free of encumbrances, including settlement of tenants and squatters on the land, the issue of squatters and tenants on the land had not been resolved as of June 30, 2012 when the valuation was done," the report said.

The report added that there were efforts by the vendors and NSSF to make an exchange of the land but the minister of Finance had turned it down.

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