A number of officials at the ministry of local government are facing a police investigation for fraud after the Auditor General John Muwanga implicated them in an embezzlement.
The Observer understands that Patrick Mutabwire, the ministry’s former acting permanent secretary, and John Genda Walala, the head of the ministry’s monitoring and inspection unit, are some of the officials under investigation.
The investigation was prompted by Parliament’s Public Accounts Committee (PAC), which is currently scrutinising the ministry’s books of account based on the auditor general’s report to parliament.
It runs concurrently with another investigation by the Inspectorate of Government. For the financial year ending on June 30, 2015, the auditor general found that billions of shillings earmarked to buy double-cabin pickup trucks for 111 district chairpersons countrywide in the run-up to the 2016 general election were diverted to individual local government ministry staff accounts without the approval of the Secretary to the Treasury.
During the previous financial year, the ministry requested for $4.5m (Shs 16.25bn) but was given Shs 7.01bn to pay in part for the 111 vehicles for LC-V chairpersons and in full for six cars for the ministry headquarters.
The cars were handed to the district bosses a few days to the February 18 general election, delivering on the presidential pledge to ease the movement of LC-V chairperson given “their significant role in public service delivery and supervision of government programmes.”
The auditor general has, however, discovered that only Shs 1.48bn was spent on buying the vehicles procured from M/S Toyota Ltd. The balance of Shs 5.5bn was diverted.
“These funds were subsequently transferred to staff personal accounts,” the auditor general noted.
According to the report, Shs 4.3bn was posted on individual staff accounts while Shs 118.2m was spent on last year’s African Day of Decentralisation celebrations held in Kabale district.
There are also unexplained cash withdrawals amounting to Shs 120m, while Shs 28m was spent on fuel. Ministry officials also used Shs 110.8m to clear hotel bills, Shs 315.6m to refund money borrowed from District Livelihoods Support Programme (DLSP) project, while Shs 196.8m was used to clear rent arrears.
According to the report, the diversions were caused by inadequate releases to fund the key ministry activities yet the procurement process for the vehicles was not concluded within the financial year; thus the need for utilization of funds on unfunded activities.
Muwanga, however, noted that such reallocations should have been supported with authority from the secretary to the treasury.
MORE DIVERSIONS
A further scrutiny of the ministry’s books of account revealed that some targets were partially or not achieved despite the release of funds to the vote functions. This was so because the bulk of funds for the budget items were diverted.
For instance, under the Africa Development Bank (AfDB) supported project to construct markets; the markets and agricultural trade improvement project (MATIP), government did not honour its obligation of counterpart funding for activities to undertake consultancies and payment of VAT.
Construction of administrative units for some districts was not undertaken. The ministry’s budget had Shs 735m for construction of administrative units for Buvuma Town Council in Buvuma district, Shs 100m, Kibiito Town Council in Kabarole district Shs 20m, Masaka district Shs 23.5m and Kayunga district Shs 100m.
Much as the ministry received about 70 percent of the budgeted amount (Shs 514m), the money it sent to the districts was representative of 47 per cent of the total sum it received.
The ministry also failed to utilise Shs 75m for consultancy works for the Nakawa-Naguru housing project and another Shs 200m for an international conference on conflict resolution in addition to Shs 338m for workshops on local government’s support to local economic development and the community driven development.
BREACH OF INSTRUCTIONS
The report also accuses Mutabwire of breach of Sections 227, 228 and 229 of the Treasury Accounting Instructions (TAI), which requires for all payments to be made directly to the beneficiaries.
However, more than Shs 10.4bn was deposited to the ministry staff’s personal accounts for them to undertake direct procurements, and to also carry out other ministry activities.
A review of the funds that were deposited on personal accounts revealed that the ministry officials failed to account for Shs 3.8bn.
“As such, I could not ascertain whether the funds were used for the intended purpose. It was also noted that the unaccounted-for funds were not reflected as advances receivable in the financial statements at the end of the year. The financial statements were, therefore, misstated,” Muwanga stated.
The ministry also failed to account for another Shs 2.4bn, which was paid out without the approval of the relevant departmental heads contrary to the TAI. This matter, in addition to depositing of huge sums of government funds on personal bank accounts have been taken up for investigation by the inspector general of government (IGG), according to the report.
The report also talks of an official at the ministry who drew Shs 499.5m in excess of the acceptable subsistence night allowances. While the 2010 public standing orders on travel allowances provide for a maximum claim of 150 days in night allowances per year, the unnamed official claimed for allowances for 1,036 nights in one year yet there are 365 nights in a given year.
This implies that on average, this official took three foreign trips every day throughout the year. When ministry officials appeared before PAC two weeks ago, committee member Mathias Mpuuga asked them if they were astronauts, that they spent some days on Mars and the moon to have their year extend beyond the 365 days.
Muwanga also rejected accountability for Shs 635.6m, which an official claimed to have spent on payment of accommodation and meals for 70 participants of a workshop at a guesthouse.
The guesthouse in question denied having hosted any workshops, in addition lacking capacity to host more than 18 guests per night.
He also discovered that more than Shs 1.1bn was deposited on staff personal accounts to procure fuel instead of being deposited on the ministry fuel cards. Out of this amount, Muwanga reported, Shs 378.5bn was not accounted for, rejecting explanations that the officials took cash instead of fuel cards because they were going to rural areas.
INCONSEQUENTIAL
But civil society activists as well as the opposition hold fears that these findings may not be of any consequence.
“The findings have never been followed beyond the reports. It is the same thing with many other reports. If action was being taken, these issues wouldn’t be coming up again,” said Cissy Kagaba, the executive director of Anti-Corruption Coalition Uganda (ACCU).
Kagaba’s arguments are based on an analysis of the auditor general’s reports covering financial years 2010/11 to 2013/14, which shows a low level of compliance to the reports’ recommendations.
“Whereas the [auditor general] has effectively presented the annual audit reports to Parliament, over the years, there is a challenge of backlog of reports submitted. This is a stumbling block in the accountability cycle since it’s upon which [ministry of Finance, Planning and Economic Development] responds through the Treasury Memorandum to Parliament. This creates a situation where the recommendations on some issues raised are overridden by time,” the report by ACCU states.
The Leader of Opposition in Parliament, Winnie Kiiza, put the blame on the executive under President Museveni.
“For us [Parliament] we have tried our best to do what is required of us as per the Constitution and the rules of procedure… ours is to make resolutions and recommendations to the executive, we only wait to see whether the executive will implement but on many occasions our recommendations are [not considered],” Kiiza said.
sadabkk@observer.ug