By John V Sserwaniko
To his credit, on getting Auditor General John Muwanga’s report indicating the domestic arrears (basically money service providers were demanding) against government had grown to Shs2,134,562,011,370 PSST Keith Muhakanizi insisted on an independent verification exercise before accepting liability on behalf of government.
Reputable international audit firm Ernst & Young was contracted to carry out a verification exercise into the more than Shs2trn claims that had been accumulated against government in the last three years preceding 2017. In doing this, Muhakanizi was acting under Sections 21(2) and 49(1), (3) and 5(e) of the Public Finance Management Act.
Consequently, all accounting officers (people charged with spending government money in the different entities) were asked to avail consultants from Ernst & Young with all supporting documents relating to service providers that had outstanding financial claims against GoU arising from goods/services they supplied but weren’t paid for. They each supplied claims of up to 30th June 2017.
According to Finance Minister Matia Kasaija, the verification exercise resulted into a realization that of the Shs2,821,791,242,560 that was being claimed against government by the different service providers, only Shs1,299,569,506,880 (46.1%) was genuine.
This simply means that a whopping 54% of the original Shs2.8trn bill that the accounting officers for the different MDAs had passed and sanctioned as outstanding against government was ghost and fraudulent. “In many cases these claims actually never existed against government. It was just powerful people in the MDAs conniving with rogue elements in town to create ghost service providers and use them to siphon colossal sums of money for themselves,” says a knowledgeable official close to the E&Y verification exercise.
Kasaija summarizes E&Y findings as follows; Shs2,821,791,242,560 being the total claim the MDA heads and Auditor General John Muwanga had forwarded to the Finance Ministry as the outstanding figure for the domestic arrears against government (simply suppliers whose services gov’t hadn’t paid for).
Kasaija itemizes the E&Y findings to include Shs1,299,569,506,880 (46.1%) as the genuine claim against government; Shs373,765,925,164 (13.2%) as remaining contested and Shs426,136,355,461 (15.1%) as the figure the E&Y auditors have since confirmed to be fictitious claims and will never be paid.
The Minister also refers to another Shs37,407,274,694 (1.3%) as what E&Y consultants couldn’t verify because it relates to missions abroad and security forces famously operating in an area called “classified” and therefore beyond some of the scrutiny questions.
There is also another Shs684,912,180,361 (equaling 24.3%) which the consultants couldn’t authenticate because the heads of the MDAs that had initially forwarded such claims became elusive and avoided any interaction with E&Y consultants.
Kasaija, who has already communicated to all accounting officers sharing with them some of the shocking findings by E&Y, says they must each “show cause why disciplinary action should not be taken against them in line with Section 79 of the Public Finance Management Act 2015.”
The elderly Minister from Bunyoro also says the verification exercise by E&Y has been extended to the period between 30th June 2017 and 30th June 2018 to enable more comprehensive verification. They are also required to keep updating the PSST Keith Muhakanizi sharing with him copies of whatever documents they surrender to the teams from E&Y.
Kasaija has equally shared these shocking findings with the President, Prime Minister Ruhakana Rugunda, IGG Irene Mulyagonja and Head Public Service/Cabinet Secretary John Mitala. Some people are demanding that these shocking findings by E&Y is a godsent opportunity for State House anti-corruption Tsar Edith Nakalema to move into the offending MDAs and crack the whip as a way of demonstrating to the doubting Thormases that her anti-graft crusade isn’t about just the small fish but everyone culpable for improper conduct.
AFFECTED MDAs
E&Y auditors expose the 15 entities/MDAs from which the fictitious claims (costing Shs426,136,355,461), which the PSST has since rejected as sham, originated. They include Gen Kahinda Otafiire’s Justice Ministry (Shs104,368,204,321 which is 24%); Monica Azuba’s Works Ministry (Shs60,202,607,377 or 14%); Sam Cheptoris’ Water Ministry (Shs42,356,356,998 or 10%); Prof Barnabas Nawangwe’s Makerere University (Shs26,675,787,118 or 6%); Allen Kagina’s UNRA (Shs17,771,079,087 or 4%); Uganda Coffee Development Authority (Shs11,578,756,650 or 3%) and Amelia Kyambadde’s Trade Ministry (Shs11,379,118,362 or 3%).
Others are Jennifer Musisi’ KKCA (Shs8,222,988,783 or 2%); Bart Katurebe’s Judiciary (Shs6,282,517,035 or 1%) and NFA (Shs4,156,935,839 or 1%) just to mention a few. Mulengera News investigations show that there is another category designated as “others” from which originated a fictitious claim against GoU amounting to Shs21,437,143,036 or 5% of the total fake claim of Shs426,136,355,461.
Yet that isn’t all. Another Shs373,765,925,164 claim against government has been halted after the E&Y raised a red flag prompting the Finance Ministry leadership to categorize the claim as “contestable” meaning such purported service providers will have to produce all the relevant supporting documentation before their claim can be considered.
But a source close to the E&Y verification process told Mulengera News that its very unlikely the PSST’s position tilting towards disallowing this Shs373.7bn claim will change. On this one, the affected agencies include Foreign Affairs Ministry whose domestic arrears worth Shs67.6bn continues to be blacklisted as contested. Others are EAC Ministry (Shs49.3bn); Makerere University (Shs27.7bn); Uganda Police Force (Shs13.1bn); Lands Ministry (Shs9bn); Uganda Coffee Development Authority (Shs6.5bn); Agriculture Ministry (Shs6.3bn); UNRA (Shs3.8bn); Energy Ministry (Shs3.9bn); Water/Environment Ministry (Shs3.2bn) and Electoral Commission (Shs18,694,425,796).
The Finance Ministry’s Director Budgeting Kenneth Mugambe says the process is underway for the validated domestic arrears amounting to Shs1,299,569,506880 to be paid. He says its being phased into three financial years with Shs400bn being allocated under the soon-commencing Financial Year 2019/2020. Watch this space for more analysis on the E&Y report. (For comments, email us at mulengera2040@gmail.com).
