By Our Reporters
Many Chief Administrative Officers (CAOs) and other accounting officers in local governments are currently having sleepless nights after Auditor General John Muwanga’s boys descending on them asking deeper accountability questions like never before. It’s now that time of the year when auditors from the Office of Auditor General (OAG) John Muwanga get down to audit more than 2,000 government entities. This is part of the preparations for the much-awaited Auditor General’s annual report which is always released through Parliament every December. The report always concentrates on expenditure performances of all government entities for the preceding Financial Year and in this case it’s the FY2017/18 that is being scrutinized. However, on the prompting of the President, the OAG is “going deeper” this year in a few selected areas. The decision to go deeper has been taken basing on the fact that, because there are thousands of entities to be audited, its most of the time not possible to sufficiently audit all of them to the same level of depth. This is why the extent and depth of the audit will always vary; some entities will be audited generally and others more deeply. This news website has reliably learnt that the areas that have been earmarked for “deeper auditing” this FY2017/18 include the Youth Livelihood Program (YLP). This was decided after the President got reports that there was a lot of corruption in especially funds that the benefiting youth groups (borrowers) have been repaying back under the YLP. Its one area the OAG had overlooked and wasn’t going deeper when carrying out routine annual auditing. “The resolution is that the management of all the monies the young people have been repaying should be looked into very deeply and the CAOs are shocked to realize that Muwanga’s boys are asking many more questions than in the past regarding the management of the billions coming under the YLP. In many cases, CAOs have resorted to forging accountability documents and many of them could end up being prosecuted because the big man is very angry and is tired of being betrayed,” said one of the knowledgeable sources we spoke to for this article. Its suspected financial loss has previously been occasioned to government regarding the monies repaid back by the young people. “We are doing this because we realized that YLP is one clear risky area with potential for lots of government money to be lost and our job is to preventively move in rather than wait to do postmortem,” said of the ruthless audit boys Muwanga has unleashed in the districts to execute the comprehensive audit that is currently underway. “We have audited YLP before and we have the reports but this year’s is going to be deeper and no stone is going to be left unturned. The scoping is different, more questions are being asked and more documents asked for.”
OTHER DEEPER AREAS;
Reliable sources further told this news website that at the State House prompting, there are other areas on which Muwanga’s boys are “going deeper” because they have been identified as high risk for potential financial loss “because accounting officers were beginning to take advantage.” These other areas include the overall management of public debt by people at the Finance Ministry and the management of domestic arrears across government. The President furiously believes these two areas have lots of loopholes which have been exploited in the past to rip off government. As we reported in our earlier story (titled New M7 dossier pins finance ministry bosses over collusion with city money lenders), billions that are annually returned to the consolidated fund as unspent by especially district local governments every 30th June is another area that Muwanga’s boys are “going deeper.” This Muwanga decision was preceded by the President’s well expressed fury after getting well corroborated reports that technocrats at the Finance Ministry have for the last 5 years been using some of this money to operate very successful money lending businesses. One of them was recently reported to the President to have heavily invested in real estate in the far eastern town of Mbale including hotels and acquisition of prime vacant plots on the town’s main street. The other area the President wants to be separately subjected to forensic audit is to do with monies the Central Bank collects from Commercial Banks by way of Deposit Insurance Fund and penalties imposed for noncompliance (e.g. misreporting) under the Finance Institutions Act as well as the Anti-Money Laundering Act. Some of the levies (e.g. the DIF) are dependent on a given commercial bank’s deposit base and its part of what the central bank uses to indemnify the poor depositors in case of collapse of a given bank. This DIF money is for years kept deposited with the Central Bank and can only be activated in case of an emergency (say a bank collapses). The practice is that all deposits below Shs3m must be insured under the DIF arrangement and its mandatory for every commercial bank involved in deposit-taking. The big man also wants scrutiny on the management of the billions BoU makes in interest paid by commercial banks which turn to it as lender of last resort.
MORE AREAS:
The President, who is said to be in a hurry to serve his people and make this country a better place for everyone because he feels he has underachieved, is understood to be more concerned with punishing perceived economic saboteurs before he deals with anything else. “Since becoming President, there are two areas where his track record was well illustrated and these are economy and security. There is nervousness that these accomplishments are slipping away and this is why whoever he [M7] perceives to be sabotaging him on those fronts is going to be comprehensively punished,” said a source close to the H/E. It was further revealed that much of the action will be coming after the 26th June pronouncement of judgment in the age limit case now that the LC1 elections are well behind us. As part of his broader efforts to revamp the economy, Museveni has reportedly singled out three areas that must urgently be rectified. These, according to impeccable sources, include electricity tariffs (which puts guys at ERA in deep trouble), commercial banks interest rates (which puts guys at finance & BoU in deep trouble) and transportation costs including the way the cost of fuel/per liter is determined. This mandate is resident in the energy ministry and sources say the President is angry as to why for many years only two firms (names withheld) have been permitted to bring fuel into the country. They get it from either Kisumu or Eldoret pipeline and it’s them that replenish Shell, Total and other fuel dealers in Uganda. “A delegation of young people, including those who had just returned from Aberdeen and Dundee in Scotland on Petroleum courses which he sponsored them for, recently came to see Mzee in Entebbe and their presentation on economic sabotage moved him to near tears. He was shocked to learn from their research findings that the two firms avail fuel to Shell, Total and others at a profit of Shs700 per liter and they assured him even if he reduced taxes, the situation will seldom change. Fuel can’t become sufficiently affordable as long the two firms continue to monopolize that deal. Mzee was so bitter and vowed to get to the root of this problem because there is no way Ugandans are going to trade profitably and pay taxes to build the economy as long as transport costs remain this high,” an influential State House assistant told this news website concerning the said meeting. For comments, call/text/whatsapp us on 0703164755.
