More Shs165b spent on ghost pensioners

NSSF MD Richard Byarugaba.  

By YASIIN MUGERWA

In Summary

Cash bonanza. New probe by Auditor General finds over Shs165b paid to non-existent pensioners. NSSF denies receiving part of the money (Shs80b), which ministry claims to have paid to the Fund.

Auditor General John Muwanga has released a new report which says officials at the Ministry of Public Service “misappropriated” more than Shs80 billion under the cover of questionable National Social Security Fund deductions.

The December 2012 report released yesterday says Shs88.2b, largely attributed to ghost beneficiaries from the police, prisons and army, formed part of a total Shs165.4 billion that was paid as gratuity to 3,000 non-existent pensioners.

No record of this money could be traced at the Fund, which yesterday distanced itself from the transaction.

“Budgeting [for] pension funds as NSSF contributions was irregular…,” the report notes. NSSF Managing Director Richard Byarugaba said in a statement to the Daily Monitor that “it is not true that NSSF received Shs88.2 billion from Ministry of Public Service.”

Mr Byarugaba said the Fund receives contributions from various ministries for employees in government projects, which are remitted through the respective projects.

“However, Ministry of Public Service is not among these ministries,” he said. “The Fund also receives the employee share of the standard contributions (5%) for employees in government-funded statutory bodies through the Ministry of Finance”.

Mr Muwanga’s findings followed a special investigation into the public pensions sector at the request of the secretary to the Treasury.

Mr Muwanga notes in his report that tagging pension monies to alleged NSSF contributions was contrary to Section 1(8) of the NSSF Act which exempts police officers, Uganda Prisons Service, soldiers and any other person eligible for government pension benefits.

In each of the financial years 2010/11 and 2011/12, Public Service officials are said to have budgeted for Shs44.1 billion as NSSF contribution, money feared to have been stolen.
The report shows that payments of the Shs165.4 billion was “not backed with personal files to provide employment details of the beneficiaries”.

That money was paid out between February and November last year as gratuity but detectives have established that the beneficiaries were all non-existent.

In September, the Daily Monitor broke a story indicating that a police investigation was closing-in on a racket of senior staff in the ministries of Public Service and Finance, who paid out at least Shs63 billion to 1,018 ghost pensioners last year.

Former Public Service Principal Accountant Christopher Obey and his assistant, Mr David Oloka Apila, who are suspected to have masterminded this racket are being investigated over the matter.

Several other senior officials in the ministry, including the permanent secretary, Mr Jimmy Lwamafa, have since been sent on forced leave. At least 17 suspects were arrested with some being dragged to court.

The December report also exposes Shs15.4 billion purportedly paid to a law firm (name withheld for legal reasons) as a result of a court judgement to pay damages to 6,337 pensioners due to delays in processing their benefits.

However, a copy of this judgement provided to the auditors indicated that it was another law firm which represented the pensioners.

Four law firms are reported to have been involved with the case, however, only one firm was present at the time of filing and subsequent payment of the bill of costs.

Also, whileHe added: “In the circumstances, the funds were irregularly paid to a non-genuine law firm and are not supported with the details of the beneficiates.” the Attorney General was served a joint instruction of advocates, that office did not receive a hearing notice and was therefore absent during the taxation of the bill of costs.

“Ministry of Public Service did not explain how they got involved in paying a firm that was not originally involved in the case. They were also unable to explain why they did not involve the Attorney General in the matter,” Mr Muwanga’s report notes.