Muhammad Ahmad Tarek (L), Abbey Kaddu and Kizito Ismail at Kibuli. Tarek was released. PHOTO/Eddie Ssejjoba
Ghosts are supposed to be supernatural, not employees in Uganda’s Public Service. But hardly a month passes before you hear of ghosts on payrolls, or in this case, ghost pensioners.
A recent audit discovered an estimated 7,600 ghost workers. It also discovered a network of ghost creators at the Ministry of Public Service supported by the Ministry of Finance.
And Uganda’s ghosts don’t come cheap. They cost the tax payer billions of shillings.
According to estimates by the Ministry of Finance, tax payers lose an estimated sh28b annually to ghost teachers, pupils and schools alone.
It was recently revealed that up to 1,000 ghosts ‘walked away’ with sh169b in pensions intended for former workers of the East African Community. Taxpayers, however, hope this time round, perpetrators will be brought to book.
What is Police doing?
Several officials from the ministries of public service and finance, banks and the East African Community Beneficiaries Association (EACBA), have been interrogated.
Among the people Police has interrogated are the Permanent Secretary, Jimmy Lwamafa, principal accountant Christopher Obey, research and planning director and pensions fund supervisor Stephen Kiwanuka-Kunsa, as well as data manager Francis Lubega.
Others are Cairo International Bank general manager for operations, Muhammad Ahmed Tarik, Ishaka Ssentongo, the compliance officer, Rahmah Mugeere, the supervisor for customer care, Grace Beinomugisha, the clerk in charge of data, Ismail Kizito and Abbey Kaddu, the authorising officer.
Officials of EACBA under probe are the chairman, Santos Alima, national secretary Peter Ssajjabi and administrator, Herbert Senabulya.
The Police said sh169b was paid to ghost pensioners through Cairo Bank between 2009 and 2012.
CID director Grace Akullo was surprised that the bank disbursed another sh10b to ghost pensioners between July and September, even as investigations were going on.
“We are following links that have led us to another sh106b, in addition to the sh63b paid out to ghost pensioners through the Ministry of Public Service system,” she said.
EACBA responds
Early last week, EACBA disassociated itself from the scam, putting all the blame on the ministry. “None of the names of the 1,000 ghosts is on the list we submitted to the Ministry of Public Service,” says Edris Kintu Sekulima, the vice-chairman of the association.
Ssajjabbi said Public Service had the powers to determine who goes onto the payroll. “Every claimant has a file at the ministry.
Let them check the paperwork in those files,” he told journalists last week.
“We have not looked at the statements made by public service officials but they must have forged those names, or manipulated the 120,100 names we submitted,” he says.
Asked about reports that he had powers of attorney to withdraw the benefits on behalf of the ghost pensioners, Ssajjabi said: “I have read media reports that I withdrew the funds but that is not true. It is unlikely that a bank will pay a third party on the presentation of a mere assignment. I have asked the Police to present us with this evidence.
"I also hope the Police obtained the withdrawal slips from Cairo Bank, as well as CCTV footage showing who withdrew this money.”
The Ministry of Public Service
Public service spokesman Jonas Tumusiime, was non-committal.
“The Police are investigating. We should not engage in blame games because they will not help,” he said.
But a source at the ministry said investigators should look at the compensations department. “That is the department in charge of processing, verification and payment of all claims,” the source said.
The process of claiming pensions
The compensations department is headed by commissioner Stephen Kiwanuka Kunsa and assistant commissioner Martin Onya. Kunsa is a prime suspect and has been interdicted.
The department is divided into four sections namely: assessment, accounts, records and database information management.
Claims are received by the assessment section where all documents are verified and authenticated and thereafter processed and entered into the database.
On meeting all the required criteria, these files are then forwarded to the audit department for approval.
This department is headed by Joan Natwenda, the principal personnel officer, who is also in charge of the traditional civil servants and retrenches desk.
Natwenda has also been interrogated.
The files are then passed on to the accounts section for processing. A team of experts computes what is due to each individual and pays.
There is another stage of auditing, that involves officials from the finance ministry. This section is headed by principal accountant Christopher Obeyi, who has also been interdicted.
All payments have to be approved by the Principal Accountant and the PS.
The PS has also been arraigned. “
Although the creation of ghosts is thought to start from the assessment section, the process has to have the blessing of all other sections as well as top officials in the ministry, for it to be successful,” said the source.
All paid and processed files are kept in the records section, which is charged with managing the database of pensioners.
The section is headed by Joe Jolly Namera, one of the officials who were detained.
Database information management is largely in charge of the ministry’s cashless payment system and is responsible for managing electronic bank transfers.
The head of this department, Richard Lubega, has been arrested.
“Regarding creation of a successful ghost list and continuing to pay them, all these offices have to be investigated,” explained the source.
The source added that even after ministry officials connive to create ghosts, they need senior bank staff to bypass account opening procedures, create fictitious accounts and withdraw money.
Another bank involved
New Vision leant that Tropical Bank also served as a conduit for money to land in the hands of unscrupulous people.
Tropical Bank’s senior manager in charge of business development, Juma Walusimbi said they disbursed pensioners’ money to people who were not supposed to be beneficiaries.
Walusimbi, however, dismissed allegations of collusion within the bank. He said it was the bank itself that unearthed the scam, blocked all suspicious accounts, arrested some people (impersonators) and reported the matter to the Police.
“In 2010 we blocked the suspicious accounts with over sh300m. We have been waiting to for Police to conclude investigations into this matter, so we can transfer the money back to the Central Bank.
"It is not viable for a commercial bank to hold suspense accounts for a long time.”
What really happened?
EACBA was formed in 1994 to pursue terminal benefits of former East African Community employees, after government’s failure to pay them.
It was composed of workers of the defunct airways, posts, harbours, railways and general fund services. It is a combination of 27 small groups who served in various capacities.
After a series of court battles, demonstrations and protracted negotiations, Government in 1996 agreed to an out of court settlement and accepted to make an initial payment of sh7.7b.
That created some panic, according to Kintu Edris Sekulima, the vice-chairman of the association.
“Government did not have a database of legitimate claimants, so it was agreed that the association works with Public Service to create a list of genuine pensioners,” he said.
Public Service formed an inter-ministerial committee that included finance and the Attorney General. The association was co-opted as an observer.
“We gave the committee 12,000 legitimate claimants who were compensated. This list, however, did not include claimants who chose to receive their payment from Public Service directly, or the over 100 we submitted as late claimants,” Kintu said.
Kintu argues that they merely handed in the list and had no power to determine who would be paid, how much and when. Public Service had the power to pay even without the association’s endorsement.
“The ministry shared lists of those who had been paid and we displayed them. But at some stage, they stopped sharing lists. They asked claimants to work directly with the ministry,” he said.
“Government also manipulated the formula agreed upon by the EAC states and refused to pay claimants based on the dollar. All payments were calculated in shillings.
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