Management blamed for causing Shs 5bn loss and accumulating Shs 8bn debt

James Arinaitwe, the managing director of Posta Uganda, is having it rough at his job. An anonymous document purportedly written by a cross-section of employees at Posta is accusing him of numerous anomalies in his management style.

According to the three-page dossier dated August 5 signed by “concerned staff’ and distributed to the office of the Inspector General of Government (IGG) and the office of the Speaker of Parliament, Arinaitwe is being accused of financial mismanagement, mistreatment of staff, money swindling, nepotism and irregular recruitment of staff at Posta Uganda.

“Posta Uganda will in next to no time crumble if you do not come to its immediate rescue,” the document reads in part, “It appears that there is no direction at Posta Uganda as the managing director has turned to a barbaric style of management.”

According to the dirty dossier, Arinaitwe, whose contract began on April 1, 2008, became Posta MD due to “influence peddling” and has “disorganised the operations of the company”.

The dossier alleges that Arinaitwe’s appointment met stiff resistance from members of the Posta Uganda Board of Directors, with only three of the eight members approving his appointment. It is alleged that the human resources consultants hired by Posta to vet applicants for the MD post ranked him third best for the job.

At the centre of the maelstrom surrounding Arinaitwe is a Shs 60 million robbery that occurred under his watch in the company. Internal investigations have since concluded that it was an inside job.

Apparently, in August 2008, Arinaitwe abolished the use of the strong room, an area where money collected by Posta was kept until it was banked. Instead, he instituted a cost-inefficient policy that saw all Posta cashiers lining up at banks to deposit daily collections to the Posta account.

Barely a month later in September, Uganda Revenue Authority (URA) froze Posta Uganda accounts making it impossible for collections to be banked. Arinaitwe then instructed the Acting-General Manager-Finance John Kazibwe to note all daily collections and supervise the keeping of the money in safes at the General Post Office (GPO).

A few days after Arinaitwe issued these instructions, on the night of September 4, 2008, Shs 60,304,300 was stolen from the office of Joseph Kirijja, a cashier who previously handled petty cash, wrote cheques and filed paid vouchers. The thieves left behind a laptop computer that was on the desks in the same room, cheques and coins amounting to Shs 28,800.

An internal audit investigation was instituted immediately and four days later its findings were released in a report.

A copy of this three-page report seen by The Independent is dated September 9, 2008 with reference number PSI 21/1/2008 under the subject; “Interim report on the break-in and theft of official funds from headquarters cashiers’ office Mr. Kirijja Joseph on the night of 4th September 2008”. According to the report, Kazibwe told the investigators that the MD, after studying the situation that culminated from the closure of Posta Uganda’s bank accounts by URA, instructed all responsible officers at GPO to report collections to him and keep the money safely in safes until the URA issue was settled. The cashier Kirijja also told the investigators that he was instructed by Kazibwe, who had been instructed by the MD, to receive all money collected at GPO between September 2 and 4 and keep them in the safe in his office.  

The report, among other things, questioned the motive of the decision by the MD. It read in part: “What is disturbing is the decision to designate the Ag GM/Finance to take on the duties of the GPO cashier without the control of the strong room which is designed for keeping cash collections pending banking. The subsequent transfer of the funds to Mr. Kirijja’s office by Mr. Kazibwe was uncalled for.”

The Criminal Investigations Directorate (CID) of the police took over the investigations, but to date, nothing conclusive has been reported. Mr Kirijja was arrested, interrogated and later released.

Initial efforts to get comments from Arinaitwe were fruitless. When he did answer, he said the accusations were baseless. “We (Posta Uganda) have statements prepared about these issues. You are welcome to come and read them for yourselves but you cannot take them out of the premises,” he said.

 When The Independent insisted, Arinaitwe became adamant.

“I cannot be threatened,” he said. “Tell your editor to publish what he wants.”

According to him, the complaints against him had been examined by others and found to be without merit. When told, however, that it was not up to him to decide, Arinaitwe finally accepted an interview on October 1.

When asked about this incident, Arinaitwe blamed some of his staff.

“When investigations were instituted, some staff began sending threatening emails to Kazibwe and me, telling us that this money did not belong to any one of us and that we should not be crying over public money. I am a steward answerable to government. I must get to the bottom of this whole mess. We have since established that some former staff tried to bribe the police,” he said.

Billions in debts

The Independent has since established why URA froze Posta Uganda’s bank accounts. For five years before Arinaitwe got the job, Posta Uganda evaded taxes amounting to over Shs 3 billion, owed the National Social Security Fund (NSSF) Shs 1.571 billion, owed the Posta Pension Scheme Shs 1.9 billion, Uganda Telecom Shs1.2 billion, and a cool US $1million to the Kenya Post Office.

The Independent has seen a copy of a letter written to Posta Uganda by Bitange Ndemo, the Permanent Secretary in the Ministry of Information and Communication of Kenya demanding pay and threatening to cut postal ties with Uganda. It has also seen demand notes from URA and UTL to Posta Uganda. Over the same period, internal investigations reveal that Posta Uganda has been losing about Shs 5 billion every year in various frauds. Since then, Posta has agreed with URA to pay Shs 40 million per month and US $135,000 to Kenya monthly to offset their debts.

Surprisingly, when ICT Minister Aggrey Awori was asked to comment on the affairs at Posta Uganda which is under his docket, he said he was not aware of any controversy.

Arinaitwe also declined to comment conclusively. “I cannot say much about this issue. All I can say is that Posta lost a lot of money but the new management is rectifying the situation. For the first time in five years, Posta Uganda’s books of account were delivered on time and were not qualified, rather they are in order.”    

Arinaitwe also dismissed accusations of nepotism. It is alleged in the anonymous dossier that in May 2008 he ordered the Human Resource department to re-register all Posta employees indicating their names, tribe and telephone contacts and that this data was compiled and a copy given to him. He is also accused of irregular transfers of staff. During the restructuring process, Arinaitwe allegedly, without proper consultation, presided over numerous transfers that led to the resignation of several employees. It is alleged that he did this to reward and entrench some employees loyal to him who were unqualified for the positions they were appointed to and cites the example of the finance department.

“The new board fired incompetent section heads and corrupt employees. I as MD was not part of this process,” Arinaitwe insists. “The MD has never fired anyone. To fire a person takes a process. There are investigations conducted followed by disciplinary hearings depending on the position of the person. I do not affect the decisions of the board and the MD is not a member of the any disciplinary committee at Posta.”

The dossier claims Arinaitwe ignored Human Resource Department regulations by appointing outsiders to internally advertised jobs. The new staff, Annette Nkunzire who became executive secretary in the office of the managing director, Charles Kangaho, the security manager and Daniel Onyango, procurement manager are said to have never been approved by the human resource department of Posta. 

 “I was on sick leave when these three were appointed,” Arinaitwe told The Independent, “The three are not known to me personally and there is a process they went through which personnel [manager] can explain. All I know is that they are temporary employees with temporary contracts. The positions were advertised internally and externally and were competed for competitively.”

The Independent has however established that the old Posta board was dissolved and its members fired. It has since been replaced by an entirely new administration. Most section managers were also fired in a restructuring process sanctioned by the Ministry of ICT over allegations of corruption and sectional mismanagement.

The dossier alleges that on Sunday May 31, Arinaitwe, while driving an official Posta Uganda Land Cruiser Reg. No. UAH 628E, without a chauffer, was involved in an accident in Masaka. The vehicle was extensively damaged and has been grounded at Masaka Police Station.

The dossier alleges that Arinaitwe claimed he was being chauffeured. Arinaitwe has since been given a new vehicle Reg. No. UAM 239M.

The circumstances of his accident are unclear to date but Arinaitwe says he was on duty.

“I work everyday from Monday to Sunday. I was coming from a working trip in Western Uganda when the accident happened. I don’t need a driver at all times. I have a driving permit and can drive myself. To use my driver at all times would mean that Posta would have to pay overtime. Why not save these costs? The accident was unfortunate and besides, that vehicle had been written off last year and the board had passed [a resolution] to buy the office of the MD a new one. It is on the record.”

The dossier also alleges that Arinaitwe refused to refund money given to him for a trip to Egypt in April yet he did not travel. Apparently, his failure to travel was due to ‘missing his flight.’

Arinaitwe says that he refunded the said money to Posta. “There is proof in the accounts department that I refunded that money,” he said.

The dossier also alleges that he unethically awarded a contract to a company to ‘review salaries of Posta employees’.

The company, Future Options, reportedly made the salary review study in a record two days. Apparently Arinaitwe wants his salary adjusted from Shs 10 million to Shs 14 million yet the salary gap between managers and regular employees is huge. The Independent has established that General Managers earn approximately Shs 4 million followed by middle managers who earn between Shs1.2 and 1.5 million; regular employees earn between Shs 500,000 and 800,000 before taxation.

Things fall apart

As accusations against Arinaitwe continue to pile up, most of Posta Uganda’s core business responsibilities are floundering.

Established in March 1998 when the former Uganda Posts and Telecommunications Corporation (UP&TC) was balkanised into Posta Uganda, Post Bank and Uganda Telecom (UTL), it previously had nine mail delivery vans, now they are only three.

Its EMS service is failing; two post offices, Oboja Road Post Office in Jinja and one in Mukono town were recently closed. Lack of staff and unpaid rent arrears has been linked to these closures.

Previously, Posta Uganda had 275 post offices in all the regions of Uganda. These included 10 Head Post Offices (HPO), 47 Department Post Offices (DPO), 215 Sub-Post Offices and 1,522 registered stamp vendors.

Today, maintaining a post office mail box is becoming less desirable with more and more pre-paid postage customers pulling out of the scheme.

Parcel theft is rampant and is said to be at an all time high together with other mail violations and unnecessary delays in mail delivery.

The services of the Post Buses have also dwindled. Previously, there were 17 buses plying the various routes. Currently the fleet has reduced to eight; 4 coaches (big buses) and 4 small buses. Arinaitwe says he inherited these problems but they will be solved.

“For ten years Posta Uganda was bankrupt; its accounts were always in red and it never made profits. Stakeholders complained to the board of numerous anomalies which include poor books of accounts, flouting of numerous laws and rules of conducting business, theft and many others,” he says, “We cut the fleet of buses and sold some off but we are now collecting Shs16m a week with eight buses, compared to Shs 9m when I came in.”

Arinaitwe accuses saboteurs of trying to stop change for the better at Posta Uganda.

He said: “Since government decided to restructure Posta, we in top management have met resistance. Posta was a haven for thieving employees who plundered every single resource avenue they could find. They stole letters, money orders, were landlords to numerous Posta properties around the country and others even sold off Posta properties because they say these things belong to government and not an individual. Posta branches countrywide were a mess; money collected was used internally and would rarely get banked at the main Posta account. Many profited from this state of disorganisation with unqualified people working in positions of importance. Some were removed while others still remain but will not be here for long. The IGG has advised us to report those suspected of corruption so that they can be investigated and be arraigned before the Anti-corruption Court. We are compiling a list of offenders and offences and will present them soon.”

Alex Mulooki, the former Acting-Managing Director, says “Arinaitwe may have his own failures as an individual” but he must have been the best for the job. After reading the dirty, albeit anonymous, dossier and watching the operations of the company limping, it remains to be seen how many still agree with Mulooki’s view.

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