Creation and maintenance of ghost soldiers

The Committee established that ghost creation and maintenance falls into the following two categories:

Massive: Here ghosts are created and maintained on a large scale and the players are sophisticated and operate through a concealed network at MOD/UPDF HQs.

Non-massive: This is mainly found in units and basically arises from non-declaration of occurrences.

(a) Massive ghost creation: The following are instances of massive ghost creation and maintenance:

(i) Possible abuse of various accounts by MOD (Finance) and DOF. The Committee received evidence that there are balances in billions of Shillings that accumulate on the salary account of the UPDF.

MAJ. GEN KAZINI

Kazini: ...Whatever comes from the treasury to pay soldiers is verified here. There is another verification body in the Finance department. I have got a document here which I have brought as a case study, for May this year, how much money was verified and paid out to the soldiers and how much money came out of the treasury which left behind a balance of Shs 1.9bn.

When asked about this salary account, the PS MOD [ministry of defence] said that balances on salary account can be accessed only on authorisation by the treasury and again only for purpose of salary payment.
However, the US/F&A in her testimony professed ignorance about the account and in fact she instead called it below the line account.

US/F&A (Under Secretary Finance and Administration) - BYENGOMA

Q: Do you mean that all the money, say 10Bn for Annual Wage bill of UPDF is all used in a year?

Byengoma: Yes. But really I am saying that UPDF utilises the entire amount.
Q: If for instance you budgeted for 100 billion per year and you use 80 billion per year where does the 20 billion go?
Byengoma: That is what I am saying that it goes on the below the line account.

The testimony of the PS indicated that there are stringent controls on the account and that the money on that account is not easily
accessible. On the other hand the testimony of Mr Kigundu (ACA- MOD) indicated the contrary.

PS- MOD- MR GABINDADDE MUSOKE

Q: We have received information that the Ministry of Finance Treasury releases salaries of UPDF in tranches. In other words there is a certain amount which is released every month constantly for the 12 months and that every month the actual wage bill paid is less by some amount. I would like you to tell us how much is released every month and after that how much is paid for our wage bill?

PS: The release of funds is actually done according to strength. That is why wage payment is sometimes delayed because you have to get the wage strength verification and requisition according to the numbers of verified strength. You put in a requisition for the funds and that strength which you have requisitioned for is what is released. So at the end of the day you find actually that out of 55,000 that would be the strength for example of wage for a year, indeed 55,000 is paid for that year. You may find that in one month to end of the financial year, it will not add up to that number, that the money would not be released but instead what you requisition for is what will be released and paid out.

The Committee later leant that actually other monies like returned soldiers’ salaries and balances from units are banked on the Below the Line Account.

PS-MOD - MR GABINDADDE MUSOKE

Q: Sir, do you have an account called Below the Line Account?

PS: That is a Government facility. Sometimes we use it in paying monies we receive from Internal Affairs.

Q: You never put there this type of money, which is released but remains as balance received for pay salaries in the bank?

PS: I don’t have knowledge. The Assistant Commissioner Accounts indicated that some money
remains on the MOD account in the Treasury but can be accessed whenever there is increase in strength.

ACA MOD - MR KIGUNDU

Q: If 10bn/- was released as you said and 9.5bn/- was used up, and 0.5bn/- is remaining up there [Finance], under what
circumstances do you get that money?

Kigundu: The 0.5bn/- would only be accessed in the following month’s payroll...... If the following month’s pay roll comes out
to be 10.1bn/- due to increase in strength and you have a balance of 0.5 b/= and they are releasing to you Shs 10b/=per month, then your fall back position will be that 0.5bn/- which is remaining on account.

Q: So Mr Kigundu, when you have problems you increase the Strength?
Confidential

Kigundu: Whoever will have increased the strength, assuming there is an increase in strength the money will go to the ....Division where this strength has been put.
However, the Committee has established through its own research that there are two different accounts, which are operated at the Ministry HQs where possible abuse is suspected:

(a) The Salary Account

(b) Below the Line account

Salary Account in the Treasury (MOF)

The salary account in the Treasury refers to an account in the Uganda computer services department of Treasury, Ministry of
Finance. This is where all the releases from the Budget Department of Ministry of Finance are deposited for the Ministry of Defence to start drawing cheques for purposes of paying salaries.

Whenever money drawn by Ministry of Defence to pay salaries is less than that released by the budget department of Ministry of Finance, the money keeps accumulating on a salary account in
the Treasury (Salary balances).

The point of concern is that in the testimony of Mr Kiggundu (ACA MOD), it was stated that accumulated salary balances on the salary account in the treasury can be easily accessed by increasing the strength of UPDF. This leaves room for manipulation of strength for purposes of accessing these balances to the personal benefit of those controlling the strength and accounts in MOD/UPDF. Worse still, the Permanent Secretary MOD told the Committee that it was very difficult to access these balances and it is obvious he does not have enough knowledge about this account. The US-F&A seemed not to know the existence of these accounts.

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