The scandals in OPM and the ministry of Public Service show a breakdown of the government’s financial management system
Two scandals were exposed in Uganda simultaneously as 2012 came to an end; one in the Office of the Prime Minister (OPM), the other in the Ministry of Public Service. Since then, public anger and debate in the press has focused on the theft in OPM with calls for the resignation of the Permanent Secretary (PS), Pius Bigirimana.
Meanwhile, there has been very little public debate on the theft in the Ministry of Public Service. OPM lost Shs 60 billion in its theft. The Ministry of Public Service lost Shs 340 billion to ghost pensioners. Although all theft is bad, one would have expected our nation’s chattering class to be more outraged about Public Service pensions than OPM. Why do we hear only mummers about Public Service?
For the political class of Uganda, there is limited moral outrage at corruption. Corruption only makes sense when there is an opportunity to score political points and win cheap popularity or fight petty squabbles.
Thus, the most titanic battles against corruption revolve around power. Opposition politicians see it as an opportunity to discredit the sitting government. NRM politicians see at as an opportunity to fight rivals in internal struggles for power. Meanwhile there is little or no independent activism whose aim is to separate partisan politics from the problem at hand. This is perhaps the biggest challenge facing efforts to fight corruption.
It seems Bigirimana – whatever his personal and professional faults – stands in this crossfire between different but competing factions around the power structure of Uganda. The OPM scandal has dominated our nation’s public debate far out of proportion to the actual monies stolen because in that office sit two very powerful politicians – the First Lady, Mrs. Janet Museveni and the Prime Minister, Amama Mbabazi.
Hence, from the vantage point of the opposition, it is important to focus their attack on that office if only to try to find something wrong either of those two politicians did. That would be a public relations coup. Of course that is good political tactics – in politics anything that shames your rival is good for you. Even inside NRM, rival factions abound.
Rumor has it that the First Lady and the Prime Minister are not the best of friends – to put it mildly. Anyone of them or the factions that support either side may want to tarnish and therefore bring down the other. Bigirimana stands in the midst this crossfire as well. The Mbabazi group may suspect that Bigirimana is close to the First Lady and therefore see this in his every move and word. Mrs. Museveni’s faction may then see attacks on Birigimana as an attempt to expose her flank. Then she may leverage the president to defend the PS. If Bigirima finally falls, therefore, it will have more to do with politics than his misdeeds.
For ordinary citizens, the debate on corruption – as expected – has been driven by the desire to punish the named and shamed. It has shade little light on the crux of matter, that is, that these scandals demonstrate the collapse of the government’s financial management system. The most radical political solution to the problem would have been to ask the entire government to resign; another would be to fire all the top officials in the concerned ministries plus the office of the Accountant General, the Auditor General (AG), Bank of Uganda, and internal audit in the ministry of finance, and others.
To demonstrate this point, let us deal with the facts of OPM. According to the Auditor General’s report, Chris Lubega, a systems administrator for the Integrated Financial Management System (IFMS) at Bank of Uganda gave the then-principle accountant in OPM, Geoffrey Kazinda, the powers of the PS (accounting officer) to sign and approve expenditures in the ministry on specific dormant accounts.
Then the Accountant General, Gustavo Bwochi, transferred money from a donor account bypassing the Consolidated Fund, directly to the said dormant account in the ministry of public service directly controlled by Kazinda. On this basis, Kazinda proceeded to spend Shs 16.2 billion as he wished. Yet the government has elaborate internal controls to stop such theft.
For example, the rules say that for such monies to be paid out, they would have to be approved by internal audit officer in the ministry appointed and supervised by the Accountant General in the ministry of finance. Secondly, before the central bank can honour a cheque, it has to ensure that the signature on paper is the same as the specimen signature in their records.
Before paying money out of government accounts, the officials in the BOU are required to call the PS in the ministry and confirm on telephone that he signed the said cheques. After spending the money, the Auditor General’s office is supposed to establish whether all these procedures were followed.
In the case of OPM, the internal auditor in OPM, even if Lubega had illegally granted Kazinda powers of the PS within the IFMS, would not have passed the Principle Accountant’s payments because he could see the signature of the PS was forged. If Kazinda colluded with the internal auditor in OPM, the people at BOU would have seen the signatures as forged. If they lacked proper eyesight to establish this, they would have exposed the fraud had they followed the rules and called the PS to confirm on phone. Instead, they would call Kazinda who would confirm his forgery.
Many critics of Bigirimana miss this point that is very clear in the Auditor General’s report i.e. that some ministry of Finance and BOU officials had illegally appointed Kazinda a PS with powers to approve payments in the IFMS and also confirm cheques on phone.
Why would it have been difficult for Bigirimana to establish the scandal that was brewing under his nose?
Besides he personally approved some expenditure from this account. It is possible Bigirimana may not have noticed the account where the money he was spending was coming from. With a meticulous First Lady and a workaholic Prime Minister, a Deputy Prime Minister, six ministers and five ministers of state to attend to plus numerous policy matters to handle for all these powerful men and women, Bigirimana is an overstretched man.
It would take superhuman genius in such circumstances to cross-check every voucher and satisfy oneself that every “i” is doted and every “t” is crossed. In fact, government should separate the job of accounting officer in OPM from that of the PS as is the case in the ministry of Finance.
Bigirimana could have succeeded at this tedious micro-management tool of closely scrutinising every voucher Kazinda brought for signing at the price of doing nothing else. In such circumstances, most of us in charge of approving payments trust that the officers you are working with have checked the payments for you. The other control for Bigirimana would have been by examining monthly bank reconciliations. Yet as the Auditor General report shows, Kazinda as principle accountant was the person in charge of getting bank statements from BOU and handling all bank reconciliations and show them to the PS. He was supposed to also bring the balances to the PS.
However, he would collude with officials of BOU to manipulate reconciliations so that Birigimana was not getting a clear financial picture of the funds available in the OPM. So Kazinda would give Bigirimana what he, Kazinda, wanted his PS to see. It is difficult, from the Auditor General’s report, to see deliberate fraud on the part of Bigirimana. Perhaps he can be accused of professional negligence and or incompetence.
If Bigirimana did anything fraudulent, it is unlikely to have been with Kazinda. The two never had a good working relationship. Bigirimana was appointed PS OPM October 2008. Kazinda was already there. On 11 January 2011, Bigirimana wrote a strongly worded letter to Kazinda accusing him of indiscipline. Later in the month, on January 28, he wrote another to Bwochi, the Accountant General, complaining about Kazinda. Bwochi never replied. Instead on February 1, 2011 Lubega secretly gave powers of approval of payments to Kazinda effectively giving OPM two Permanent Secretaries.
December 2011, Bwochi transferred Shs20 billion from PRDP account to a ‘Crisis Management Account’ without knowledge of the PS. When I interviewed Bigirimana, he said he first noticed the account when Kazinda brought him papers for approval of spending. He realised there is a lot of money on the particular account which he did not know.
Bigirimana claimed that when he asked how such money came to be on the account, Kazinda produced letters from him (Bigirimana) to the Ministry of Finance asking for money for new ministers sent to OPM after the 2011 cabinet reshuffle and for disaster relief. Finance had replied saying look within your vote for money to meet these expenditures whereupon Bwochi, perhaps working with Kazinda, had transferred large amounts of donor money to the dormant account.
In February 27, 2012, Kazinda was transferred from OPM to the Ministry of Finance. But the Prime Minister wondered why this was happening at a time when ministries are preparing budget queries. Mbabazi asked: “Why doesn’t he wait until end of financial year?” It is then that Bigirimana wrote to Bwochi on February 27 asking Kazinda to stay. Bwochi replied on 28th saying Kazinda should go. Bigirimana left country on 29th. During this time Kazinda maneuvered and went to Mbabazi saying the PS does not like him.
When Bigirimana returned, Mbabazi called Bigirimana, Bwochi, and one Semakula (Commissioner Treasury Services) for a meeting. Mbabazi asked a simple question: Has Kazinda committed any fraud? Bwochi said NO. Mbabazi then said: Let him stay. It is after this that Kazinda goes on rampage of looting with vigour.
In May 2012, Bigirimana again wrote to Bwochi to transfer Kazinda. Bwochi replied saying the PS puts the request in writing given the instruction of the Prime Minister. Bigirimana did as requested whereupon Bwochi transferred Kazinda to Finance. At this point, Kazinda disappears. The Auditor General wanted documents for the financial year to audit. Bigirimana claims he had been tipped off that Kazinda was carrying files out of office. In the circumstances, Bigirimana called for a forensic audit. He also called on the police to intervene in the matter for a criminal investigation.
Any accountability system in any country, organisation or business is based on certain assumptions about human behavior. For example, it is assumed that officials in a specific government ministry but working in different departments cannot collude. Even if this happens, it is assume that officials e.g. in OPM and those in the IFMS, Accountant General’s office, BOU and Auditor General’s office – all of them – cannot collude on one transaction.
That is why internal auditors in any ministry are appointed and transferred by the Accountant General, who sits in the ministry of Finance. Yet all these assumptions failed i.e. the entire public financial management system actually collapsed.
This situation also obtained in the pensions scam. To be on the register for a pension, the ministry where you retired sends your name to the Ministry of Public Service. There is an elaborate system on how this is supposed to work in your parent ministry. Once that is done, your name goes to the Verification Office under the department of Human Resources. Once it is verified, it goes to the Assessment Office where your gratuity and pension are calculated.
From there it is taken to the Confidential Registry which cross-checks its authenticity before it is taken to the Pension Registry. After that it goes to IT who then give it to Internal Audit to confirm that all procedures are followed before it is submitted to the PS for signature. Once the PS has confirmed, the Principle Accountant can then release the payments.
Even if officials in public service colluded at every level to defraud the taxpayer, they would be caught by the Ministry of Finance’s directorates of Budget, Economic Affairs and the office of the Commissioner Internal Audit. And some of these offices did query these payments.
If all this fails, the Auditor General in the post-spending audit would catch the thieves. In all these fraud cases leading to the loss of Shs 340 billion in pensions over five years, all these layers and procedures failed to work precisely because officials colluded at every level and in every institution – from the ministry of Finance audit department, Public Service, Auditor General’s office etc.
The old man, Jimmy Lwamafa, then-PS in the ministry of public service may not even have been involved in the scam. Perhaps he trusted those under him to be doing the right thing and signed on the ghost payments in the honest belief that the paperwork was good. I do not see how a respected and old civil servant like Lwamafa can collude with people like Christopher Obey and David Oloka to steal Shs 340 billion. Perhaps I am being naïve.
But everyone I have talked to who knows him says Lwamafa could not have been involved in such blatant fraud. What we see here is that once the entire control system collapses, the upright become innocent victims of their colleague’s cunning. However, the most meaningful contribution to recent cases of corruption is to realise that there has been a breakdown in public accountability and that perhaps exceptional measures need to be taken to avoid this continued slide towards ever worse official impunity.
There seems little concerted initiative to fight official corruption in government partly because the government itself, like its finance management system, has broken down. The few fragments of it still functioning work in isolation of one another. And almost across the board, with the possible exception of the Supreme Court, our institutions are significantly compromised. Public officials do better to collude with thieves to get them off the hook than pursue them to conviction.