NSSF Cont. Below is the last part of the Minister of Gender, Labor and Social Development, Hon Betty Amongi`s letter to the NSSF Chairman, in regard to the much-sought contract renewal, of the outgoing MD, Mr. Richard Byarugaba. In this final section, the Minister brings out more allegations against the MD.
So deep so, any ordinary Ugandan knowledgeable of how such big government slots are lost, would safely advise Mr. Byaruhanga to show interest in retiring, and as soon as he can. This stance, in order to foil the looming criminal charges currently being built up against his person. Critically looking at the letter, all issues raised can only, and only be resolved by his announcement to stay away. Or so, that is what we make of it all. Nevertheless, we here below unleash the tail of the 19-page, January 7th 2023-dated dossier….
“Other Corruption Allegations: It is alleged that during the purchase of MTN and quality Chemicals shares by NSSF, there was a kickback that was paid to Richard and the investment team. This was handled through a lawyer whose name shall be availed in confidence to H.E only. (The whistle blower is available). It is alleged that there was a UGX.3 billion that was paid by CATIC Construction as a kickback for construction of Mbuya CIDATEL apartments. This money was paid to both Richard and the head of procurement called Mugabi Gerald. The head of procurement used his share to build a hotel in Kagadi called Hotel Seyaya Courts.
It is alleged that, in 2012, the office of the Inspector General of Government (IGG) made investigations and instructed that Richard Byarugaba should refund some money to the Fund after it was discovered that he caused financial loss to the Fund by selling a plot that was owned by NSSF at Bakuli, at a value less than the value the Fund paid to buy it.
It is alleged that during the sale of a Plot in Mbarara that belonged to the Fund, there was exchange of money after the plot was sold at less than the market value and the difference was given to Richard and the Head of Procurement. Richard used a company called Symbion headed by a Kenyan called Pius, to redesign his house in Mbuya in exchange of business. The company is lined up for a supervision for a contract of the proposed development of Yusuf Lule Road Plot. That is why he wanted to defy H.E the President`s directive to give the contract to SMS contractors.
It’s alleged that the MD waived NSSF contribution for workers of the Uganda Railways and settled for a commission payment. Payment/exchange of money went through the law firm that was owned by Rukutana and Partner at the time. It is alleged that, for Lubowa NSSF Project, 5% of the contract value for each contract was paid in commissions by the contractors to Richard through De-point consultants limited. Henan Gouj Construction also paid 5% for the housing construction project for Temangalo. NB. Two sources who gave briefs for the above allegations are willing to provide proof, when given State protection.
Defying HE Directive: You are well aware that H.E directed the Prime Minister to work with NSSF to allocate the contract for Yusuf Lule Road commercial building to SMS construction company. Despite the clear knowledge of PPDA laws, there was a conspiracy to undermine the directive where an opinion was sourced from AG stating that we cannot implement H.E directive. Several allegations were raised to me in confidence as to why MD wanted to defy H.E directive. I did discuss with you in confidence. It took both Rt. Hon. Prime Minister, myself and ED PPDA to rescue the situation and AG later agreed with us and now we are implementing that directive.
Misrepresentation of Facts to Minister and Board, Defying Lawful Decisions of Board/Minister; Real Estate Budget 400Bn: The MD presented to me a budget for approval, as per the law, for Real Estate totaling UGX943.53Bn, of which one of the items was UGX400Bn for purchase of strategic Land. When I inquired about the Land being purchased at UGX400Bn, he indicated that the land belonged to Madhvani Group of Company, at Nakigalala, and that H.E the President, Hon. Kasaija (MoFPED) and the Board had already approved its purchase. I requested him to avail me H.E the President’s directive, MoFPED and Boards approval, and Ministry of Lands, Housing and Urban Development valuation and Land Titles verification reports.
He never availed them. When I inquired from the Board, they had not approved the purchase of the Land, Hon. Kasaija had also Not approved it as Minister In-charge of Investment, and there was No directive from H.E. A big team then contacted Chief Coordinator OWC complaining about NSSF purchasing their land from Madhvaniirregularly. Mr. Chairman, we agreed that you handle that matter conclusively.
I then wrote to the Minister of Lands, Housing and Urban Development for the Land value, the Minister of State for Lands valued the Land at UGX246Bn Not UGX.400Bn! As you are aware, this matter was equally raised by Chief Coordinator, Operation Wealth Creation (OWC) to the Board, and directly to you the Chair. May I know whether MD has owned up to negligence of his duty that would have placed the Minister and Board in the biggest scandal of the year?
Defying Minister on Approved Budget: Section 29 of the NSSF (Amendment) Act States that the Minister shall approve the Budget of the Fund upon presentation by the Board. The law gives power to the Minister to make amendments as he or she deem fit. For FY2022/23, the Chairman Board of Directors, on behalf of the Board, presented to me the budget estimates as follows: A) Operating Cost UGX.220.886Bn, b) Capital expenditure UGx.14.415Bn, c) Real Estate – UGX943,533Bn, totaling UGX1,178,833B (One trillion, one hundred seventy-eight billion, eight hundred thirty-three million shillings only).
Upon scrutiny, I found areas where H.E and Cabinet had directed for cuts which included UGX5,900Bn for travel abroad and inland, UGX10,007Bn for staff team building, UGX1.3Bn for staff breakfast and lunch, UGX2.5Bn for staff drinking water, fitness and aerobics, UGX423M, for mortgage benefit, UGX2.519Bn, for Petty cash UGX800,480m etc.
I also discovered that there was no budget provided for implementing the new provisions of the Law which require that, all companies with one employee and above must remit their contributions, and introduction of voluntary contribution as per the new law. I then discussed with the Board and we jointly reviewed the budget by reducing from the UGX15Bn on wasteful expenditure for staff as directed by Cabinet and re-allocating UGX6Bn for activities to implement the new laws as per letter from you, Chairman of the Board, articulating the transformation agenda.
We left UGX9bn for staff expenditure. The MD refused to implement the decision of the Board and Minister, even with guidance and explanation from the Deputy Speaker! Instead, he; 1. Provided Money to fly over 80 staff to Dubai in November, 2022 for team building. 2. Refused to adjust the Budget to implement the New Law. 3. Starting a smear campaign that the Minister required the money for her ministry to eat.
The matter ended with a meeting chaired by Hon. Kasaija with the MD, Minister of State for Finance, Hon. Musasizi, UBRA, Officials from MGLSD and the Board Members in which the MD apologized for his actions. The meeting resolved that the UGX6Bn activities are within the law and NSSF should implement it within its activities. However, until his contract expired, the MD had not provided for the money and the activities in NSSF Budget despite board approval.
This matter was discussed at Kapeka during our meeting in which the Chief Coordinator, OWC emphasized the need to prioritize labour related activities within the funds’ activities. Mr. Chairman, the law provides for activities that should be implemented by the Minister. How then will I execute those duties if the MD is not willing to support the Ministry of Labour? How do you intend to handle this?
Defying Advice of Attorney General on a Bill: When we started implementation of the NSSF Amendment Act, 2021, stakeholders realized that one word (contribute) had been used instead of the word (saved/maintained) which had denied the original target group from accessing their Mid-term savings.
The Minister of State for Labour, Employment and Industrial Relations undertook consultations and Attorney General drafted and cleared a new amendment by letter dated 22nd April 2022 for the Bill to be presented to Cabinet. When requested for justification to be attached to the Bill before presentation to Cabinet, the MD declined and brought the same argument he had before. Up to now, the Bill has been shelved, with workers now requesting to petition H.E again, on a matter that was already resolved by government! I need an explanation on how such a scenario will be addressed when his term is renewed!
Record of Indiscipline; Mr. Chairman, generally, you and some Members of the current Board have reported the matter of indiscipline and disrespecting Board decisions, refusing to provide Board with adequate information, concealing information and facts from the Board. You have forwarded to me detailed correspondences from Previous Chairman, Mr. Kaberenge, [and] former PS Ministry of Gender, Mr. Pius Bigirimana.
And in my office, some staff members have petitioned me on the rude manner they are treated including brutal recordings from quarrels between Mr. Richard and former Deputy, Geraldine Ssali (Current PS, Ministry of Trade). Record shows that previous Board and previous Permanent Secretary, Ministry of Gender, Labour and Social Development, Mr. Pius Bigirimana issued him with disciplinary letters on his conduct.
Shielding Facts that Affect Pension Administration System Curtailing Access to Benefits by Workers: I did query UGX54Bn allocation for management of customer satisfaction during the budget approval. I also noted that there are so many complaints from workers related to Pension Administration system which is meant to allow online access to benefits by members of the fund. This was explained away.
However, from the time I took office, I have received so many complaints, some through my Twitter, where members are complaining that: a) Claims continually get stuck at almost every level of benefits processing within the PAS system due to system design failure and workarounds have become the order of the day as the consultants seem to have no solution to this problem. b) Claims “get lost” in the system and reappear randomly, which leads to delays in processing payments of the members. In fact, some members are called back, after long waits, to resubmit their claims. c) Midterm benefit is only 20% of an eligible member’s savings.
When this is paid out through PAS, the system does not deduct the amount for some of the members. Failure to offset midterm payments is a critical anomaly as it poses potential financial loss to the Fund. d) Claims workflows get duplicated by the system and this leads to double payments of members, hence financial loss to the Fund. e) Some claim types have proved impossible to be processed in the PAS, such as survivors (death and invalidity sickness) benefits.
No single claim gets to be processed successfully in PAS without manual intervention. f) Member statements with wrong interest; Over 10,000 statements fall in this category. Whereas the system was supposedly designed to generate Interest automatically, in some instances, it is not able to do so, culminating into production of wrong interest. g) Failure to reconcile Member statements after midterm benefits are paid, and failure for contributions to be reflected on member statements.
Recall that the main justification for investing in PAS [was] for increasing coverage and contributions. Unfortunately, it is the area that has been most negatively impacted by PAS. Before PAS go-live in 2019 – 2021, the average benefits payout TAT had improved to around 7 days but it has since deteriorated to an average of 16 days, with some claim types taking as long as over 3 – 6 months. This is contrary to performance reports and official information shared with the public, the board and the Minister.
Users and members are both equally frustrated by the failure of PAS to deliver on this critical function, and the specific challenges I have highlighted remain unresolved to date. Can you avail me with the measures you are putting in place to rectify this without MD continuously giving us impressive percentages which is not correlating with what is on the ground?
Conclusion: I note that, from the review of stakeholders in the financial sector, Mr. Richard Byarugaba has been a good manager, who has steered the firm and increased its safety and investment portfolio. Equally, the Deputy Managing Director, Mr. Patrick Ayota has been a good leader who has provided key support in running of the Fund.
From my interaction with politically strategic leaders and stakeholders, they assert that, Mr. Richard Byarugaba has remained largely good as a technical investment firm manager with a narrow view of the role of the Fund; majorly focusing on the economic and investment role of the Fund. It is this strength that has made stakeholders tolerate him for this long.
I note that, this time around, however, many people who had previously supported him are more frustrated with him because of his lack of strategic leadership, failure to manage stakeholders appropriately and the arrogant nature of his relations with stakeholders. And yet for me as a leader, I must look at the role of the Fund in a much broader perspective and initiate key programs to stimulate employment growth so as to broaden the base of the Fund and increase the number of members that can contribute to the fund as per the law. Over the few months, you can confirm that he has not yet fully grasped this role which Labour department should play.
On the other hand, as articulated above, quite a number of people have come out with serious allegations against him which requires attention. His behavior reflects a person who believes that he is bigger than the institution and without him, the institution cannot function. This is where the board must exercise its mandate and lead in its oversight role.
The purpose of this letter, therefore, is to notify you that, from the date you recommended the reappointment of Mr. Byarugaba, a number of stakeholders have raised new issues which require your examination. This on top of issues raised by Chief Coordinator, OWC during our meeting on 6/12/2022. This has constrained me from renewing the contract of the Managing Director Mr. Richard Byarugaba until you provide me with concrete responses addressing all the concerns raised above.
Further, there were resolutions reached at Kapeka during the joint board meeting with the Chief Coordinator, OWC on 6/12/22, and other issues on value for money on Real Estate which include among others: 1. Value for money concerns on Pension Towers, Lubowa and other Real Estate Projects which require examination on how the consultants who conducted the feasibility for the project arrived at the findings that informed the investment decision.
How the contractors arrived at the unit cost of the houses, versus how much the Fund will get from the houses with a view to establishing whether the cost that went into the project should have or should not have gone there and more importantly, whether what the contractors were paid for is actually what they delivered on ground in terms of work quality, their own drawings etc… considering allegation that there is a crack already.
Further, examination on whether the payment certificates were cleared irregularly or not (such as before the change/variation orders were approved), what is in the claims and what the project manager cleared for payment versus what is on ground as captured in the measurement sheets and whether there are any inconsistencies.
Whether there was over-payment in terms of what is in the measurement sheets versus what is in the claims that were approved for payment, etc. And provide confirmation from the Board, whether you changed/approved the contract from contractor financing in the original contract, to payment based on certificates. 2, Evaluation on NSSF suspense and dormant accounts where preliminary investigations presented to the Minister so far show that there might be some irregular withdrawals on the dormant accounts and this intelligence has been cemented and given credence by the current case of Uganda Versus Sooka Joseph at the Anti-Corruption Court.
Dormant accounts at the Fund accounts for over 30% of contributors and include savers who are not saving money monthly. There is no activity on their accounts for different reasons. Others are dormant accounts of death of the saver and their next-of-kin not turning up to claim their money. Others are rendered dormant on account of not reaching maturity (the age at which one can access their money by law) yet there is no visible activity on their account.
However, the Sooka case shows there has been a syndicate at the Fund where forgery of identity documents and other sets of documents is done at Nasser Road in Kampala and irregular withdrawals done on these accounts. A forensic audit into these dormant accounts will reveal the nature and extent of the problem, establish how much money was lost by government (since some of that money from dormant accounts should, ordinarily go to the Consolidated Fund via BOU) but if it is “eaten” at the Fund, then Government is the ultimate loser.
I would like to know whether Board members are aware of this case which has been confirmed by internal auditors of the fund, and confirmed by a case sanctioned at the anti-corruption court. 3. Examination of allegations of financial impropriety laid down in the content of my letter, issues of Penson Administration System (PAS) and others. 4 How you will ensure that the resolutions of Kapeka during the joint board meeting of 6th December is implemented. Please, provide responses on the above issues and how you intend to rectify them to enable me reconsider your submission accordingly. In the meantime, I will notify H.E the President on this position.
MOINDREA Amongi Betty Ongom, MP
- Stanley Ndawula is a two and a half decades’ seasoned investigative journalist with a knack for serious crimes investigations and reporting. He’s the Founding Editorial Director and CEO at The Investigator Publications (U) Limited
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