Kampala- Former workers of two parastatals that were repossessed by the Asian owners have warned the government that taxpayers could lose up to Shs39 billion in inflated compensation payments.
They warn of a well-grafted and syndicated scheme involving senior bureaucrats, to dip their fingers into the public cashbox and scoop billions of shillings under the guise of settling a court ruling.
The ex-workers of Mukisa Foods Ltd and Uganda Rayon Textiles Manufacturers Ltd which were later merged under National Enterprises Corporation (NEC), a commercial arm of the military, sued the government in 2002 after they were retrenched between 1992 and 1993 without benefits.
They won the case after Justice Kibuuka Musoke ruled on August 18, 2011 that the workers were entitled to payment of gratuity in accordance with the contracts between each of them and the government.
Justice Musoke also issued “an order that the first defendant pays to each plaintiff his or her entitlements of gratuity” and also award interest at eight per cent per annum.
Another group of workers also sued the Attorney General who was, however, discomforted with Justice Musoke’s ruling and he asked High Court to review it, citing among other issues, the existence of false claimants on the list.
The matter was again handled by Justice Eldad Mwangusya who also ruled on May 9, 2012 that the workers were entitled to payment of their entitlements.
He also ordered that the government pays “an award of a sum of Shs2 million to each plaintiff as general damages” and also pays the costs of the suit.
However, some of the plaintiffs have petitioned the Inspector General of Government to investigate the veracity of the number of claimants and the Shs46 billion that the government has agreed to pay them.
They reason that while they prayed before court to be awarded Shs7.1 billion as their compensation and costs, they were surprised that the government was processing payment of Shs46 billion to them, making the difference of Shs39 billion suspicious.
“The amount that was awarded is not the amount which is now purportedly going to be paid…,” reads the letter to the IGG.
It added: “…the method of calculation that was used is wrong and illegal as shown in the proposed payment lists.”
The whistleblowers say some of the employees included on the list did not qualify to be compensated as they had not worked for the years required in their contracts to qualify for gratuity while others had long left employment at the time the parastatals folded up.
“…and above all, the majority of them are ghost employees who were only included in the list for purposes of this payment,” reads the petition to the IGG.
They say they know at least 276 beneficiaries who are “either ghosts, deserters, dismissed or those who had resigned their jobs”.
According to documents seen by Sunday Monitor, initially, the petitioners in court were 475 former employees.
But in Justice Mwangusya’s ruling, the plaintiffs had increased to 914. However, according to former Solicitor General, Joseph Matsiko’s letter to the director of the Privatisation Unit, the claimants had increased to 1,017.
Mr Masitko advised in 2006 that the plaintiffs are entitled to payment of terminal benefits and “in view of the above, we suggest that we seriously consider a possibility of an amicable settlement of the suit out of Court”.
His advice was not heeded to and the matter had to be settled in court. One of the petitioners told Sunday Monitor that their case took long to be resolved because “at various stages, we suspect the government side wanted to gain from it”.
The IGG, Justice Irene Mulyagonja, confirmed to Sunday Monitor that she had received a complaint of “ghosts” being lined up for compensation but said the law limited her powers in terms of matters that have gone through the court process.
Ms Mulyagonja instead wrote to the Auditor General, Mr John Muwanga, asking him to audit the list of beneficiaries to validate genuine beneficiaries before any payment is made by the government.
“The Inspectorate of Government has received a complaint alleging that the total amount of compensation due to former employees of NEC has increased from Shs7.1 billion to Shs46 billion because several ghost claimants have been included on the list of beneficiaries,” reads Ms Mulyangonja’s letter.
However, the petitioners have written another letter to the IGG saying that “we still think that the complaint should be handled by your office because the fraudulent list of claimants was audited by the Auditor General”.
Lost trust in AG
They believe that the Auditor General had lost their trust in the matter because he sanctioned the contested list which is now a basis of government paying more money to nonexistent claimants.
But Ms Mulyagonja said that while she appreciates the trust the petitioners had placed on the IGG, some investigations are prohibited under Section 19 of the IGG Act, especially those that arise from court judgments.
“I referred them to the Auditor General for a better service which will not be challenged. Our hands
are tied,” she told this newspaper.
Asked if the Auditor General who cleared the contested list would easily do a professional job after his office’s work has been challenged, Ms Mulyagonja said: “I think the Auditor General has the capacity to review his past decision by drawing back to see how he can discover the ghosts.”The petitioners allege that the suspicious beneficiaries were created by giving them appointment letters to depict them as having worked under NEC while some amounts to be paid to beneficiaries were exaggerated.
They allege that the syndicated scam involved well thought out and planned network of lawyers and bureaucrats and some military officers.
NEC under the army took over Mukisa Foods and Rayon textiles.
We have obtained a copy of the list of beneficiaries and amounts due to each of them ranges from Shs2 million to Shs95 million.
Sunday Monitor tried for two days to reach Mr Muwanga, the auditor general, but he was unavailable.
His publicist, Martin Abila promised to contact him or the director in the office who handled the matter and later get back to us with a comment. He, however, did not get back.
TREASURY TAKE
Deputy Secretary to the Treasury Patrick Ocailap said the suspected non existent beneficiaries should be pointed to them so that they cross-check, otherwise they could go ahead and pay because the Treasury acts on the basis of authority.
“We are obliged to comply with clearance given by a competent authority, therefore; let the concerned citizens point out the false claimants early if the payment has not already been made,” he said.
Mr. Ocailap said the Treasury was faced with similar challenges involving the payment of non existent teachers and implementation of “very many court judgments.”
A source in the Ministry of Finance told Sunday Monitor that Shs1.5 billion had earlier been paid to alleged ex-workers before the court ruling which is now a basis of the planned payment of the contested Shs46 billion.
Similar ghost payment scam
The payment of nonexistent public servants had plagued the country for a while with Ministries of Public Service and Finance deeply immersed in the controversy.
In December last year, a huge sum of the Shs70 billion that government paid out in pension since January of the same year was discovered to have gone to non existent pensioners.
The scandal was exposed by a letter from Crane Bank to the Permanent Secretary of the Ministry of Public Service.
The letter contained a list of pension beneficiaries to be paid through the bank. The bank doubted the validity of 396 names out of the 769 indicated beneficiaries whose money was sent to the financial institution.