UEGCL saga: Muhakanizi audit blocked

The dossier claims Isabalija was the reason Prof. Togboa, the then CEO and Manager Finance and Administration lost their jobs. Fired CEO, John Magyenzi and Manager Finance and Administration, Emmanuel Lubandi sued the power generator for unfair, illegal, and malicious dismissal.

“The summary termination of the services of the CEO and manager finance without going through the disciplinary process provided for by the human resources manual, their employment contracts and the Employment Act was unlawful and unfair,” the whistleblower report reads in part.

Inspector General of Government Irene Mulyagonja last year said the Isabalija-led board sacked the officials irregularly.

Since the termination of the two was still the subject of civil proceedings at the Industrial Court, Mulyagonja desisted from making recommendations. The duo was sacked in 2014 over accusations they caused financial loss of Shs103 million as a result of premature retirement of the company’s fixed deposits.

The IGG’s investigations, however, found that there was no policy or guidelines at UEGCL on management of fixed deposits.

Because of these circumstances, Court advised UEGCL to seek a negotiated agreement with the aggrieved parties after looking at the IGG report, but officials snubbed the out of court settlement.

Such actions show that UEGCL possibly believe they can afford to be dismissive because they are being falsely accused. On the other hand, they could be the actions of a guilty party attempting a bluff. Either way, only a transparent accountability process will quell public fears about corruption in the energy sector.

Issues raised in the dossier;

• Isabalija was the reason Prof. Togboa, the then CEO, John Mugyenzi and Manager Finance and Administration, Emmanuel Lubandi, lost their jobs.
• On July 9 2015, the CFO transferred Shs. 1.5 billion from the company’s shillings account to a dollar account in Standard Chartered Bank causing the tax payer financial loss of Shs. 136 million.
• On Dec. 18 2015, Shs. 10m was spent on facilitation for document preparation for the loans of the planned 44.7 MW Muzizi dam.
• On Dec 21, Shs. 35 million was spent on facilitating the committee to approve Muzizi loans.
• On May 6 2016, Shs. 42 million was spent on facilitating external auditors
• In Aug. 2016, Shs. 40 million was spent on facilitating the committee of parliament who toured Karuma and Isimba.
• The company spends excessively on consultants, some of which it procures irregularly.
• One trip to Canada by the seven board members cost the company Shs. 130 million in air tickets plus $70,000 in allowances.
• Between Sept.2015 and Sept. 2016, the dossier notes, the board had paid itself Shs. 1 billion in form of travel and sitting allowances.
• UEGCL irregularly procured the internal audit function to a private company—M/s AH Consulting, which is paid Shs.40 million. AH Consulting was also sponsored for training at a cost of Shs.40 million. The Internal auditor was being paid Shs. 7 million.
• The cost of insurance shot from Shs. 100 million in 2014 to 600 million the following year without any significant addition to assets.
• Excessive expenditure on office partitioning—apparently, Shs. 1.2 billion.
• A drastic fall of cash held on the fixed deposit account from Shs. 12 billion to about Shs. 4 billion in a space of two years.
• Officials flouted procurement rules while acquiring the UEGCL building in Kamwokya. Apparently, the company borrowed some Shs. 8.6 billion at an interest rate of 15 percent yet it could have borrowed from the fixed deposit account at 10 percent.

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editor@independent.co.ug