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Monday, June 5, 2017

#EAC drowns in corruption as they choose most corrupt leader - #Uganda #Museveni


EAC secretariat riddled with fraud as staff drench in cash.
By Alon Mwesigwa
There is an unquenched thirst to dangle dollars by the East African Community secretariat staff, which has prompted donors to run away, writes ALON MWESIGWA.

All is not well at the East African Community Secretariat after a report unearthed cases  of money being squandered and flaws in the procurement process.
The report, an investigation into concerns raised by one of the region’s top officials, found that money had disappeared from the general reserve fund of the EAC under unclear circumstances.
The per diem systems where members pay themselves hefty allowances has irked donors, prompting some to pull out funds. In a letter early this month, then deputy secretary general (DSG), planning and infrastructure, Dr Enos Bukuku, raised a red flag to the council of ministers over inappropriate funds transfers, unexplained travel claims, and payments advanced to some secretariat staff who have overrun their contracts.
In particular, Bakuku pointed out that the current secretary general, Amb Liberat Mfumukeko, who is a Burundian diplomat, had sanctioned payments to contract staff and extended their contracts without the approval of the human resource advisory committee. It also accused him of participating in the procurement of an insurance company for the secretariat staff, an exercise that was riddled with fraud.
This triggered an investigation by the permanent secretaries committee from the partner states, led by Edith Mwanje from Uganda. The committee’s findings, published in a report yet to be made public, depict problems at the regional organisation headquarters which has stifled the bloc’s work as donors run away.
On the spot: Amb Liberat Mfumekeko
The PSs found that upon his appointment as SG in March 2016, Mfumukeko went for ten days’ training in France “which did not meet requirement of Regulation 34(1) and (4) [governing the bloc].”
That while there was no budget for such training, he decided to use funds under the Inter-Regional Coordinating Committee (IRCC) support by the European Union, amounting to $20,000, which was earmarked for strengthening the audit unit.
The course was sought and the payment was made within a day, which raised a number of questions such as “why the training fees were paid in cash to the course participant instead of being deposited in the account of the training institution.”
A further search also revealed that the institution the SG purportedly attended did not exist in France, the report said. The report also found that at least $174,922 meant to strengthen the secretariat’s audit unit could not be traced.
Funds amounting to $192,000 from the World Bank for the Financial Sector Development and Regionalization Project was used to pay project staff, contrary to the region’s financial rules.
The report found that the SG travelled more times to Burundi, his home, than any other country in the bloc, raising suspicion on whether he was doing the bloc’s work or not.

PROCUREMENT FLAWS
The report indicated that the secretariat awarded a contract to Liberty Life Assurance Company, Kenya when it was ranked third in evaluation. It found that some secretariat staff had “held secret night meeting with Liberty Life Assurance and awarded the six-month contract to the same company the following day.”
PSs said the extension of Liberty’s contract was irregular since the procurement process had been carried out and the winning bidder recommended within a reasonable time before the expiry of the running contract. The winning bidder was Brittam Insurance.
It was observed that Liberty was paid $308,905 for six months, instead of paying $480,008 for the whole year that Brittam had quoted. 
“The award of the contract led to loss of the Community finances,” said the report. “The SG should be held personally accountable for the loss incurred through the procurement of the insurance company”.
In his defence, Mfumukeko said the whistleblower, Bukuku, “had personal interest on the matter” and there was no wrongdoing. Such misappropriation of funds at the regional level reflects what is happening at the country level.
Apart from Rwanda, all the other EAC partner states – Uganda, Kenya, Burundi and South Sudan – rank dismally low in the Transparency International (TI) corruption index.
It is also a clear indicator that with such corruption at the secretariat, the bloc is bound to make slow progress.  Isaac Shinyekwa, a researcher on regional integration, said most of the people at the secretariat were drawn from local people in partner states, who are likely to carry on the vices at home to regional offices.  


PARTNERSHIP FUND
Another area riddled with fraud is the EAC partnership fund. It was established in 2006 as a basket fund mechanism with annual contribution from donors aimed at supporting EAC programmes towards regional integration.
At the start, the fund had 11 contributing members: Belgium, Canada, Denmark, Finland, France, Germany, Japan, Norway, Sweden, UK and European Union.
The World Bank participated as a non-contributing member while Australia, Italy, Switzerland and Turkey participated as observers. The fund raked in up to $11m annually. However, no sooner had the money hit the account of the fund than the officials at the secretariat shared it in the form of per diem and unnecessary travel expenses.
Most of the donors have since pulled out, with only three donors – Finland, Norway and GIZ (Germany) – still contributing to the fund. Hence, the fund only receives a paltry $1.7m.
Among the reasons given for the withdrawal of the donors contributing to the fund include the fact that they are not happy with the EAC per diem system where much of the funds are used to pay staff and delegates, the report said.
“Donors are not happy with the way funds are being used in the EAC. Some of the concerns raised include the approval process where different people are involved in the approval process and there are no guidelines on who are [to] sign for the funds,” the report said.
The council of ministers, one of the top decision-making bodies at the EAC, directed that the fund be audited and the secretariat submit a performance report. The directives were ignored, the report said.
“Considering the concerns raised by the donors and also exclusion of the partner states from the Steering Committee, there is need for a special audit to be carried out on the Partnership Fund for the last three financial years,” the PSs’ report says.
The committee found that “the signing of cheques by the SG; using project funds to undergo training for himself; and withdrawal of EAC Reserve Fund money to pay project staff salaries all contravene the EAC Financial Rules and Regulations.”
It also found that the travel of the EAC staff has been abused and clear guidelines were needed on travels outside the EAC headquarters.
THE OBSERVER

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