AG Queries Forty-Forty Billion Shillings in Court Payments

A row has erupted between officials in the ministry of Finance and the Auditor General (AG) over the payment of court awards to the tune of more than Shs70b.
Some of the payments being questioned by the AG were apparently ordered for by President Museveni, according to documents from ministry of Finance. For instance, in the payment of Shs23.1b to Victoria General Repairs (EA) Ltd, the President on March 12, 2010, ordered that the company be promptly paid to avoid unnecessary litigation. However, the company later went to court and on May 12, 2015, secured a judgement even as the AG insists that he failed to see the documents.

Although the President’s letter did not make reference to any amounts to be paid, the company through Byenkya, Kihika and Co Advocates took Shs23.1b. The company had earlier petitioned the President in respect of the services rendered and the goods supplied to various government departments between 1979 and 1984, comprising Stock Certificates and Bills of Quantities. However, it’s not clear why this case was allowed to go to court five years later.
Again on February 17 last year, President Museveni instructed that Dr James Rwanyarare be urgently compensated for his ranch which was taken by the government and distributed between wanainchi.
“I am, therefore, directing you to ensure that he is paid his compensation urgently,” reads the President’s letter to the Secretary to Treasury, Mr Keith Muhakanizi, instructing him to liase with the Attorney General to determine the amounts owed to the petitioner.

Although the AG says the payment of Shs3.2b lacked evidence from court, the Ministry of Finance insists there was a certificate of order against government dated November 18, 2010. “Things were hot,” Mr Muhakanizi said, adding that on August 29, 2013, Justice Wilson Musene of the High Court issued a warrant of arrest against him in the matter of payments for Goodman Agencies Ltd and others.
Mr Muhakanizi insists the court settlements are not inflated. “We have saved this country Shs54b. How can anybody say that there was no negotiation and there was overpayment?” Mr Muhakanizi asked.
“I paid on instructions from Court and Attorney General. If any anybody challenges me, he or she is free to go to court,” he added.

Although a new report of the Auditor General to Speaker Rebecca Kadaga found that more than Shs44.7b of taxpayers money was paid without court documents and that only Shs33.3b was backed by evidence-the Mandamus orders, Mr Muhakanizi and the director, budget, Mr Kenneth Mugambe, told Daily Monitor yesterday that the payments were backed by evidence that they were authorised by former Attorney General, Mr Peter Nyombi.
Daily Monitor has seen a June 13, 2013 letter from Mr Nyombi titled: “Settlement of court cases with mandamus orders against government of Uganda” forwarding 13 cases to Mr Muhakanizi and asking him to pay since the cases in question were statutory and charged directly on the Consolidated Fund account and therefore do not require appropriation by Parliament.

“The mandamus order in essence mandates the PS/ST, the custodian of the Consolidated Fund Account, to pay the judgement creditor lest proceedings be initiated against him,” Mr Nyombi wrote. Mr Nyombi, who handled the disputed payments, was reported busy as he neither answered calls nor replied text messages.
Although the information before Parliament is that the entire Shs78.1b was paid as mandamus, Mr Mugambe told Daily Monitor that the Shs44.7b questioned by AG was non-mandamus. Asked why the documents and the explanations were not given to AG, Mr Muhakanizi insisted that “all the documents were given to AG.” Mr John Muwanga, the AG, was not available for a comment.

In his report to Parliament, Mr Muwanga wrote: “I observed that some of the payments totalling Shs44.7b classified as mandamus were not supported by writ of mandamus from the courts of law,” the April 2016 report submitted to Speaker’s office last Friday read in part, adding that “A review of the parent files in the Ministry of Justice and Constitutional Affairs failed to reveal any evidence of the said writ.”
According to sources close to Speaker’s Office, the Auditor General however, indicated in his report copied to the Inspector General of Government (IGG) that he could not verify the authenticity of the documents officials in Treasury presented to him as evidence for the payment of Shs33.3b. The AG also found that some payments were inflated and done prior to negotiations even as Mr Muhakanizi insisted that the negotiation committee he put in place saved taxpayers Shs54b.

Queried beneficiaries
In the case of Picfare Industries Ltd Vs Attorney General, the lawyers, who pursued the payment of Shs6.1b from Treasury were from M/s Fitz Patrick Furah and Co Advocates and M/s Mwesigwa-Rukutana and Co Advocates. The date of the alleged mandamus of this case is captured in the AG report as July 9 2014. In 2001, Picfare Industries sued Uganda Land Commission for misrepresentation and illegal allocation of land comprised in LRV 1306 Folio 11, Plot 24/26 Entebbe Road, Kampala. A consent judgment was entered in favour of the plaintiff in the sum of more than Shs13.2b.

The AG also questioned they payments to Bashaasha and Co Advocates (Shs7b), Bashaasha and Co Advocates (Shs3.1b), Davis Ndyomugabe and Co Advocates (Shs2.3b, Charles Bweranoho (Shs2.1b), Bashasha and Co Advocates (Shs1.6b), Kampala Associated Advocates (Shs647m), Kaahwa, Kafuuzi, Bwiruka and Co Advocates (Shs514.9m) Omara Otubo and Co Advocates (Shs372.5m), Moses Ssali aka Bebe Cool (Shs485m).
Others whose payments were backed with evidence are Ocip Moses and Others (Shs24.4b); Joseph Kanaura and others (Shs2.2b); Kakyoma Farm and Tea Estates Ltd (Shs573.3m).
In the Ocip Moses case, the plaintiffs sought compensation for loss of their livestock when they were forced into IDP camps in Lango during the LRA war in northern Uganda.

The Auditor General also found that in the case of Wilberforce Walusimbi and others Vs Attorney General, there was overpayment of Shs1.4billion. The initial claim was for Shs3.8b as awarded by the courts in HCCS No 469 of 2004. Accordingly, the ministry of Justice and Constitutional affairs proceeded to pay the claimants a total of Shs3b by August 2013, leaving a balance of 739.5m.
However, the AG noted that in the Memorandum of Understanding dated November 29, 2013, between ministry of Finance and Bashasha and Co Advocates, the ministry agreed to pay Shs2.7b in the financial year 2013/14 and 2014/15. The AG was not provided with negotiation minutes.
But Mr Mugambe explained that the initial claim to Wilberforce Walusimbi was settled by Attorney General’s Chambers and that what was passed to Treasury was only Shs8b in respect of accumulated interest. He said this was negotiated to Shs2.7b.

Minister explains
State minister for finance (Planning), Mr David Bahati, told Parliament last week, that some beneficiaries of Shs78 billion had reportedly gone to court trying to block the Auditor General from scrutinising the expenditures the lawmakers led by Mr Nandala Mafabi (Budadiri West) and Ms Cecilia Ogwal (Dokolo Woman) called “suspicious” for lack of court documents.
While Ms Ogwal yesterday asked for time to look for the AG report, Mr Mafabi criticised what he described as “robbery of public funds with impunity” and vowed to ensure that those responsible are compelled to account for Shs44.7b or refund it with interest.
The court orders were transferred to Ministry of finance from Attorney General after court issued orders of mandamus against ST. “We must respect the systems, these payments came through the legal system and we have no control over judicial orders. We have no choice but to pay,” Mr Bahati said. However, it has turned out that the ministry of Finance clearly paid some claimants without court documents.

Last week, Parliament raised the red flag on the payment of about Shs78 billion worth of “suspicious” court awards to various individuals without accompanying court documents. The House later asked the Auditor General to conduct a forensic audit into the payments and report his findings to parliament.
In her minority report on the Supplementary request for the 2014/15 financial year, Ms Ogwal asked Parliament not to approve Shs78.1billion without officials providing evidence they based on to spend public funds. Ms Ogwal’s minority view was supported by MPs across the political spectrum who put Mr Bahati to task to explain the alleged abuse of public funds.
On two occasions, Mr Bahati appeared on the floor of Parliament and insisted that the evidence for payment was available. It was even Mr Bahati who suggested that the Auditor General looks at the payments.

But before the Auditor General completed investigations into the payment of Shs78.1b, Mr Bahati last week returned to Parliament to seek retrospective approval of the suspected expenditures.
The House, however, rejected the minister’s request and reminded him that the expenditures were “suspicious” and that Uganda was not about to end.
This matter is expected to be discussed in Parliament this week.
By press time, the finance minister was expected to make a formal statement in Parliament, responding to the AG’s report and the allegations of a scam in the payment of court awards.