The office of the IGG has in a summary report , cleared Former National Social Security Fund (NSSF) Managing Director, Richard Byarugaba of 15 allegations that were levelled against him by the Labour Minister Betty Amongi.<\/p>\n\n\n\n
The IGG investigated various allegations of abuse of office, corruption, and mismanagement of the fund by Byarugaba, the NSSF board members and other top managers . <\/p>\n\n\n\n
In its 61-page finding the Office of the IGG said Byarugaba was not culpable but ordered him to refund Ug.Shs.4.5bn that was advanced for trips they didn’t take .<\/p>\n\n\n\n
Mr. Richard Byarugaba and Mr. Stevens Mwanje should refund in equal installments for the loss occasioned to the Fund when they authorized irregular payments to staff who exited under the voluntary early retirement program within a period of six months,\u201d the report reads in part.<\/p>\n\n\n\n
Byarugaba was however absolved of allegations that he used the budget to siphon funds from the NSSF through excessive spending on foreign trips. According to the IGG, there was no evidence to support those claims.<\/p>\n\n\n\n
The following were the IGG findings on the 15 allegations :<\/strong><\/p>\n\n\n\n Allegation :<\/strong>\u00a0The MD made an exaggerated budget of Shs 400bn for purchase of land at Nakigalala. He indicated that this purchase was approved by H.E. the President, the Minister of Finance, Planning and Economic Development, and the NSSF Board, which was not the case. Further, there were ownership disputes over this land.<\/p>\n\n\n\n IGG\u2019s Finding \u2013 False <\/strong><\/p>\n\n\n\n The NSSF budgets for the Financial Years 2019\/20 to 2021\/222 all indicated that NSSF planned to spend Shs 250,000,000,000 for strategic land purchase, under investment capital expenditure.\u00a0<\/p>\n\n\n\n Allegation <\/strong><\/p>\n\n\n\n NSSF performance had been declining over the past four years and there was a declining trend from 32% in 2010 to 11% in June 2022 which was exhibited among others by stagnation of membership of savers over the last five years. <\/p>\n\n\n\n Finding- False <\/strong><\/p>\n\n\n\n NSSF registered an increase of 14,000 new members between 2019 and 2022. The Fund had a total of 1,517,471 members as at July 2022. 701,000 of these were active (making regular contributions).\u00a0<\/p>\n\n\n\n Instead, the total annual contributions made by members increased from Shs\u00a0 688,095,082,000 in 2015 to Shs\u00a0 1,486,439,181,376 in 2022. The accumulated contributions steadily increased from Shs\u00a0 1,659,793,727,000 during FY 2009\/2010 to Shs\u00a0 16,961,837,142,000 during FY 2021\/2022.\u00a0<\/p>\n\n\n\n Allegation 3 <\/strong><\/p>\n\n\n\n The former MD took bribes and commission through waiving of NSSF contributions of workers of the Uganda Railways, Uganda Broadcasting Corporation and arbitrarily reduced penalties that were to be paid by Tororo Cement <\/p>\n\n\n\n Finding \u2013 False <\/strong><\/p>\n\n\n\n In 2008, NSSF filed a suit in the High Court seeking recovery of unremitted contributions, statutory interest and penalties from Uganda Railways Corporation (URC) for the period 1995 to 2001. During the course of the hearing, the then Ministers of Works and Finance intervened in the dispute and the parties entered into a partial consent which was endorsed by the Court on 7th\u00a0February 2013.<\/p>\n\n\n\n Under the consent, URC acknowledged the under remittance and undertook to pay Shs\u00a0 4,893,359,606, being due contributions, interest thereon and a discounted penalty. Initially, the total penalty that URC owed NSSF was Shs\u00a0 25,161,283,831. However, the MD waived 94% of the penalty following an appeal from the Minister for Finance Planning and Economic Development. Shs\u00a0 1,000,000,000 was still outstanding.\u00a0<\/p>\n\n\n\n In 2016, NSSF conducted a compliance Audit on Tororo Cement Ltd which revealed that the firm had NSSF contribution arrears of Shs 1,279,954,284 and a penalty of Shs 3,460,227,863. NSSF and Tororo Cement Limited entered into a settlement deed where it was agreed that the firm would pay Shs 1,279,954,284 to NSSF in four installments and the penalty would be considered for waiver by the MD upon settlement of the payment plan. The firm paid the money as indicated in the deed. <\/p>\n\n\n\n In 2018, NSSF filed a criminal case in the Chief Magistrates Court of Nakawa against Uganda Broadcasting Corporation for recovery of NSSF contribution arrears, interest thereon and penalty that had accumulated as a result of noncompliance. <\/p>\n\n\n\n On 22nd September 2021, a consent judgment was entered between UBC and NSSF to pay the outstanding amounts in installments. UBC was supposed to pay Shs 4,942,741,170 being unremitted monthly standard contributions for the period of November 2005 to September 2016 and Shs 3,749,377,185 as the annual statutory interest accrued on the contributions as at July 2019. It was also agreed that the Fund would waive the accrued penalty of Shs 29,150,077,970. As at January 2023, UBC was still indebted to NSSF to the tune of Shs 11,691,728,081<\/p>\n\n\n\n There was no evidence obtained to support the allegation that Mr. Byarugaba waived NSSF contributions of workers of the Uganda Railways Corporation and Uganda Broadcasting Corporation and arbitrarily reduced the penalty that was levied on Tororo Cement Ltd.<\/p>\n\n\n\n Allegation 4<\/strong><\/p>\n\n\n\n Whether the MD refused to implement the Minister\u2019s and the Board\u2019s proposals in respect of the NSSF budget for the FY 2022\/2023 <\/p>\n\n\n\n Finding \u2013 False. The Minister needed the 6Billion<\/strong><\/p>\n\n\n\n The NSSF Board approved a proposed total budget of Shs 2,267,700,000,000 for the FY 2022\/2023 on 13th May 2022 and it was submitted to the Minister for consideration and approval. <\/p>\n\n\n\n On 16th June 2022, the Minister of Gender Labour and Social Development informed the Chairman that she had approved the budget subject to amendments.<\/p>\n\n\n\n The amendments were deferring Shs 400,000,000,000 and Shs 115,000,000,000 meant for strategic land purchases and the Yusuf Lule road project respectively. She also directed that Shs 6,000,000,000 be provided from the operations budget for strengthening compliance and enhancing partnerships and collaboration through stakeholder engagements. However, the former MD declined to amend the budget to provide for Shs 6,000,000,000 as those activities had already been provided for in the original budget.<\/p>\n\n\n\n Allegation 5 <\/strong><\/p>\n\n\n\n Previous recommendations by the IGG in respect of the sale of land at Bakuli were not implemented<\/p>\n\n\n\n Findings \u2013 False <\/strong><\/p>\n\n\n\n The allegations relating to the irregular disposal of land at Bakuli were investigated under reference HQT\/06\/05\/2013 and a report issued in April 2014. It was established that the land at Plot 434 Namirembe was purchased by NSSF at Shs 650,000,000 in 2008 and disposed of at the same price in 2012. All the I.G recommendations made in this matter were implemented save for these two: <\/p>\n\n\n\n (a) Mr. David Nambale, the former Corporation Secretary should refund Shs 1,570,000 spent on personal telephone calls while he was attending a course in UK. <\/p>\n\n\n\n (b) The Minister of Finance Planning and Economic Development should enforce appropriate sanctions against Mr. Richard Byarugaba for failing in his duty to ensure that the highest value possible was obtained from sale of Plot 434 Namirembe road.<\/p>\n\n\n\n It was established that Mr. David Nambale who was supposed to refund the money had left the Fund by the time the report was issued. The warning that was supposed to be undertaken by the Minister of Finance Planning and Economic Development has now been overtaken by events since Mr. Richard Patrick Byarugaba is no longer in the employment of NSSF.<\/p>\n\n\n\n Allegation 6 <\/strong><\/p>\n\n\n\n The MD and his cohorts like the Head of Investments used the budget as a means of syphoning money out of NSSF through exorbitant expenditure on foreign trips<\/p>\n\n\n\n Finding- False\u00a0<\/strong><\/p>\n\n\n\n There was an increment in the budget for trips from Shs 1,227,251,000 during the FY 2017\/2018 to Shs 3,924,090,000 during the FY 2022\/2023. Generally, the number of days paid for foreign trips depended on the activity such as conferences, trainings and meetings.<\/p>\n\n\n\n However, officers would estimate the number of days required for activities that did not have specific implementation dates such as the East African research trips, due diligence and benchmarking activities. There were several trips where some level of exorbitant spending was detected. These included the following:<\/p>\n\n\n\n (a)\u00a0The East Africa Research trips that are conducted every year involving a team from the Investment Department and the Managing Director travelling to Kenya, Rwanda and Tanzania to conduct market assessment of the region where the Fund has investments. In 2017 a team of 6 people were facilitated to conduct this activity for 10 days at a total cost of USD 47,700. The days further increased to 18 in 2018 and 21 in 2022 at total costs of USD 67,110 and USD 77,070 respectively. The team could have also been reduced to four people.<\/p>\n\n\n\n (b) In August 2017, Mr. Byarugaba Richard and CIO Mr. Gerald Paul Kasaato received a total of USD 7,282 as facilitation to attend to the invitation by the Eastern and Southern Trade Development Bank for an institutional round table on 29th August 2017 and an AGM on 31st August 2017 in Mahe Seychelles. However, Mr. Kasaato did not travel as he had other critical assignments to do during that time. He did not refund the money that had been advanced to him.<\/p>\n\n\n\n (c) In September 2018, the NSSF Managing Director, Mr. Richard Byarugaba was invited by the Africa Investor as a distinguished speaker at the Sovereign Wealth and Pension Fund Leaders\u2019 Summit held in New York on 24th and 25th September 2018. A total of USD 15,363 was advanced to him and the Chief Investment Officer as per diem, air tickets and visa fees for this trip. The hosts of the summit did not facilitate the trip and the cost was borne by the Fund.<\/p>\n\n\n\n (d) In August 2022, a team of 84 staff from the Human Resource and Administration Department travelled to Copthorne Hotel Deira 4* Hotel, Dubai for team building. The total payment by the Fund for the Dubai trip was Shs 339,837,575.<\/p>\n\n\n\n This included payments for the hotel, expenses in Dubai as well as transport to and from Entebbe. NSSF budgets for Shs 2,000,000 for each staff member for team building every year. Each Department decides on how best to utilize their team building budgets. In this particular case, the Human Resource Department utilized its team building allocations for two FYs, namely 2021\/2022 and 2022\/2023.<\/p>\n\n\n\n Allegation <\/strong><\/p>\n\n\n\n The Managing Director, rejected initiatives to scale up registration of new members in Industrial Parks (especially Kapeeka) <\/p>\n\n\n\n Finding- False\u00a0<\/strong><\/p>\n\n\n\n NSSF registered a total of 137 companies in the various Industrial parks in the country, with a total of 12,535 employees and an average of Shs 1,907,000,000 in monthly NSSF contributions. There were 20 entities\/factories in Liao Shen Kapeeka Industrial Park.<\/p>\n\n\n\n By December 2022, NSSF had registered 16 companies operating in the park, with a total of 1,808 employees and an average of Shs 76,171,462 in monthly NSSF contributions. The other four companies in the industrial park were still under construction and not yet operational. <\/p>\n\n\n\n There was no evidence to support the allegation that the MD rejected initiatives proposed by the Minister and other Government officials to scale up registration of new members in industrial parks.<\/p>\n\n\n\n Allegation <\/strong><\/p>\n\n\n\n The Managing Director attempted to defy the President\u2019s directive in regard to the Yusuf Lule road Real Estate Project<\/p>\n\n\n\n Finding \u2013 False\u00a0\u00a0<\/strong><\/p>\n\n\n\n NSSF advertised a pre-qualification notice in March 2020, inviting suitably qualified bidders to submit applications for prequalification for the design and construction of the Yusuf Lule commercial development project. 12 bids were received but only four bidders met the prequalification criteria and were invited to bid. <\/p>\n\n\n\n The Evaluation Committee recommended China Railway Construction Engineering Group Co. Ltd as the best evaluated bidder with a total evaluated bid price of Shs 198,558,921,170.98. This was way above the Shs 123,600,000,000 that the Fund had budgeted for the project and the tendering process was cancelled. <\/p>\n\n\n\n In September 2022, H.E the President directed that M\/s SMS Construction Co. Ltd. be engaged to undertake the construction of the commercial development along Yusuf Lule road. Bid documents were issued to M\/s SMS Construction Co. Ltd on 6th December 2022. The firm submitted the technical and priced bid on 30th January 2023. At the time this investigation commenced, the bids were yet to be evaluated.<\/p>\n\n\n\n The allegation that the MD attempted to defy the President\u2019s directive was not true.<\/p>\n\n\n\n Allegation <\/strong><\/p>\n\n\n\n The former Managing Director\u2019s disciplinary record was wanting<\/p>\n\n\n\n Finding \u2013 False\u00a0\u00a0<\/strong><\/p>\n\n\n\n An analysis of NSSF Board Minutes and discussions held with former and current Board Chairpersons indicated that Mr. Byarugaba was fond of using inappropriate language, lacked respect for fellow Directors and had poor people skills. <\/p>\n\n\n\n On 16th May 2019, Mr. Pius Bigirimana, then a member of the Board made a report on Mr. Byarugaba\u2019s belligerent use of derogatory language and undermining the Board\u2019s Authority where he outlined a history of Mr. Byarugaba\u2019s indiscipline and impunity towards the Board and requested the Board to examine the transgressions and take serious disciplinary action in line with the NSSF Human Resource Manual.<\/p>\n\n\n\n On 21st May 2019, Mr. Richard Byarugaba responded to the allegations made against him and he was cautioned. The Board also hired an Executive Coach to help him improve his people management skills. <\/p>\n\n\n\n There is evidence in subsequent appraisals that his use of inappropriate language and poor people relations persisted.<\/p>\n\n\n\n Allegation <\/strong><\/p>\n\n\n\n There were irregularities in the procurement of the Pension Administration System (PAS) and whether there was a systemic failure that was not addressed <\/p>\n\n\n\n Finding- False <\/strong><\/p>\n\n\n\n NSSF issued an advert for the procurement of a Pension Administration System in June 2018, under open international bidding. The advert attracted five bidders. In February 2019, NSSF signed a contract agreement for delivery of the PAS with M\/s Intrasoft International SA in joint venture with Sybyl Ltd that emerged the best evaluated bidders, at a contract sum of Shs 15,278,352,941. The contract was to be performed within twelve months plus the six (6) months stabilization period. <\/p>\n\n\n\n At the time the PAS went live, the system was not stable and it experienced a lot of challenges. Although it underwent several successful tests, many of the features were not working as expected after going live. The post implementation review report carried out in April 2022 indicated that at the time of Go-Live, the system was marred with multiple challenges. These included concurrent user logins, inadequate controls within member process alterations and delayed statement offset as well as multiple benefits processing. <\/p>\n\n\n\n During the stabilization period, these issues were resolved by the vendor and the system has now stabilized to an acceptable level. However, the Compliance Module has not yet been implemented.<\/p>\n\n\n\n Allegation <\/strong><\/p>\n\n\n\n NSSF staff were conniving with masquerader claimants for the Lubowa Housing land<\/p>\n\n\n\n Finding- False\u00a0<\/strong><\/p>\n\n\n\n NSSF purchased approximately 600 acres of freehold land in Lubowa area on different dates in 2003, 2004 and 2017 and parceled it out in 109 separate certificates of title. The Fund took vacant possession of the land after each purchase.<\/p>\n\n\n\n From about 2006, several disputes and encroachments arose on various portions of the land and the disputes were forwarded to Court for determination. Out of the 14 cases that were forwarded to Court, judgment was delivered in the Fund\u2019s favour in seven cases.<\/p>\n\n\n\n One case was settled through an exgratia payment of Shs 5,000,000 each to three individuals. The other six cases were still in Court, pending hearing. The Fund had not made any other payments to the encroachers apart from the exgratia payment of Shs 15,000,000 and repatriation fee that was paid to the former occupants of the workers\u2019 quarters.<\/p>\n\n\n\n It was not true that the Fund irregularly offered compensation to encroachers on the Fund\u2019s land at Lubowa.<\/p>\n\n\n\n Allegation <\/strong><\/p>\n\n\n\n The MD caused financial loss to the Fund by selling a plot of land in Mbarara City that belonged to the Fund at less than the market value <\/p>\n\n\n\n Findings- False\u00a0<\/strong><\/p>\n\n\n\n On 20th March 2008, NSSF purchased a plot of land in Mbarara from Visa Properties Limited at a purchase price of Shs 110,000,000. The plot was not developed. NSSF later put up the above land for sale citing that it was no longer suitable for development by the Fund.<\/p>\n\n\n\n The land was valued at Shs 315,000,000 and Shs 435,000,000 by the Chief Government Valuer and a private valuer respectively. Only one bid from Mr. Mwijusya Yafeesi with a proposed price of Shs 365,000,000 met the reserve price of Shs 363,000,000. The Committee recommended that the award of contract for the Mbarara plot be made to him. The sale was pending clearance of the Solicitor General and signing of the contract agreement. <\/p>\n\n\n\n The allegation that the MD caused financial loss to the Fund by selling a plot of land in Mbarara City that belonged to the Fund at a price less than the market value was false.<\/p>\n\n\n\n Allegation <\/strong><\/p>\n\n\n\n A kickback was paid to the Managing Director (MD) and the Investment Team of NSSF during the purchase of MTN and Quality Chemicals shares by NSSF<\/p>\n\n\n\n Finding \u2013 False\u00a0<\/strong><\/p>\n\n\n\n NSSF purchased 269,361,386 shares in Quality Chemicals worth Shs 69,091,195,509 in September 2018 and 1,980,000,000 shares in MTN worth Shs 360,000,000,000 in December 2021. Both purchases were done at IPO stage. The purchases were in line with the existing policy and operational framework process at the Fund. The shares were acquired after valuation reports were presented to the MIC and duly approved as required.<\/p>\n\n\n\n There was no evidence to confirm the allegations that a kickback was paid to the MD and the Investment Team of NSSF during the purchase of MTN and Quality Chemicals shares. <\/p>\n\n\n\n Allegation <\/strong><\/p>\n\n\n\n M\/s CATIC Construction Ltd paid a bribe to influence the award of the contract to construct the CITADEM Apartments to the Company<\/p>\n\n\n\n Finding \u2013 False\u00a0<\/strong><\/p>\n\n\n\n In March 2014, NSSF contracted a procurement agent, M\/s Agile Investments Ltd to source for an eligible contractor to undertake the designing and building of Mbuya Housing Estate-Phase II, under open domestic bidding. <\/p>\n\n\n\n M\/s China National Aero Technology International Engineering Corporation and M\/s Infrastructure Design Forum JV emerged the best evaluated bidders with a total evaluated price of Shs 14,534,673,052 inclusive of taxes. NSSF entered into a contract with the firm for designing and building of Mbuya Housing Estate-Phase II on 23rd February, 2016. Analysis of payment records revealed that payments to M\/s CATIC for the works were made between August 2016 and November 2021.<\/p>\n\n\n\n Mr. Mugabi stated that he already owned land in Kagadi with a residential house that he had built while still employed in Kagadi. He modified the house to Seyaya cottages much later after securing employment in Kampala. <\/p>\n\n\n\n There was no evidence to confirm that M\/s CATIC Construction Ltd paid bribes to NSSF to influence the award of the contract for construction of the CITADEM Apartments. <\/p>\n\n\n\n