The Inspector General of Government (IGG), Beti Kamya, has released a report of investigations into allegations of mismanagement, abuse of office and corruption by the former National Social Security Fund (NSSF) Managing Director, Richard Byarugaba.
The report recommends that Byarugaba and Stevens Mwanje, the Director of Finance, jointly refund over Shs5bn lost by the Fund due to their alleged mismanagement or face prosecution.
The details are contained in a June 29, 2023, cover letter addressed to Hon Betty Amongi Ongom, the Minister of Gender, Labour and Social Development.
While releasing the report, Kamya said during the course of investigations, the IG received a copy of a petition to the President by a group calling themselves “Representatives of Workers, NSSF Savers and Labour Unions”.
Her report recommends prosecution, recovery of finds, amendment of laws and administrative action against Byarugaba and Mwanje.
According to the report, the refusal by Byarugaba to include the minister’s proposal in the budget for the board’s approval was an act of insubordination which should have been handled with NSSF’s disciplinary policy.
However, the report also suggests that the minister’s uncontrolled power over the budget needs to be regulated by amending section 29(3) of the NSSF Act.
According to Kamya, NSSF’s budget to acquire land in Nakigalala, Wakiso district remained at Shs250bn for three consecutive financial years (2019-2023) and was not inflated to Shs400bn as alleged.
“The managing director illegally engineered the resignation of two board members to accommodate the minister’s directive at the cost of the fund (Shs687m),” Kamya noted.
She went on: “Mr Byarugaba and Mr Stevens Mwanje, the Director of Finance, ought to have advised the minister that the only way the board could be reconstituted was if a vacancy on the board occurred through section 3 (3)(4) of the act. They should, therefore, jointly refund the money paid to the two board members who resigned from the board of their own volition.”
The two further caused the fund a financial loss of Shs4.4bn when they authorised irregular payments to staff who exited under voluntary retirement, an exit package not backed by the law.
“They should jointly refund this money,” Kamya directed.
Byarugaba was the Chief Executive Officer (CEO) of NSSF for 12 years having been appointed to the position of Managing Director in 2010.
The report, however, observes that during his tenure of office, the fund recorded a remarkable growth of accumulated contributions and net worth from approximately Shs1.7 trillion to approximately Shs17 trillion (922%).
“Although he made some costly management and financial decisions, they pale compared to the robust status of the fund during his administration which happens to be the core mandate and key performance indicator of the fund’s chief executive officer,” Kamya stated.
She added: “It is important, though, to tighten through legislative amendments to the NSSF Act, the loose ends that enabled the losses to ensure that those loopholes that caused the losses are closed.”