Pension Scam: Money budgeted for NSSF was paid out to ghosts

PIC Suspects in the Pension scam, Christopher Obey, Kiwanuka Kunsa and  Jimmy Lwamafa  in Anti-corruption court, Kololo

Audit has established that the money originally budgeted for as social security contributions (NSSF) formed part of the money that was paid out to ghosts, the court has heard.

Prosecution led by Barbra Kawuma asked the Anti-Corruption court presided over by Justice Lawrence Gidudu to find that no payment was made to NSSF as per budget.

"The letter from the Chief Administration Office and the Auditor General's reports show that the money was stolen through ghosts who are not traceable. The only people who should account for where the money is ,are the accused persons," She said.

After presenting her final submissions, Kawuma asked court to find the accused persons that committed the said crimes and convict them accordingly.   

The former Public Service Ministry officials who include Jimmy Lwamafa(Permanent secretary), Stephen Kunsa Kiwanuka (director research and development) and Christopher Obey, (principal accountant) were indicted on ten counts of causing financial loss, Abuse of office, corruption, false accounting by public officer, conspiracy to defraud and diversion of public resources.

The charges stem from the alleged fraudulent budgeting of sh88b of civil servants' pension contribution to NSSF knowing that civil servants do not contribute to NSSF.

Kawuma argued that the accused irregularly spent sh88b in the said financial years, adding that Lwamafa and Obey were signatories to the Public Service Electronics Funds Transfer (EFT) salary account, where the said money was released from. She added that the duo also authorized the payments in question.

She argued that Kiwanuka, as head of the Compensation department was aware of the actions of Lwamafa and Obey because he was responsible for budgeting, expenditure and accountability. Kawuma said if Kiwanuka denies taking part in the expenditure, then he neglected his duties without any justifiable cause and asked court to invoke section 19 of the Penal Code Act (PCA) to show that he abetted and aided the crime to enable Obey and Lwamafa to irregularly spend the said money.

Citing section 20 of the Penal Code Act (PCA), she pointed out that when two or more persons form a common intention to prosecute an unlawful purpose in conjunction with one another, each of them is deemed to have committed the offence.

"All the accused had knowledge to believe that their act would cause financial loss to government. The trio budgeted the said money for NSSF to ensure that there were available uncommitted funds to steal," Kawuma noted.

Referring to evidence of prosecution witness nine Dr. Christopher Makanga, she said payments were made to persons who could not be traced in the records of the Ministry save for the personal computers of Obey and that the payments were not backed by personal files or verified and cleared by internal audit.

She submitted that the accused knew that the Ministry of Public Service was not supposed to contribute to NSSF and they ended up furnishing false statements or returns of the money.

This evidence, she said was backed by the testimony of prosecution witness one, Henry Mutegeki, who did another audit in 2015 and was not able to access the records of beneficiaries.

According to court documents, in financial year 2010/2011 and 2011/2012, Ministry of Public Service made budgetary provision of sh44b for NSSF, for each year and the funds were released to the ministry and spent.

She stressed that exhibits tendered in court like the ministerial policy statements prove that the accused spent the said money.

It further reported that the sh44b NSSF budget was utilized by the Public Service Ministry and according to their annual financial statements and the Ministry's quarterly progress reports; the money was expended towards NSSF Social Security contributions.

However, police investigations revealed that no payments were made to NSSF and there were no known beneficiaries at the Public Service Ministry but that it was stolen through ghosts disguised as pension gratuity.

The case was adjourned to September 15, when the defence team is expected to make their submissions in reply to prosecution's allegations.