MAKERERE | PROBE | INFRASTRUCTURE
Controversy has marred an out of court settlement entered between Makerere University and National Insurance Cooperation Limited (NIC) in December 2018 after it emerged that the University settled for less than what they were demanding.
Sources who spoke to the New Vision confirmed that the questions have emerged on why the University Secretary Charles Barugahare currently on suspension hastily agreed to an out of court settlement, prompting the University to enter into an agreement with NIC without following through with the necessary approvals from the Ministry of Finance and Parliament.
The New Vision has learnt that as accounting officer, Barugahare was charged overseeing all Court matters involving the University and was responsible for the management of the University's assets and liabilities. Questions have also been raised over the manner in which the University failed to prove its sh16.7bn case that it had earlier claimed.
This is one among many other accusations sources in the University said Barugahare will have to explain after the University Vice Chancellor Prof Barnabas Nawangwe on June 29 sent him on forced leave to pave way for investigations in several allegations, which included the controversial procurement of gowns for the university's 70th graduation ceremony.
On December 21, 2018 the University wrote to the Permanent Secretary Ministry of Finance notifying him of the planned out of court settlement. In the letter, Makerere noted that, "after a series of negotiations, by letter dated June 17, 2017 NIC through its lawyers Shonubi Musoke & Company Advocates proposed to the University a settlement of transferring a commercial property to the University."
Makerere University noted that the Government had an interest, "in this matter since it paid the funds which NIC owed to MURBS with an understanding that the plaintiffs would institute proceedings for recovery of this sum and keep Government updated until this matter is concluded."
However on February 18, 2019 Patrick Ocailap wrote to the Makerere Vice Chancellor Prof. Barnabas Nawangwe acknowledging receipt of the letter requesting that the University uses the proceeds from the commercial property received from NIC to fund University priorities that were not catered for in the budget.
"The Ministry has reviewed and appreciates your submission. However given that shs16.7bn hitherto was spent by Government and was charged on the consolidated Fund, your submission is silent on the documentation regarding the due process which was undertaken, as part of the out of court settlement process, to write off shs8.7billion in accordance with the prevailing procedure," Ocailap indicated.
How the matter arose
In 2011, Makerere University and the registered Trustees of MURBS sued NIC to recover sh16.6bn which was claimed to be funds arising from the staff Deposit Action Plan for Makerere University. The scheme was managed by NIC on behalf of the University.
In 2011 MURBS had successfully led a strike of its members who subscribed to the scheme and compelled the government through the Ministry of Finance to pay the claimed amount of 16.6. In his directive on the matter, President Museveni gave the condition that Makerere University and MURBS would proceed to recover the same amount from NIC.
However, between 2011 and 2018, the matter dragged in Court and Makerere University failed to provide evidence for its claim of 16.6 Bn. On its part, NIC claimed that the total sum owed under the scheme was 6.8bn and a partial judgement on admission was issued by Court in that regard.
In 2018, NIC proposed an Out-Court settlement in the matter where it offered its property comprised in Volume 279, Folio 14, Plot 2A - Kampala as full and final settlement of the case. The property, which houses a five-story building was valued by the Chief Government Valuer at 8.9 Bn.
However the decision to acquire the property in exchange caused Government a loss of around sh9 billion. Ministry of Finance wants the University to explain how they settled for a property whose value was sh8bn less that the stated debt of 16.6 Bn.
Barugahare finds himself on the spot on why he contravened the appointing instrument for Accounting Officers which requires an Accounting Officer to object in writing wherever their superiors require them to perform an act which is against the law and to file such object with the Secretary to the Treasury at the Ministry of Finance
Efforts to get a comment from both the University and Barugahare proved futile as both parties declined to comment on the matter. However sources closer to Barugahare in the University pointed out that he was laying an accusing finger at Nawangwe claiming he forced him to sign off but yet, the Public Finance Management Act prohibits an Accounting Officer from encumbering any asset of an entity without authorization from Parliament.
And where an entity requires to acquire an asset by lease, hire or purchase, the Accounting Officer can only do so with authorization from the Treasury Secretary.