A team from the Office of the Auditor General yesterday launched its investigations into the Bank of Uganda for liquidating and presiding over the sale of several defunct banks such as Crane Bank and National Bank of Commerce. Eagle online understands BOU Deputy Director Dr. Louis Kasekende has been trying so much to block investigations, including approaching the Auditor General.
But finally On May 15, 2018, the Auditor General John F.S.Muwanga wrote to the Bank of Uganda Governor Prof. Emmanuel Tumusiime-Mutebile informing him that his team would be resuming the exercise commencing on Thursday May 17,2018, as advised by speaker Rebecca Kadaga on May 10, 2018.
“I have received the clarification from the Right Hon. Speaker in a letter ref AP116/161/01 dated 10th May, 2018 and copied to you guiding me to proceed with the audit and submit the report to Parliament as required by law,” Muwanga said in his letter to Mutebile.
The Auditor General has asked BOU Governor to provide the team with the necessary cooperation as investigations go on.
Muwanga has copied the same letter to the Solicitor General Francis Atoke who is on record for advising top management and the BOU not to cooperate with investigators from the Office of the Attorney General as well as parliament on the account that the investigations could affect the case between BOU and Crane Bank. It is yet to be heard in court.
On April 26, 2018, MP Abdu Katuntu, the Chairman of the Committee on Commission, Statutory Authorities and State Enterprises (COSASE) wrote to the Speaker of Parliament, informing her of why his committee wanted the Office of the Auditor General to do a special audit of the defunct banks. The committee had established that there has never been any audit on defunct banks which were taken over by BOU.
“There was never any report by Bank of Uganda on all the defunct banks. It has been over 20 years since some of these banks were taken over by Bank of Uganda,” Katuntu.
Katuntu in the letter said an interim draft report submitted by the Auditor General on April 10, 2018 “raises very disturbing findings” even as Bank of Uganda refused the auditors to access any information in regard to two banks-Crane Bank and National Bank of Commerce. The report was a result of a brief audit of the other defunct banks.
“Without prejudice, the interim/draft report clearly raises issues that should attract the attention of a serious institution,” Katuntu said.
In his April 26 letter to Speaker Kadaga Katuntu accused BOU Deputy Governor Dr. Louis Kasekende of trying to use parliamentary processes to stop the investigations on defunct banks by the Auditor General.
“The audit process directed by Committee has nothing to do with the Bank of Uganda roles in the supervision of the financial institutions. Therefore it is wrong for the Deputy Governor to insinuate that the Committee’s directive is a contradiction of the speaker,” he said adding that the Auditor General has a constitutional duty to audit all public entities.
On August 3, 2017, the Deputy Speaker of Parliament Jacob Oulanya penned a directive to the house saying: “Please note that the motion to investigate Bank of Uganda over its role in the supervision of financial institutions has been deferred. Parliament shall continue monitoring the progress of the case.” Dr Kasekende tried to use this statement to frustrate the Auditor General’s investigations.
Katuntu urges that: “We shall be setting a terrible precedent to have public institutions decide what shall be audited.”
In the Letter dated November 28, 2017, Katuntu wrote to the Auditor General calling for a special audit on defunct banks, saying that, COSASE, while interacting with Bank of Uganda noted with concern that there was no accountability on closed banks in the country.
“The members noted that is a very serious matter which needs to be addressed urgently to manage the challenges in the financial sector. This is therefore to request you undertake a special audit on the closure of commercial banks by Bank of Uganda,” Katuntu the Chairman of COSASE wrote.
The committee wants the Auditor General to investigate issues such as; Status on the banks on closure, cost of liquidation, assets and liabilities of the said banks at closure and current status, non-performing assets, non-recoverable assets and who is recovering the assets.The report was supposed to be submitted by March 2018.