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BoU scandals: Board members disown Mutebile over irregular appointment of staff

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A confidential Report of the Presidential Tripartite Committee that was formed by President Yoweri Museveni to investigate the Bank of Uganda (BoU) Governor Prof. Emmanuel Tumusiime-Mutebile over his unilateral decision to recruit and make staff changes as announced on February 7, 2018, says the board members interviewed disassociated themselves from that decision and said Mutebile violated the Bank of Uganda Act when he took the decision without involving all members of the board and senior management.

“When the Committee interfaced with both current and former members of the Board of Directors and from the interactions the Committee noted a number of proposals and observations relevant to the situation prevailing at the Central Bank. It was noted that none of the current board members were aware of the Governor’s decision prior to the communication made on 7th February, 2018,” the report notes.

The committee appointed by Museveni included to do the investigation; MP Abdu Katuntu (MP) – Chairperson, Anita Among – Member, MP Michael Tusiime – Member, MP Elijah Okupa – Member, Lady Justice Irene Mulyagonja Kakooza (IGG) – Member, David Makumbi (IG Staff) – Member, Justus Kareebi (IG Staff) – Member, Sarah Birungi (IG Staff) – Committee Secretary, Judy Obitre-Gama (BOU Board) – Member and Keith Muhakanizi (BOU Board) – Member.

According to the report, in one board member’s opinion, Mutebile had acted in violation of the BoU Act when he acted unilaterally to recruit new members of staff. “There was also concern that the Governor had irregularly transferred the Chief Internal Auditor which was a preserve of the Audit and Governance Committee of the Board,” report says.

The board members, according to the report, blamed Mutebile for appointing and transferring various staff to positions that did not officially exist in the bank’s structure. Further, the report says the Human Resource and Remuneration Committee of the Board disowned Mutebile, saying they had no input at all in the staff changes.

The report further notes that one board member observed that the Governor had premised the changes communicated in his memo on the policy on staff rotation which was misleading. This was because the actual changes also involved recruitment.

3.29 Another board member, the report notes, was of the view that there was a culture of not adhering to procedures at the Bank and that this had led to a loss of confidence of the staff in the senior leadership. “It was observed as being distrustful of internal grievance mechanisms. It was further opined that the recruitments conducted by the Governor were in error, against policy and outside of the existing structure,” it says.

The report further says that board members disregarded the requirement by the Governor that new appointees take over office immediately, saying it was uncalled for especially with regard to the position of the former Executive Director Supervision Justine Bagyenda who was already due to retire before she was replace by Dr. Twinemanzi Tumubweine who didn’t meet the experience required of that job.

“Another Board member expressed the view that the Governor’s reliance on a board resolution made in 2012 with regard to delegation of the functions of the Board to the Governor was misguided. This was because the resolution in question was framed in the context of the expiry of a particular board’s term and not in perpetuity.”

It was opined that the role and powers of the Governor and Deputy Governor were not stated in the existing laws and that there was a need for an additional slot of Deputy Governor. However, “a board member defended the Succession Policy at the bank as relevant in as much as it served as a talent management pool and helped with the effective filling of gaps created upon retirement or other departure of staff.”

The board members interviewed apart from Mutebile were; Dr. Louis Kasekende-Deputy Governor/Deputy Chairperson, Mr. Keith Muhakanizi- Member , Ms. Judy Obitre-Gama- Member, Dr. William Kalema-Member, Mr. James Kahooza- Member, Ms. Josephine Okwi Ossiya-Member and Mrs. Susan W. Kanyemibwa, Bank Secretary/Board Secretary.

The Committee also interviewed former Board members who expressed some views as follows:

That the current legal regime whereby the Governor is also the Chairman of the Board of Directors is problematic as it raises conflict of interest issues. They called for the creation of an extra position of Deputy Governor to allow for at least one Deputy to be exclusively tasked with operational matters in the Bank while the Governor and the other Deputy concentrate on monetary policy and other core functions.

“The creation of an extra slot of Deputy Governor also ensures that there is no time where senior staff below the rank of Deputy Governor get involved in the duties of the Governor or the Deputies,” they argued, according to the report.

The report says the former board members did not approve of Tumubweine replacing Bagyenda, arguing that Bank supervision requires persons who are highly experienced preferably with experience in commercial banking. Mutebile handpicked Tumubweine from the Uganda Communication Commission where he was working as he served as the Director of Industry Affairs and Content (Economic Affairs).

The reports says Mutebile justified his decision to recruit and promote staff on the grounds that he was acting with the authority of the Board delegated to him as Chairperson of the Board by virtue of a resolution of the Board of Directors at its 311st Meeting held on May 30, 2012. The Governor explained that according to that resolution he had delegated authority in the absence of a fully constituted Board to approve all matters that required Board consideration and approval. However board members dismissed this argument.

The former BoU board members, according to the report, called for the formation of a regular consultative forum where former Governors and Deputy Governors are able to meet with current office holders to discuss current affairs and to exchange ideas on how best to ensure optimal performance of the central bank.

Former board members interviewed were; Mr. Leo Kibirango-Governor , Dr. Ezra Suruma-Deputy Governor, Mr. Perez Bukumunhe- Deputy Governor , Mr. Robert Elangot-Deputy Governor and Mr. Opio Okello- Acting Deputy Governor

“The majority of the senior staff members interviewed tended to agree that there were factions or cliques in the Bank polarized around the positions of the Governor and the Deputy Governor,” says the report.

On concerns about the existence of cliques, one staff went further to characterize the cliques as potentially religious-based. In the words of the staff in question, “There is a risk of divisions according to religion in that Bank. Catholics and Anglicans have their own groups. They have meetings and each has its own power.”

Yet all the 60 staff interviewed indicated that the changes made by the Governor were a complete surprise. “Staff indicated a loss of confidence on account of unclear implementation or disregard of human resource policies especially with regard to succession. It was felt that policy is applied selectively,” says the report.

According to the report, all the staff by the committee interviewed indicated that the changes made by the Governor were a complete surprise.

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