Germany, UK, Japan suspend refugee funding in Uganda over corruption

Refugee children in Uganda. Courtesy.

The governments of Japan, the United Kingdom (UK) and Germany have suspended direct funding to Uganda’s refugee programme over the government’s failure to react to last year’s corruption scandal.

It emerged last year in February that refugee numbers in Uganda had been deliberately inflated by over 300,000 refugees by aid agencies and Office of the Prime Minister officials. Also, aid resources meant for refugees were stolen by the colluding agencies and government officials.

An audit carried out by the UN’s Office of Internal Oversight Services revealed gross corruption and mismanagement of funds meant for the refugees through corruption, overpayments and double payments for contracts, fraud among others within the UN refugee agency, UNHCR.

The audit carried out between January and May 2018 covered the period between July 1, 2016, and December 31, 2017.

The audit report released on November 28, 2018, made a number of recommendations; including the recovery of several misappropriated funds, review of UNHCR management, corruption and fraud mechanisms, review of UN’s dealings with the government on projects implementation among others. UNHCR swiftly acted on the audit recommendations and had its funding reinstated.

“With 1.2 million refugees, Uganda remains the largest refugee hosting country in Africa, making donor support absolutely vital,” said Cecile Pouilly, UNHCR spokeswoman is quoted by the Irish Times as saying.

Germany said they were disturbed that the Ugandan government has not reacted to the corruption scandal for more than 18 months with Kampala claiming it is still carrying investigations.

“What we are particularly disturbed by is that those who seem to be at the centre of this machination have not faced justice,” said German ambassador to Uganda, Albrecht Conze.

“Germany has voiced concern ever since the scandal was discovered 15 months ago, and I have now joined my British and Japanese colleagues in making a strong point about the Ugandan government’s commitment – which they have given – in clearing up the mess, in bringing justice to those who have embezzled funds...We expect that there will be a visible effort to take care of the consequences that been promised and have not been delivered,” Conze added.

However, Naoyuki Shima, the coordinator of economic operations at the Embassy of Japan in Uganda told The Observer that although he had seen the reports that Japan was suspending funding Uganda’s refugee programme, the reports were not true.

Audit revelations

UNHCR, which spent at least £161 million in Uganda last year according to the audit report, was essentially accused of colluding with the OPM officials to mismanage refugee funds.

Among the discoveries unearthed by the audit, is the handing of $320,000 to OPM to buy land for refugee registration activities yet the government’s own valuation was about $140,000.

After approval by UNHCR, OPM procured a plot of land adjacent to its office for $320,000.

According to UNHCR, the reason for the purchase was to expand the OPM office for refugee registration activities; however, at the time of the audit, the land was being used as a vehicle parking lot.

The auditors concluded that the price paid for the “land was inordinately high” since the government’s own valuer had valued the plot at just $140,000. Similar sized plots in that area, the audit discovered ranged from $110,000 to $165,000.

When requested, OPM was not able to provide to UN auditors the title deed for the land to confirm its ownership, and UNHCR could not demonstrate that sufficient due diligence had been done prior to approving the purchase, such as a needs assessment. UNHCR headquarters was not consulted on this purchase.

Fuel Bonanza

While it’s against policy for the implementers not to derive direct economic benefits from the projects, OPM officials were receiving up to annual allowances of $24,000 from the UNHCR project, and were provided with UNHCR vehicles and fuel allocations.

Such arrangements, the auditors noted, gave rise to a conflict of interest. Prior, in 2016, an external auditor had raised similar concerns regarding fuel expenditures and recommended for the recovery of $250,000.

These irregularities apparently continued into 2017. The auditors discovered that the submitted fuel payment receipts were in exact sequential order from the same fuel pump signed by the same attendant, even though there were gaps of days between fuelling.

Also, none of the fuel requisitions were approved and there were no consumption reports to assess average fuel consumption rate per vehicle while the logbooks of vehicles were not always updated. Particularly, the UNHCR vehicles assigned to OPM recorded excessive fuel usage.

The auditors discovered that OPM paid monthly allowances to 72 possible ‘ghost’ civil servants totalling $283,000 annually. There was no provided documentation to the auditors to substantiate that these civil servants were working on UNHCR projects, as there were no staff contracts, terms of reference or timesheets.

OPM also paid some temporary labourers $147,000 in cash in 2017 but the OISO says it was not clear who had paid the cash and whether receipt was witnessed. UNHCR recorded an expenditure of $211 million in 2017 compared to $129 million spent in 2016 working with 40 partners.

According to the audit report, UNHCR designated up to $31.2 million in 2017 to 31 partners, mainly in the areas of construction, fuel, water trucking, medicines and services. However, the auditors noted that the agency “did not conduct a cost-benefit analysis or an assessment of the capacity of partners to conduct procurement prior to delegating it to them, as required by UNHCR procedures. The agency also did not implement adequate monitoring and management oversight at different levels to ensure compliance with UNHCR procedures.”

As such, the auditors noted, due to this weak monitoring, an unnamed partner approved payments totalling $400,000 to a vendor using supporting document rather than original copies for the construction of communal latrines and temporary waiting shelters.

As a result, the audit found out that the costs were inflated by $63,000 for the procured items in comparison to what was available in the market. Even after the discovery of this financial loss, the audit report notes that no action was taken against the vendor.

In Adjumani, late November, the performance monitoring team concluded that 7 of 10 project activities for all partners were either partially implemented or not implemented and recommended that the project budget for one partner be reduced. No action was taken to address the underperformance and reduce the budget at this partner. The auditors discovered an overpayment for water trucking vendor of over overpayment of $7.7 million out of the $27 million paid to vendors.

OPM hides data

Despite UNHCR’s persistent efforts, OPM did not provide the agency access to registration data for almost three years up to the beginning of 2018 which affected programming, distribution of assistance, resettlement processing, case management, and planning of cash-based interventions, the audit notes.

According to the audit, throughout 2017, information on weaknesses and allegations of irregularities in the OPM registration information were increasing from partners, the World Food Programme and key donors in Uganda, who all questioned the reliability of the registered refugee numbers.

“At all levels and for a number of years, UNHCR was fully aware of the key weaknesses in the registration process and its system, and associated risks.” read the audit.

When contacted, OPM communications advisor to the Prime Minister Julius Mucunguzi promised to get us a contact person but had not sent the phone number by the time of publication.

The observer

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