A special committee appointed by President Museveni to quietly investigate the challenges at Bank of Uganda (BoU) has recommended an audit of all human resource at the central bank, a move that could see hundreds lose their jobs.
The findings of the probe will send shock-waves across the central bank where Governor Emmanuel Tumusiime Mutebile and other top leaders headhunted over 600 staff members.
“The Committee recommends that the Board causes a Human Resource Audit of all existing staff of the Bank with a view to ascertaining how many staff have accessed the bank outside of required procedures and to take demonstrable measures to guard against recurrence of such cases,” the report seen by ChimpReports on Friday reads in part.
Due to the increasing press coverage of the contested recruitment of top officials at BoU by Mutebile in 2017, Museveni established a tripartite committee that would bring together the Parliament of Uganda, the Inspectorate of Government and Bank of Uganda, to study the allegations and report back to him in the shortest time possible.
The members of the Committee included MPs Abdu Katuntu (chairperson), Anita Among, Michael Tusiime and Elijah Okupa. Other members were Justice Irene Mulygonja Kakooza (IGG), David Makumbi (IG Staff), Justus Kareebi (IG Staff), Sarah Birungi (IG Staff), Judy Obitre-Gama (BOU Board) and Keith Muhakanizi (BOU Board).
This committee’s mandate was different from COSASE’s, which, coincidentally, was chaired by Katuntu.
The terms of reference included generally considering all issues arising from complaints made to the Inspectorate of Government and Parliament and to specifically determine the legality of actions of the Governor in light of the memo of 7th February 2018 as relate to recruitment, promotions and transfer.
The officials whose appointment at BoU sparked outrage at BoU were Dr. Twinemanzi Tumubweinee, Executive Director Supervision; Mr. Valentine Ojangole, Director Banking; Mr Edward Mugerwa, Director IT Operations Department; Ms. Kande Sabiiti, Procurement Assurance Manager (Director); and Dr. Natamba Bazinzi, Assistant Director Currency Administration in Currency Department .
In his defence, Mutebile said he had observed that the transfer schedule proposed by the Executive Director in charge of Administration had left out a number of staff who met the criteria for transfer.
The Governor further explained that during the same period the Bank was facing a number of challenges particularly in the supervision role.
He highlighted the negative publicity in the media and on the internal side he specifically pointed out failure of relevant officers to conclude and account for resolution of failed banks, concealment of information from him and the Board, challenges especially on the Bank IT systems, finance, staff recruitment, operations, medical services as well as procurement as reflected in both internal and external audit reports and the COSASE oversight reviews.
The Governor also said some staff were due to retire and therefore there was need for appointment of replacement staff to ensure continuity and stability at the Bank.
He highlighted examples of staff like Patrick Byabakama (formerly Chief Internal Auditor), Eliot Mwebya (formerly EDA) and Susan Kanyemibwa (Bank Secretary) who had all been appointed to positions in the bank over periods of three months, six months and one year respectively pending the retirement of their predecessors.
He said the Bank needed to strengthen controls and improve operational efficiency.
He gave the example of a need to have a procurement assurance functions to ensure compliance in the procurement process.
“There was a need to comply with bank policy on staff rotation to improve career resilience of Bank employees,” said Mutebile while interacting with the committee.
With regard to the legality of the decision the Governor placed reliance upon the Bank of Uganda Act and the By-laws created there under.
He referred to Section 28(4) of the Bank of Uganda Act which provides that except as may otherwise be provided in the by-laws of the Bank, all appointments of employees shall be made by the Board.
The Governor then went on to refer to Sections 8(2)(a) and 8(2)(e) of the Bye-laws of the Bank created in 1968 which he said entrusted the Governor with the responsibility of organization and management of the Bank as well as ensuring proper discharge of duties of the other officers and other employees of the Bank.
The Governor also justified his decision 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 30th May 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.
The resolution in question states, “The Board considered and authorized the Governor to consider and approve, subject to ratification by the Board, all matters and issues that would call for Board consideration and approval. This would enable the Bank to continue operating well in the interim when a fully constituted Board would not be in place.”
The Governor’s reliance on the aforementioned resolution arose out of the fact that at the time of his decision of 7th February 2018, four of the members of the Board of Directors were yet to officially assume office.
From a procedural point of view, the Governor placed reliance on various provisions of the Bank of Uganda Administration Manual (October 2015) to justify the different aspects of his decision with regard to promotions, appointments, transfers and creation of new positions.
With regard to staff transfers, the Governor defended his decision as being consistent with Section 6.6.2 of the Administration Manual which provides as follows, “All staff, including officers up to the rank Senior Principal Banking Officers (SPBO) are eligible for transfer across Departments after having served for at least five years, taking into consideration their academic and professional qualifications, career aspirations, training, experiences and technical competencies.”
The Governor also cited Section 22.214.171.124 of the Administration Manual (2005) as authority for staff transfers. The section provides: “Transfers of Head of Directorates, Departments and Divisions shall be approved by the Governor”
Section 4.2.1 provides that all employees of the Bank shall be engaged on such terms and conditions as shall be laid down by the Board. It further provides that the Bank shall recruit and select staff based on its Human Resource Planning, which emphasizes the Bank’s strategic and operational requirements. As much as the Governor said that his decision was to address various challenges that he had identified as Chief Executive Officer, he did not mention how the aspect of recruitment in his decision was consistent with Human Resource Planning.
However, the probe committee said it was hard to see how he respected the policy in that regard as Section 4.2.2 of the Manual provides that inter alia that recruitment and rightsizing of staff in the bank shall be dictated by the work-plan or anticipated human resources gaps.
“The Governor did not tell the Committee how his decision was consistent with the work-plan or how he came to identify human resource gaps. What was instead evident was that he had substituted an earlier policy based process with a different process that was not consistent with existing policy and was also inconsistent with the recommendations made by the Chief Internal Auditor regarding how to correct the errors in the previous policy based process,” the investigation committee reported.
The probe committee said the decision of the Governor of 7th February 2018 was inconsistent with the law and policies and more specifically the Human Resource Policy as enshrined in the Bank of Uganda Administration Manual of October 2015.
“He undertook changes at the Bank which changes ordinarily ought to have been subjected to various procedures in the name of due diligence and accountability. However, in all cases procedures were not followed,” the report reads in part.
“The Governor may indeed exercise authority as Chief Executive Officer and Chairperson of the Board at the Bank but this authority is not exercised in a vacuum. The authority must always be exercised within the parameters of the law and the policies governing Bank of Uganda. As much as the Governor’s decision was intended to correct institutional problems as he stated to the Committee, it was also evident that the approach the Governor used to handle the problems only served to exacerbate the already prevalent issues at the Bank,” the report reads in part.
The committee members said the risk behind disregarding procedures is that it introduces an element of uncertainty about staff about the relevance of processes and leads to suspicion about human resource related decisions being based on factors such as tribe or religion rather than merit.
As much as the Governor claimed that the recruitment was in line with policy, the committee said it was hard to understand what could justify headhunting over 600.
Beyond the recruitment of staff, one of the current Board members, Ms. Obitre Gama made reference to how at some point the Board had conducted an audit of staff and found a significant number of staff on the payroll but without clear designations.
She stated, “If you look at the reports of the CIA (Chief Internal Auditor) on the Human Resource Audit, you will find that there was a problem with the numbers on the establishment and those of the staff on payroll. We found this when we joined the Bank in November 2012. We sought to correct it as the Human Resource Committee so that we do not have a situation where we have staff who are not on the establishment. When we asked how and why this arose, we were told that there were some staff that ended up in something that was generally called the pool. I think that there had been some sort of restructuring and these staff were restructured out but they did not leave. There were those that were staff of the Bank but you could not assign them to any particular position.”
The committee has since determined that the ratification of Externally Recruited Persons should be outsourced to preserve independence of the process.
“The Committee recommends that the ratification of the appointment of externally recruited persons should be handled by the Board of Directors as per their mandate under the Administration Manual and the Constitution. However, due to the prevailing situation characterized by suspicion and mistrust in the bank and in the interests of ensuring that any decision in this regard is free of any perception of bias, the Committee also recommends that the ratification by the Board should involve an independent professional firm that is familiar with recruitment processes,” said the committee.
“This firm would be expected to verify the qualifications and competences of the externally recruited persons against the official bank requirements and present a report to the Board. This firm could be sourced through the Ministry of Finance, Planning and Economic Development to ensure freedom from perception of bias and guard the integrity of the process.”
The Committee also recommended that the “Board of Directors reviews all promotions effected on 7th February 2018 and rectify the departure from the standing policy on recruitments as contained in the Administration Manual and highlighted in this report.”