About me.

Andrew M. Mwenda is the founding Managing Editor of The Independent, Uganda’s premier current affairs newsmagazine. One of Foreign Policy magazine 's top 100 Global Thinkers, TED Speaker and Foreign aid Critic

Saturday, May 17, 2014

Holding the IGG to account

How the ombudsman has been misusing her office and thereby undermining its stature and prestige; and what can be done about it

Last week the Inspector General of Government (IGG) issued a report on the dossier submitted to the office by a “whistle blower” regarding “corruption” in the National Social Security Fund (NSSF). The allegations were a collection of personal frustrations from an employee who had been fired from the Fund and wanted to vent his spleen on management. Although to its credit the IGG found nearly all the allegations empty, the implications of its report undermine the ability of the Fund to attract competent managers in the future. Indeed, granting audience to every Tom, Dick and Harry has promoted a culture of impunity by whistle-blowers.

First let me declare a conflict of interest – my name had been mentioned by the whistle blower. The IGG found the claims without merit. I should therefore be prising the office. Yet I find a fundamental flaw with how the Inspectorate is approaching its job. It needs to understand the political economy of Uganda’s complaints against corruption. The power to cancel or block a major contract/tender or subvert the management of an institution in Uganda has been dispersed across many diffuse fragments of the state; the IGG, parliament and its various committees, PPDA, police, intelligence organisations and State House. The assumption is that this creates checks and balances against abuse of power. Yet the reality is that this creates opportunities for corruption and fighting personal vendettas.

The most difficult power to exercise is the power of restraint. The constitution and other enabling laws (the IGG and the Whistle-blower Acts) give enormous powers to the Inspectorate. This power needs to be exercised judiciously. Yet most IGGs (with the exception of Jotham Tumwesigye) have failed to restrain the use of this power.

Uganda needs, as an IGG, a person with a strategic mind; a person who can exercise the power of that office after conscientious examination of the issues involved. The aim would be to insulate the institution from petty complaints many of which can be handled by internal mechanisms within an institution. Therefore even when the IGG technically has powers to investigate certain complaints, the best way might be to refer many of them to the management of the concerned institution.

For example, in the NSSF report, the IGG investigated how the Company Secretary used his official phone while abroad; how the Deputy Managing Director went with per diem of five days yet attended a conference for only two and how the Managing Director sold a plot of land at Shs 650m which had been bought at the same price three years earlier. These matters are beneath the prestige of the office and should have referred them back to the board of NSSF to handle internally. The only justification would be if the inspectorate demonstrates that it referred the complaints to management and it did nothing in spite of repeated requests.

Secondly, the IGG needs to strike a balance between conflicting interests – like fairness and equity on the one hand and economic viability and common-sense on the other. For instance, the IGG stopped the construction of Pension House in Nakasero in 2008 because then NSSF MD, David Jamwa, had altered the design of the building (from eight to 32 floors) thereby increasing costs from Shs39 billion to Shs 136 billion. The exchange rate then was Shs 1,600 to the dollar, a litre of petrol was Shs 1,800 and a bag of cement was Shs 14,000. Six years later the dollar is Shs 2,500, a litre of petrol Shs 3,750 and a bag of cement Shs 32,000.

Although NSSF has already sunk Shs 60 billion into the structure, the cheapest bidder to finish the building quoted Shs 285 billion in 2013. As I write this article, even this new procurement has also been stopped by the IGG. Indeed, the new costs make the construction of Pension House unviable. Therefore, the cost of the IGG’s intervention in this case far exceed any injury it sought to cure. I can quote tens of projects in which the IGG has intervened and instead of saving the taxpayer, it has escalated the costs astronomically. One could argue that the indirect benefit is to scare thieves. Yet the reality is that even the IGG’s interventions create opportunities for members of its staff to extort bribes from those they are investigating.

The cost of fighting alleged corruption should not exceed the benefits that may accrue from such an endeavour. This principle applies to other spheres like marketing and tax administration. In marketing, the costs of reaching a particular market segment should not exceed the margins you are going to get. The cost of collecting tax revenues from a shop in rural Karamoja should not exceed the amount collectable. Shopkeepers in Kampala may complain that in letting their counterparts in rural Karamoja not pay taxes, Uganda Revenue Authority (URA) is not being fair. But it is not economically viable for URA to spend Shs 50m a month to collect Shs 40m worth of revenue. Here the Authority has to sacrifice the principle of equity and fairness at the altar of common-sense.

Finally, the Inspectorate needs to respect and try to enhance the internal control mechanisms in the institutions it investigates. If the organisation has internal procedures to correcting mistakes, the IGG should encourage them to work, not usurp their powers .So far, the IGG has appeared to either not understand its role or have lacked faith in the internal governance structures of other public institutions.

All institutions, public and private, have various internal control weaknesses which they keep working to improve. A perfect company or institution does not exist – not even in the Vatican. Even Google, Microsoft and Apple have many internal control weaknesses which auditors point out routinely. The standard, therefore, is not whether but when the IGG should intervene and investigate complaints in an institution.

The IGG needs to learn to refer many of the complaints it receives to internal processes of the institutions under scrutiny such as disciplinary committees, audit committees or the board. This is necessary to deter abuse by disgruntled former employees and other persons seeking to use her office to fight personal vendettas. It is also vital to facilitate the growth and consolidation of internal governance competences in these organisations to handle administrative abuses and weaknesses on their own.


1 comment:

terry said...

igg does what ever they want theres no one for them to acct to , and they know it they use bots in texas hold em poker deluex to steal players chips so they have buy more