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UGX20 Billion squandered in pension scam

Peter 17th Jan, 2025 Economy Pedson Mumbere
UGX20 Billion squandered in pension scam

Deputy Speaker Tayebwa (R) received the report from the Auditor General Akol at Parliament. COURTESY PHOTO


The Auditor General’s report for the year ending 2024 has unveiled alarming financial irregularities in the management of pension and gratuity benefits, revealing over UGX 20 billion in overpayments to beneficiaries.

The findings, submitted to Parliament by Auditor General Edward Akol on January 15, underscore serious lapses in the oversight and management of public funds.

According to the report, 1,502 pensioners were overpaid gratuity benefits totalling UGX11.4 billion, while 2,193 pensioners received excess pension benefits amounting to about UGX 9 billion.

  • These overpayments occurred across 19 ministries, departments, and agencies (MDAs) and 115 local governments (LGs) for gratuity, and 23 MDAs and 104 Local Governments for pensions.

“I noted that 1,502 pensioners/beneficiaries were overpaid gratuity benefits of UGX 11.393 billion. These overpayments were in 19 MDAs and 115 LGs. This amount is recoverable. I noted that 2,193 pensioners/beneficiaries were overpaid pension benefits of UGX 8.98 billion in 23 MDAs and 104 LGs. This amount is also recoverable,” the report says in part.

The special audit, commissioned by Finance Minister Matia Kasaija, aimed at assessing the effectiveness of pension and gratuity management processes, validate 72,285 pensioners on the government payroll, and recommend corrective measures.

  • Covering the financial years from 2019/20 to 2023/24, the audit validated 72,206 pensioners, of whom 61,199 (84.8%) were fully verified, 756 (1%) were not verified, and 10,251 (14.2%) failed to show up for validation.

The audit also revealed that 4,538 individuals had not accessed the pension payroll by June 2024, with 4,057 verified and included in the pension estimates, while 481 remained unverified.

The AG recalculated the pension and gratuity estimates for the financial year 2024/25 to UGX974.6 billion.

This figure includes; Pension and gratuity arrears (UGX 74.2 billion); Non-traditional pensioners’ benefits (UGX 33.7 billion) and Expected retirees for the fiscal year 2024/25.

To meet these obligations, the Government will require an additional UGX 43 billion beyond the total revised budget of UGX 931 billion for the 2023/24 financial year.

  • The Auditor General’s investigation also uncovered irregularities in the allocation of supplementary funding for pensions and gratuities.
  • A total of UGX 382 billion was disbursed to 185 entities, including eight MDAs (UGX 16 billion) and 177 LGs (UGX 366 billion), without formal requests from accounting officers as mandated by Regulation 18 (2) of the Public Finance Management Regulations (PFMR) 2016.

“Although the Ministry of Finance, Planning, and Economic Development (MoFPED) provided the schedules of requests for the supplementary budget, they were not reconciled with the actual amounts received by the respective MDAs and LGs,” the report noted.

The Auditor General called for stricter compliance with financial management regulations, advising the Permanent Secretary/Secretary to the Treasury to ensure that all supplementary funding requests are formally submitted by accounting officers. This measure aims to enhance accountability and internal controls over public funds.

It is not clear what measures Parliament would recommend to recover the UGX20 billion. However, the report will be forwarded to the Parliament Accounts Committee for investigations to find out who should be held accountable.

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