When President Museveni pledged to support teachers' Saccos with Shs 25bn to help them improve their welfare, little did he know that the funds would be mired in controversy. The coveted funds were to be disbursed in five instalments of Shs 5bn annually over five years. But as YUDAYA NANGONZI writes, the long battle on who should manage the funds is far from over.
At the celebrations of the World Teacher’s day at Lugogo cricket oval last year, teachers, under their Uganda National Teachers Union (Unatu), asked the president to resolve the impasse.
Unatu general secretary James Tweheyo told the president then that Education Minister Jessica Alupo and the permanent secretary Dr Rose Nassali-Lukwago had delayed their funds, despite approvals from other government entities. Museveni responded that he was unhappy with anyone mistreating teachers, and directed that the monies be transferred to the teachers’ apex Sacco.
He said: “… I thought this money issue was resolved. But if it is not true, leave that to me. I will handle it.”
The Observer has learnt that the presidential directive was taken seriously by the education ministry, leading to the transfer of Shs 2.3bn last year to the teacher’s Sacco, Uganda Teachers’ Savings and Credit Cooperative Union (UTSCCU).
The release saw 1,415 teachers from 16 out of the 53 teachers Saccos benefit from the Shs 2.3bn. However 3,107 teachers, who had applied for the loans, missed out. In an interview last week, the UTSCCU board chairperson, Stephen Nabende, said they had received more funds from the ministry.
“We are moving on very well because the ministry is disbursing the funds as agreed. In total, we have so far received Shs 3.25bn and we are still expecting more since we are now the fund managers,” Nabende said.
Nabende said teachers in Bugiri, Tororo and Manafwa districts, who had not established Saccos, managed to join the apex Sacco and each district received Shs 200m in loan.
He said they had no major challenges so far and achieved 100 per cent repayment of the loans. The loans attract an annual interest of 15 per cent.
“The only issue now is with some CAOs [chief administrative officers] that we give reminders to deduct our loans from salaries and they forget. Those who make deductions, take long to remit them to the Unatu Sacco, but we shall resolve this with time,” he said.
Districts that don’t deduct the loans are Luuka, Busia and Namutumba. The Sacco union has increased its member Saccos from 71 last year to about 93 in all regions of the country.
Nabende said they have already engaged external auditors and are expected to submit audited accounts to the ministries of education and finance by the end of this month.
CONFUSION
While the education ministry directs the money to UTSCCU, the contract it had signed with the Microfinance Support Centre (MSC) on June 20, 2014 to manage the Shs 25bn till 2018, has not yet been cancelled.
On April 26, the education ministry permanent secretary, Dr Rose Nassali-Lukwago, wrote to MSC inviting them to sign an addendum to their agreement on May 9, 2016, indicating that they would no longer receive more teachers’ Sacco funds.
Unatu, which was also invited to witness the signing at the ministry’s boardroom, was quick to confirm attendance. In a May 6 letter, Tweheyo wrote: “We acknowledge receipt of your letter and confirm our attendance to witness this important function. We are grateful for your continued efforts to improve the teachers’ welfare and quality of education.”
Tweheyo, who had last year criticised Nassali for frustrating teachers before the ministry released the Shs 2.3bn, was left in shock when the MSC did not show up to sign the addendum.
In explanation, MSC Executive Director John Peter Mujuni wrote back to Dr Nassali-Lukwago saying that his shareholders (the ministers of Finance, Microfinance and General duties) had earlier agreed (on February 12) on various issues, regarding the management of the funds.
In his letter, Mujuni points to issues that barred them from signing such an addendum. These included an opinion by the solicitor general in December last year, advising that MSC to continue managing the funds it received [Shs 9.7bn] until their obligation lapses in 2018.
“MSC executed contracts with 60 saccos to deliver the fund and thus has a contractual obligation to fulfill the terms and conditions in those contracts to avoid any legal impediments that can arise,” reads Mujuni’s letter.
When The Observer visited the Kololo-based MSC offices, Mujuni said they could not sign an addendum with unknown people.
“As far as we are concerned, Unatu is not party to our contract with the ministry. So, now, the events that followed, we see Unatu being part of this contract,” Mujuni said.
“Why do we need to go ahead and sign addendums? If the ministry wants us to sign it, we must negotiate the addendum, not just inviting us to sign because some people are putting them under pressure.”
ANOTHER PLAYER
According to Mujuni, although Unatu were fighting for the money, they were not part of the initial discussions that led to the president disbursing the funds to them.
“We were given evidence that far back in 2011, the president launched a teachers’ union called Uganda Teachers Cooperative Savings and Credit Union (UTCSCU) and that is one of the saccos we are working with,” he said. “They gave us a list of about 35 Saccos and we have funded all of them, and not registered any losses.”
UTCSCU chairperson Joan Asiimwe, who posed for pictures with the president in 2011 after the launch of the Sacco at Jinja, is seeking to meet the president again to reclaim the funds that are now managed by Unatu’s apex Sacco.
Mujuni said the president, solicitor general, education ministry and other government entities have been misled over management and initial beneficiaries of the Shs 25bn Sacco funds.
Asked how the ministry opted for MSC to manage funds over other institutions, Mujuni explains that they won the contract after a competitive bidding process. Last year, The Observer reported that Unatu’s apex Sacco had declined to formally participate in the bidding process to manage the funds despite requests from the ministry.
This, Mujuni says, did not stop the bidding to take place since other financial institutions had showed up at the ministry’s boardroom. After the release of funds to MSC, a series of disagreements arose and chances are that they have finally come to an end.
RESOLVED
Asked about it last week, Patrick Muinda, the education ministry’s spokesman, said everything was calm following the presidential directive.
“The teachers’ money is not a worry to the ministry now. We signed agreements with the teachers’ apex Sacco to manage the remaining funds,” Muinda said.
He explained that he held a meeting with Mujuni who clarified that they could not just transfer the Shs 9.7bn to Unatu’s UTSCCU.
“The ED [Mujuni] told me that once a financial institution has received money, it is not like a pigeon hall where you wake up and request for the funds to be refunded immediately when contracts have been signed. And we had to respect that view,” Muinda said.
“And since the auditor general has not yet complained about how the centre is managing the funds, I want to believe that they are not being fraudsters.”
He added that the Shs 2.3bn that was given to the UTSCCU was an additional release on part of the Shs 25bn but not deducted from the Shs 9.7bn that had been initially sent to MSC.
Muinda said the Shs 9.7bn was the very last amount they sent to MSC and the rest of the funds will be managed by the UTSCCU. However, Mujuni said they are waiting for the remaining funds as per the signed contract that indicated Shs 25bn, and not Shs 9.7bn.
“We are expecting our shareholders [the ministers] to hold a meeting in mid-July or at the end of the month to discuss this matter further and then we communicate to the education ministry on the way forward,” Mujuni said.
But Muinda insisted that whether MSC comes to sign the addendum or not, they are not receiving any more monies from the ministry.
“When the president says something, it overrides everything in government institutions and we are following that,” he added.
Asked if they think that Unatu is competent, Muinda indicated that in their appreciation, the ministry thought the Sacco had exhibited competence to manage the funds.
“For us, we have done our part of disbursing funds and I cannot predict on the outcome of how the funds will be managed ... in fact, they told us that we were wrong to think that they did not have the capacity.”
nangonzi@observer.ug