Last year, four Permanent Secretaries (PSs) of EAC Partner States conducted an investigation following a letter of a whistleblower, former Deputy Secretary General in charge of Infrastructure and Planning, Dr Enos Bukuku, sucking his boss Secretary General Ambassador Liberat Mfumukeko into mismanagement of EAC Secretariat’s funds.

The 36th Council of Ministers dismissed the report of the PSs on accounts that said investigation was not commissioned by the Council as per EAC rules and regulations, and its conduct was clearly unprocedural.

Whereas the investigation report leaked last year in May and circulated to several media houses in Tanzania and in other member states, it has so far been a subject of debate with the Permanent Secretaries ‘who, with their friends among EAC staff members, have  scores to settle with Mfumukeko’ rafting measures to streamline the Secretariat.

Liberat Mfumukeko assumed office on April 25th, 2016 on a contract of 5 years (till 2021).

What is however shocking is that the whistleblower, Dr Bukuku, raised 13 allegations when his contract had ended and left the Secretariat in acrimony after his efforts to fraudulently extend his contract hit a wall.

The Chair of the Council of Ministers to whom the letter of Dr. Bukuku was addressed, asked in April 2017 Permanent/ Principal Secretaries to undertake an inquiry and report to him.

During the 36th Council of Ministers held on February 19th, 2017 in Kampala, the Chair of Council confirmed that the PS did not undertake the work he had asked for; instead of presenting facts and evidence, they came out with subjective recommendations that he had not asked for.

And somehow they forcefully wanted this to be an EAC report, when it had not been commissioned by the Council, and when two EAC Partner States had not participated to that inquiry and did not sign or endorse in any way that report.

TrumpetNews can authoritatively reveal that the Secretary General has penned a dossier responding to each and every allegation leveled against his administration by Dr Bukuku.

With evidence attached, SG Mfumukeko accounted for each payment made to external service providers, the accountability of donor funds and which programmes where the monies were allocated to in every project handled by the EAC Secretariat.

SG Mfumukeko had earlier observed that while implementing change as he executed his duties with precision at the Secretariat, he made many enemies who became uncomfortable with his methodology of work.

TrumpetNews has also learned that dirty politics are also played in this matter: a number of people had fiercely opposed the appointment of an SG from the republic of Burundi; they have since decided to make his tenure hell.

Responses

Financial Sector Development and Regionalization Project (FSDRP) Management

Under this project the following issues were raised in the letter submitted by Dr. Bukuku and in the report by PSs:

1. The Secretary General caused the delay in the submission of an acceptable work plan to the World Bank for the FSDRP project :
2. Insistence by the Secretary General for retention of all staff under the additional financing in phase two contrary to the World Bank guidelines on the need for the EAC to make business care for staff retention.
3. Using the General Reserve resources amounting to USD 192,000 to pay project staff contrary to the EACFinancial Rules and Regulations.
4. The FSDRP project has not been operating since December 2016. 

The PSs, observed that:

1. The contract extension for the project staff should have been forwarded to the HRAC and also that it would have been prudent for SG to retain only the key project staff and send the rest on unpaid leave, awaiting approval of the project by the World Bank.
2. Request for advance USD 192,000 from the General Reserve Fund in order to pay the salaries of the project staff was un-procedural and that the Community stands to lose the funds since there is no confirmation from the World Bank to refund this amount.
3. The decision to reallocate funds amounting to USD 288,000 from the FSDRP to pay salaries to meet for project staff was un-procedural. The PSs observed that the Community stands to be obliged to refund the amount paid to staff.
4. The PSs also noted that the project staff is waiting to be paid salaries for March 2017 and April 2017 without clear indication of the work being performed since the work plan has not been approved by the World Bank.

Secretary General’s Response

1. Dr. Enos Bukuku led the negotiations for the additional financing with the World Bank, which were concluded and a Project Paper finalized.

The SG signed the financing agreement at the end of November 2016 (effective 14th February 2017) and went ahead to meet with the Bank in January 2017 in Arusha. A work plan for the second phase was then sent as requested by the Bank during their visit. The SG followed up with a reminder to the Bank in March 2017 for a Response. The Bank finally responded on 13th April 2017 by asking for the information.

Meanwhile the SG sent EAC Deputy Secretary General (DSG) Charles Njoroge to Washington in April 2017 to follow up with the Bank. DSG Njoroge held a meeting with the Bank and an agreement was reached on the way forward and areas to be revised in the work plan. DSG Njoroge, upon his return, held a meeting and presented a brief report to the Secretary General and a solution was agreed upon.

A revised work plan was finalized and submitted to the Bank on 29th April 2017. The Bank approved the revised work plan on 18th may 2017 with an annual budget of USD 3,624,916

The Bank has already released a first disbursement of USD 700,000. The project is on course.

Bukuku on Spot

1. It is clear that the Secretary General (SG) did not cause any delay but instead engaged the World Bank to fast track the approval of the work plan; the project is on course.
2. Dr. Bukuku spearheaded the negotiations for the additional financing with the World Bank and finalization of the Project Paper. The Project Paper and the minutes do not refer or mention any staff to be laid off. Rather, the Project Paper date 8th September 2016 negotiated with the Bank for the new funding agreement states that “All employees will be retained within the project during the first year and will be deployed in member countries during the 2nd and 3rd year”.

Dr. Bukuku on his return from the annual meeting of the World Bank in October 2016, did not submit any report nor make any briefing to the Secretary General but went ahead to make a decision that three staff in the project would not continue in the new phase and on 19th October 2016 he informed them verbally and through an email to one employee, without informing or consulting the Secretary General or the EAC Human Resource Directorate. He never provided any evidence to support his decision.

On 26th October 2016 the SG received a complaint from the three (3) employees dismissed. He then convened a meeting on 1st November 2016 with the Director Planning (supervising the project on behalf of then absent Dr. Bukuku), the Human Resource Department (HRD) and the Technical Director of the project. Dr. Enos Bukuku could not attend because he was on sick leave (1 month).

At the meeting of 1st November 2016, it appeared that there was no letter or email from the World Bank requesting the dismissal of the three (3) persons.

The SG subsequently wrote to the Bank for clarification of Dr. Bukuku’s decision. The bank replied on 1st December 2016 without giving a clear answer as to the three (3) employees that Dr. Bukuku had chosen to dismiss while leaving the others.

The world Bank agreed that all staff were key in planning for the next phase and revising the work plan.

Out of a total of $480,000 paid (mainly in salaries) to the World Bank – funded project staff, $417,000 were refunded to EAC in 2017. The refund of $63,000 paid in salaries is still under discussion with the Bank.

PSs are Misinformed

1. The observation by the PSs is misinformed. SG intervened after receiving a letter by staff who had been asked VERBALLY by Dr. Bukuku to leave the service. This had been done un-procedurally. The SG had no option but to put the decision on hold awaiting final decision by the World Bank. Dismissal of staff is a very sensitive matter that requires a due process. The said staff had worked for the project for seven years.
2. On the use of the General Reserve resources amounting to USD 192,000 to pay salaries to project staff:

A request was made from the project management for the advance of USD 192,000 for payment of staff who had not been in October 2016 and November 2016. The memo indicated that the funds would be refunded once a disbursement would be received from the World Bank; and the memo was approved by the Director of Finance and the Deputy Secretary General, Finance and Administration before SG approves it. (Annexes XI a&b).

Matters of staff salaries are not only sensitive but a means of survival for the staff and their families; therefore, the SG treated this as an urgent matter. The Director of Finance and Administration also advised that funds borrowed from the EAC reserve account would be reported to Council as had been done many times before.

It is important to note that the World Bank approved this as an eligible expense and the amount has so far been refunded to the EAC General Reserve Fund account on 12th October 2017.

Inaccuracy

The observation by PSs again is inaccurate. SG received a request from the project management, endorsed by the DirectorFinance and DSG Finance & Administration that the funds would be refunded by the World Bank. Staff had gone without salaries for almost 3 months causing undue suffering.

The $192,000 borrowed from the EAC reserve account funds were refunded by the World Bank to EAC on 19th September, 2017.

3. Reallocation of funds amounting to USD 288,000 from the FSDRP to pay salaries :

Funds amounting to USD 288,000 were unutilized funds which were in the project’s account and which were reallocated to pay salaries for December 2016, January 2017 and February 2017. Once again, the staff of the project had spent 3 months without any salary as EAC was still waiting for a disbursement from the World Bank which was not coming.

The World Bank in their Aide Memoire sent on 21st July 2017 clearly indicated that the USD 288,000 reallocated by EAC were eligible expenses.

However, the World Bank noted that in future EAC should seek a NO objection for such kind of reallocations, and EAC has committed to comply.

4. The World Bank staff was paid for no work done during the period the work plan had not been approved :

This is not true because the 14 staff were engaged in various activities and produced monthly reports, which were approved by the World Bank as per the requirements, and which served as a basis for the refund to EAC of their salaries by the World Bank.

Conclusion on World Bank Project

All the allegations and accusations made were not true, it was all about attempting to fault all decisions made by SG. There were no losses incurred whatsoever.

It is important to note that all the decisions that the Secretary General took with regard to the World Bank project were in good faith and done in consultation with other EAC executives.

It is therefore wrong for the PS to question and conclude that his capacity on matters of financial stewardship is questionable and even go further to recommend that he should be individually held accountable for those losses incurred by the FSDRP project when actually there was no loss.

The project is now on course.