Medard Sseggona, the PAC Chairperson
Parliament has asked the Ministry of Public Service to review the service agreement between the Government and Uganda Consumer Lenders’ Association/Uganda Bankers’ Association on extension of loans to public servants after numerous reports of unlawful salary deductions.
The directive followed a report by Public Accounts Committee (PAC), on the audit reports for 2021/2021 on referral hospitals after the Auditor General, John Muwanga noted that in most Regional Referral Hospitals, there were unauthorized loan deductions from employees’ salaries without letters of undertaking from the responsible officers.
Medard Sseggona (Chairperson PAC) informed Parliament that during the interface with Accounting Officers of the respective regional hospitals, they explained that the unlawful loan deductions mainly arose from staff transferred to new stations without their personal files and in such cases, employees would have active deduction accounts without complete records at the new stations.
The hospital bosses also said that the problematic loans were contracted and were being granted at Ministry of Public Service, but they added that currently, all loans are forwarded and granted basing on a letter of undertaking issued by Accounting Officers.
The findings prompted Parliament to question why Government continues to maintain manual staff files which are not easily moveable upon transfer of the affected staff.
“The practice poses a risk of causing deduction without liability thus, depriving staff of their hard-earned funds vice. This may also expose Government to litigation and in some cases industrial action Further, the Committee is cognizant of clauses of the service agreement between the Government (MoPS) and Uganda Consumer Lenders’ Association/Uganda Bankers’ Association, which require a letter of undertaking for each Government employee before making employee deductions. Thereforeonly deductions consented to by employees, in writing, should be submitted to the MoPS for timely monthly payroll processing,” remarked Sseggona.
Parliament adopted recommendations made by PAC including the need for all Accounting Officers to ensure that all loan applications are streamlined, with all data being reconciled in liaison with management, with Sseggona remarking, “The Government should, migrate from manual to digital/automated tiles and no deductions should be made without fully implementing this.”
There was also an issued raised about the unrealistic loan end dates after the Auditor General noted that 29 employees had entered into loan agreements with commercial banks with problematic end dates ranging from 6 to 10 years.
The Public Accounts Committee revealed that in just 2021/2022, Shs173,560,513 had been deducted from these employees, thus casting doubt on the integrity of the PDMS system used for payment of public servants.
Sseggona said, “This has led to continuous deductions from staff resulting into financial loss. Un-authorized loans deductions pose a risk of making deductions from staff that have no loans, which deprives them of their hard-earned funds. The Accounting Officer should, be provided with a responsibility to code and decode and this will not be a challenge in future and Government through Ministry of Public Service should consider revisiting the MoU with commercial banks with a view of streamlining the management of deductions.”
Similar deductions were reported in Lira Hospital where Shs12,591,781 was deducted from 15 staff without approval of the affected staff pr Accounting Officer, while 8 staff from Hoima Referral Hospital, had Shs21,015,298 deducted without approval of the Accounting Officer from the PDMS.
