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Shs11bn Fraud: How Teachers Were Duped Into Paying Loans They Never Acquired

The Criminal Investigations Department has identified cases of fraud and forgeries by managers of saving schemes that were meant to benefit from the teachers revolving fund.

This was unearthed as part of the investigations into the embezzlement of 11 out of the 25 billion Shillings which was released by the Ministry of Finance as a revolving fund to improve the welfare of teachers in government schools.

 To qualify for the loans, one needed to be on the government payroll with no other loan from any other financial institution.

But detectives at the Criminal Investigations Directorate (CID) headquarters in Kibuli have established that hundreds of teachers have been painfully paying for loans that they never picked under the arrangement. The affected teachers were convinced to join Savings and Credit Cooperative Organisations (Saccos) in various parts of the country, from where they were scammed.

The Saccos include Gulu Integrated Teachers’ Sacco, Iganga Based Teachers’ Sacco, Kigulu Integrated Teachers Sacco, Kasese Municipal Teachers’ Sacco, Entebbe Municipal Teachers’ Sacco, Mpigi Teachers’ Sacco, Gomba Teachers’ Sacco, Kiruhura Teachers’ Sacco, Wakiso Teachers’ Sacco, Busaana Teachers’ Sacco, Nakigo Teachers’ Sacco, Isikiro Teachers’ Sacco, Kakiri Teachers’ Sacco, Kiryandongo Teachers’ Sacco and Kibuli Core Teachers’ Sacco.

CID Spokesperson Charles Twine said they have now found glaring evidence of fraud and forgeries against some SACCOs and conferenced with the Office of the Directorate of Public Prosecution to prioritise 12 of the 42 case files against the SACCOs.

Trouble started when Ministry of Education called for bidders to manage the teachers’ money and Microfinance Support Centre (MSC) emerged as the best.

MSC was given 9.3 billion Shillings to distribute to teachers Saccos. However, it was later established that the money was instead allegedly lent out to financial institutions such as Finance Trust Bank which was allegedly given a 6 billion Shillings’ loan and Hofokamu microfinance which allegedly acquired a 3 billion Shillings’ loan.

The Uganda National Teachers’ Union (UNATU) then organised protests demanding for the money to be given to them so that they could manage it. President Museveni ordered the Ministry of Finance to give the remaining balance of over 15 billion Shillings to UNATU.

However, UNATU could not be in a position to distribute the money to Saccos because it is at the level of an association. A decision was made to create an account under Walimu Teacher’s Union which could rely on District Chief Administrative Officers (CAOs) to verify whether the applicants were indeed on the government payroll and never had running loans.

“The role of the CAO was to ensure that a Sacco applying for the loan exists, its members are on the government payroll and none of them is paying for an already acquired loan. The CAOs were also supposed to ensure that the Saccos had physical addresses. But the CAOs went ahead and cleared Saccos which never existed and we are also interrogating them,” a detective told URN.

Another requirement Saccos needed to meet was presenting a certificate of maximum liability issued by commissioner cooperatives. This was intended to show the status of the Saccos’ savings, inventories and audited books of account. In addition, Saccos we supposed to transfer the money to successful loan applicants electronically.

“There are very regularities which include Walimu Teachers’ Sacco itself. Very many Saccos were given money beyond that described in the certificate of maximum liability. For instance, Gulu Integrated Teachers’ Sacco’s maximum liability was 300 million Shillings but it was given 500 million Shillings. Iganga Based teachers’ Sacco’s maximum liability was 150 million Shillings but they were given 450 million Shillings. We suspect fraud started at Walimu Sacco as the overall overseer,” a detective explained.

After getting the money fraudulently, Sacco managers went ahead and withdrew it physically instead of transferring it to successful applicants electronically as earlier guided. The managers afterwards got bank details of teachers who were members of the Saccos and submitted them to Walimu Sacco as those who have successfully acquired the loans.

Walimu Sacco in an attempt to recover the money, approached Uganda Bankers’ Associated and coded several accounts of unsuspecting teachers. The teachers’ salaries started going direct to Walimu Sacco accounts yet they never took any loans.

-URN

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