Friday 19 December 2014

€4m of Irish Aid to Uganda diverted in 'sophisticated fraud'

Grainne Cunningham and Lise Hand

Published 24/11/2012 | 05:00

THE misappropriation of €4m in Irish Aid funds to Uganda was the result of "a very sophisticated, well-thought-out fraud involving a high degree of collusion at a senior level", an audit report has found.

Not one cent of the money was used to assist war-torn regions in the north of the country, described as the poorest in Uganda.

Instead, the money was carefully siphoned off by senior officials with a knowledge of the controls, including passwords, the interim report from the Department of Foreign Affairs says.

Assistance funding of €16m destined for the country was halted last month after it was found that a total of €11.6m, including the €4m in Irish Aid, had been fraudulently diverted to two bank accounts under the control of the Office of the Prime Minister (OPM).

The technical team, which travelled to Uganda last month, tracked the €4m as it moved from Irish Aid to a designated holding account on July 22, 2011. It should then have been transferred "promptly" to a consolidated account but instead remained in the holding account until December 28, five months later.

The funds, along with aid from Sweden and Denmark, were then "fraudulently" transferred to a dormant account in the Bank of Uganda, controlled by the OPM.

The money was then withdrawn from this "crisis management account" under a number of guises, the report found.

The report is also critical of Irish Aid systems, identifying specific weaknesses and the failure to comply with certain controls which could have led to the fraud being detected earlier.

Suspended

The main people involved in the fraud have been identified. Some have been arrested and others were suspended pending police inquiries.

The report recommends that the Government recovers the €4m and halts aid payments to the country until follow-up audits in Uganda are completed. This could take until late 2013 to complete, it says.

Tanaiste Eamon Gilmore confirmed that a review of procedures would now take place. "I think the systems control could have been stronger," he said.

He stressed that the missing funds would be repaid but was unsure of exactly when the €4m would be returned, saying it would be "in weeks, months – that process is being handled by our ambassador in Kampala," he said.

Irish Independent

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