A special internal audit has commenced at the East African Community (EAC) headquarters in Arusha, information pills Tanzania as the regional body struggles to cover up a potentially explosive corruption scandal that could lead to the impeachment of the powerful Secretary General, cost Libérat Mfumukeko.
The lid was blown off by the EAC Deputy Secretary General (Planning and Infrastructure), help Dr. Enos S. Bukuku in a revealing memo dated April 3, 2017.
Dr Bukuku told the top leadership of the EAC that mismanagement of funds, abuse of procurement rules and mishandling of official vehicles were at the heart of the Secretariat’s troubles.
“There was in August 2016 impropriety and irregularity in awarding an EAC Group Life Insurance cover to the third ranked bidder (M/S Liberty Insurance) that actually had interfered in the procurement process via influence peddling and therefore ought to have been blacklisted but instead of the first ranked bidder (M/S Brittam Insurance) being awarded, M/S Liberty Insurance were given the contract and paid for a six month contract (at a price twice that of M/S Brittam Insurance for one year contract),” said Bukuku in his official memo to the EAC top brass.
“Now M/S Brittam Insurance have a contract with the EAC: This ought not to have happened in the first place. Not only was this a serious irregularity it also led to a financial loss,” he added.
Officials we talked to at EAC said they were uncomfortable discussing a matter currently under investigation.
We are reliably informed that the audit commenced on Wednesday to ascertain Bukuku’s submissions.
In his official memo, Bukuku further accused Mfumukeko of embarking on what he described as a “a log – jam with IDA over contracts for FSDRP Staff, the financial consequences of which have led to funds to the tune of US $192,000 being taken from the General Reserve and from the World Bank’s IDA Capital Markets Infrastructure (CMI) Project.”
He added: “There are other shades and trends of financial mismanagement and of giving employment without going through the Human Resources Advisory Committee (HRAC) or “directing” the HRAC to employ someone. What more should happen in terms of mismanagement to trigger 4 concerns and interest of Partner States to rein in the situation?”’
Bukuku said that when advised, the SG “pulls the rank and says as SG he has the power.”
He went on to allege that there were a number of happenings around EAC Executive Management that “merit attention, intervention and guidance.”
He cited the original Terms of Reference (ToRs) for an EAC Staff position call for 10 years experience which was cut down by an Executive to 5 years experience.
Bukuku, a Tanzanian national, said the original ToRs call for Fund Manager to have 10 years experience and to be placed under Directorate of Finance and consequently under DSG (F & A) but that the ToRs were changed to have Fund Manager with less than 10 years experience (essentially a finance role) and to be placed under SG’s Office.
“It is probably not advisable to have both the Resource Mobilization Function and the Fund Management Function to be under SG’s Office. But why would SG want that to be the case? What is the ulterior motive? What record of good fund management is in SG’s office?” he wondered.
Bukuku also reported to management that during the previous administration of Amb. Dr. Richard Sezibera it was agreed during an Executive Staff Meeting that Executives would not use EAC funds for their official motor vehicles during holidays.
If they use their official cars they would be responsible for fuel and per diems to their drivers.
“What is happening now? Some EAC Executives go on leave with two drivers who get paid per Diems; some Executives use more than one vehicle at the same time for non – EAC matters when one vehicle suffices. Some Executive take per diems and imprests the retirement of which looks on the face of it to be overblown. Some Executives go for ten days “national consultations” in their Partner States at EAC expense,” he added.
It’s widely anticipated in the corridors of power that Bukuku’s dossier could spell doom for the current EAC leadership.
His revelations come against the backdrop of severe warning from donors and regional leaders against lavishness and misuse of resources.
Tanzanian leader, John Pombe Magufuli in 2016 warned the institution on its extravagant spending on meetings and travels, saying the secretariat was reaping off the region’s poor instead of working for them.
“The budget the Secretariat is spending per head in this hotel [Ngurdoto Mountain Lodge] to host us for this Summit could have been saved to do other important things for the poor people in the EAC,” charged Magufuli during the EAC leaders’ summit.
“The Secretariat could have saved at least $20 per head if the Summit was held at the EAC headquarters,” he further noted, adding, “The Secretariat has become the complainer and not the problem solver when their mandate is to work on behalf of the partner states and help the poor people in the region.”
In fact, Bukuku in his memo also disclosed that some EAC Executives use specified Donor Funds to go on questionable Management Training including IRCC Donor Funds specifically earmarked for strengthening the Internal Audit Department.
“What else should EAC Executives mismanage for Partner States to raise their eyebrows and take the necessary action and guidance?” he wondered.
Bukuku proposed that IRCC Donor Fund Account be subjected to a special Audit.
It was also noted that Mfumukeko is a signatory on EAC bank accounts.
“The Secretary General should not be a bank signatory,” said Bukuku, adding, “That function should remain with the DSG (Finance & Administration) and others. The EAC Secretariat should write a formal letter to all banks withdrawing his signature and a copy of that letter be sent to Partner State for records.”
It’s understood Mfumukeko became Panel A Bank Signatory when he became Deputy Secretary General (Finance & Administration) upon assuming the SG position.
Officials told us he ought to have affected an immediate withdrawal of his Panel A Signature role but did not.
“How many cheques has he signed as SG and for which specific purpose?” wondered Bukuku before proposing that a special audit be conducted as the SG was as well encroaching on the responsibilities of DSG (F&A).
Bukuku also stunned the EAC leadership by disclosing that Mfumukeko has surrounded himself with a “mafia type clique bent on finding as many ways and loopholes of “eating money” and “offering” job contracts, some of which never pass through the Human Resource Advisory Committee (HRAC).
He said in the M/S Liberty Insurance procurement saga, the SG refused advice from technical people including the Internal Audit and Senior Procurement Officer which he didn’t listen to.
“Even the Procurement Committee advised against but not only did he refuse and proceed to literally give an EAC Group Insurance cover to M/S Liberty Insurance, a bidder that had influence peddled the procurement process and documentary evidence is there; but he also later on disbanded a Procurement Committee that stood firm against his wishes and has essentially sidelined the Senior Procurement Officer,” said Mfumukeko.
He said members of that Procurement Committee deserve Council’s commendation to encourage staff to speak up against “financial mismanagement” and “bad governance practices.”
In another stunning revelation, Bukuku said on one Saturday afternoon an EAC Executive requested a meeting with him at Palace Hotel in Arusha in “scheming to eat-off from large value procurements ($300,000 – $400,000 and above).”
The EAC Executive, according to Bukuku, argued that “our subordinate staff were eating and therefore we should also eat at Executive Staff level. One Member of his clique of advisers (now retired) used to demand payment of $100 – $300 from the per diem given to junior supporting staff who get trips to travel outside Arusha. This was burdensome to these junior staff who ended up paying him. The rot at EAC is serious.”