The Parliamentary Public Accounts Committee in charge of local governments has called for a review of the system used by the ministry of public service to manage loan deductions of civil servants in local governments after discovering that employees are losing billions of money in illegal loan deductions.
The committee found out that over Shs 20bn was illegally deducted from employees of local governments without the consent of employees.
Appearing before the Parliamentary Public Accounts Committee in charge of Local Government, the permanent secretary of the Ministry of Public Service Christine Bitarakwate, distanced the ministry from illegal salary deductions of employees in Local governments, saying approval of loans is done at local government levels.
According to the Auditor General’s report of the financial year ended June 2023, the Ministry of Public Service deducted Shs.20.8bn from 15002 staff in 44 local governments without letters of Undertaking or consent from affected staff. 1.45bn was deducted by the ministry from 2,143 employees past the end of the date of deduction while 4.74bn was unrealistically deducted from 2729 employees in 69 local governments
Committee members pointed out the irregular arrangement which was established by the ministry of public service to manage deductions. The ministry entered into a service agreement with Uganda Consumers Lenders Association and Uganda Bankers Association which also contracted Payroll Consults Africa (PCA) to manage loan deductions on their behalf using the Payroll Deduction Management System (PDMS). MPs claim this was the birth of fraud that has facilitated illegal deductions.
Legislators have called for a review of the loan deduction system used on civil servants, saying it has affected the livelihoods of civil servants as they continue to lose their salary in illegal and unrealistic deductions.
The committee questioned the ministry of public service for delayed access to pension payroll by new pensioners in various local governments. Over 1.3bn shillings were not paid to eligible pensioners in 65 local governments in the financial year 2021/2022 due to delays to access the pension payrolls. Committee members tasked the ministry to clean up the pension payroll to save the government from accruing huge arrears in pensions.
The Ministry of Public Service blames the query on Chief Administrative officers of different local governments, saying pension and gratuity processing has been decentralized.
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