Nine officials from Uganda’s Ministry of Finance, Planning and Economic Development are facing criminal proceedings over allegations that more than Shs60 billion meant for paying foreign debts was diverted to unauthorised bank accounts abroad.The case follows a forensic audit conducted by the Auditor General into Uganda’s Integrated Financial Management System (IFMS), the digital platform used by Government to manage budgeting, payments, accounting and financial transactions.
According to the audit findings, funds that were supposed to be used to service loans from the World Bank and the African Development Bank were transferred to accounts in Japan and the United Kingdom under circumstances that raised serious concerns.The investigation found that approximately $6.13 million meant for repayment of a World Bank loan was sent to an account in Japan, while another $8.6 million intended for an African Development Bank loan payment was transferred to an account in the United Kingdom.The two transactions, which happened in September 2024, amounted to more than Shs60 billion based on the exchange rates at the time.Initially, investigators suspected that the Government’s financial system could have been attacked by external hackers because of the unusual movement of the funds.
However, after investigations by the Criminal Investigations Directorate (CID), authorities concluded that the incident was linked to an alleged internal breach.Police investigations reportedly established that the diversion was not caused by an external cyberattack but involved individuals who had access to and handled the payment processes within the Ministry of Finance.Following the findings, nine Ministry of Finance officials were implicated and have since been interdicted in line with Public Service Standing Orders as both criminal and administrative investigations continue.
The scandal has raised concerns about the safety of Uganda’s public financial systems and the controls used to protect large amounts of taxpayers’ money.The Integrated Financial Management System plays a critical role in managing Government finances, including approving payments, tracking expenditure and maintaining financial records. The alleged diversion has therefore triggered questions about whether existing safeguards are strong enough to prevent manipulation of payment instructions.Bank of Uganda has also been involved in the matter because it acts as Government’s banker and plays a role in processing Government financial transactions. The central bank has participated in efforts to trace and recover the diverted funds.
The recovery process has recorded some progress, with money sent to the United Kingdom account reportedly recovered. However, efforts to recover the funds transferred to Japan have faced challenges.Authorities have continued working with international partners and financial institutions to trace the remaining funds and ensure that public money is recovered.The case has become a major test for Uganda’s ability to respond to financial crimes involving international transfers. It has also highlighted the importance of stronger controls, including multiple approval levels, proper separation of duties and improved monitoring of large Government transactions.
Experts in public finance management have emphasized that systems handling taxpayers’ money must have strict security measures to detect suspicious activities before funds leave Government accounts.While the nine officials remain innocent until proven guilty by a court of law, the allegations have already placed renewed focus on accountability and transparency within Government financial institutions.As the legal process continues, attention will now turn to how the payment instructions were allegedly altered, who played what role in the transactions, and whether all the diverted funds can eventually be recovered.
