Currency management in every central bank is one of the most protected functions, for obvious reasons- it is the Holy Grail.
It is for this reason that Bank of Uganda has in place what is supposed to be a watertight process complete with human and machine security that ensures the introduction of new notes and the removal of old and defaced notes is tightly managed to ensure there are no leakages.
Any leakages are not only theft of government property but would greatly weaken the central bank’s inflationary control mandate through the management of money supply.
A 2-week-long investigation by this website has however revealed how crafty BoU officials took advantage of a lax supervisory regime to steal off, for themselves and possibly for their bosses too, large sums of money- that until today BoU is so tight-lipped about.
Mafia-like operation
Under normal circumstances, used currency notes that re-enter a currency centre are first reprocessed in tightly managed counting/machine rooms by note examiners who then sort it into good and bad money. Good money is strapped and labelled and put back into the system, while old and defaced notes are counted, recorded and holes punched into the notes and put aside for destruction. A similar amount equivalent to the destroyed notes is then supposed to be reintroduced into circulation.
Every note examiner is assigned a specific amount of money and specific counting room and all operations are closely watched on CCTV that is supposed to run 24/7 and is supposed to be reviewed daily by a supervisor and reports made. During the money counting process, no any other person, unless with authorization, is supposed to access the counting rooms, except the note examiner.
But it appears, BoU of Uganda staff have in collusion with their bosses at the currency centres and at headquarters, with impunity frequently violated the written down protocol, for purposes of helping themselves to billions of cash.
In the deliberately crafted scheme, during cash counting hours, note examiners would contrary to written protocol let in the rooms, cleaners and office messengers seemingly to either clean the rooms, bring in tea or water or run some errands for the note examiners. This cover would then facilitate the introduction into the counting room of containers such as waste baskets, polythene bags and tea flasks. Polythene bags that on entry contained snacks such as chapatis and samosa, would upon exit, be stuffed with money- that is not necessarily old, and is still reusable. This money would then be recorded as defaced, and sent for destruction.
Out of the counting rooms, in a choreographed scam, the security teams manning the CCTV cameras, would either look away as this all happened, or for some reason not be in the monitoring room for a few minutes, so as to facilitate the delicate operation. Once the money was safely out of the counting rooms, it would then make it to garbage bags that at the end of the days is taken out of the banking premises.
This process also involved the security supervisors who were expected to review the CCTV footage at the end of the day as well as the team in charge of old currency destruction whose role was to falsify the records on how much old currency has been set aside and eventually destroyed.
In some cases, note examiners from other currency centres/branches would be allowed into counting/machine rooms and used to siphon-off money in their bags and clothes. This would often be with the collaboration/collusion of security teams at the exit.
In summary, it would take almost the entire currency centre to carry out this sophisticated operation and this is probably the reason why Bank of Uganda reportedly suspended all staff of Mbale currency Centre over the theft.
According to ChimpReports, an online news website with close connections to Bank of Uganda, the arrest was a result of an investigation after an official at the branch was caught red handed on a security video camera stealing money.
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“BOU conducted a long and in-depth probe into the theft after being alerted by internal security and has now decided to act,” the online news site is further quoted, adding that “large sums of money which were worn out and supposed to be punched were instead stolen from the strong room.”
The arrested officials have neither appeared anywhere in court or their names made public.
BoU issues fresh guidelines on currency management
In light of the fresh scandal, Bank of Uganda has now issued fresh guideline on currency management and access to counting/machine rooms at the currency branches.
In a September 02, 2019 memo to all currency centres, Dr. Bazinzi Natamba the Ag. Currency Director said that in “order to mitigate risks and strengthen internal controls” in currency operations, No Note Examiners from another currency branch should access a counting/machine room of another currency branch without the required authorization.
Dr. Bazinzi also ordered that “no staff other than Note Examiners should participate in the Counting/ Machine Room activities such as sorting, punching and strapping of stocks.” He also ordered that daily CCTV footage at every currency centre must be reviewed.
“Immediately stop staff from carrying into the counting rooms any items such as tea, water, eats, juices, among others, for personal use. Urgently remove waste baskets/ boxes in the counting rooms,” Dr. Bazinzi directed.
Is Mutebile beginning to strike at the Mafias?
These fresh guidelines as well as the investigation and subsequent arrests of old currency thieves’ coincides with the appointment of Dr. Bazinzi to the post of Ag. Currency Director, following the suspension of Charles Malinga Akol, the director of currency at Bank of Uganda and that of Francis Kakeeto, the assistant currency director Bank of Uganda (BoU), ironically at the Mbale branch.
Malinga is accused of failing to supervise the consignment of new currency from France and instead delegated his juniors. Serious security breaches were later discovered on the currency plane- 5 extra crates of unauthorised cargo was transported on the plane. Initial leaks suggested there was an extra UGX90 billion of unauthorised new notes, but several and conflicting explanations by various government agencies of what the cargo was has have since been offered, but up to today, there is still a cloud of ambiguity on what exactly was on that cargo plane.
Even Bank of Uganda, preferred to safely call it “an anomaly in the inventory of the expected consignment.” Admitting to an outright theft would cause serious reputation issues within the global financial partners of the central bank.
Dr Bazinzi, is one of 5 high ranking Bank of Uganda staff, headhunted and hired by the BoU Governor, Professor Tumusiime Mutebile in February 2018 as a way to “improve efficiency and enhance internal controls in the Bank.” The immediate arrest of the thieving BoU staff and the issuance of fresh guidelines after the former currency boss and his juniors were arrested and suspended, raises fresh questions as to whether the suspended currency director was part of the theft ring or if staff simply took advantage of his absence.
