Parliament has directed the Uganda Police Forces’ Exodus Savings and Credit Cooperative (SACCO) to stop mandatory deduction of personnel salaries as savings.
The Committee on Defence and Internal Affairs discovered that the SACCO’s management is violating the Cooperatives Societies Act by denying them the option of voluntary saving.
This was contained in the committee’s report on the inquiry into the operations of the Uganda Police Force Exodus SACCO that was presented by the chairperson, Hon. Wilson Kajwengye, during plenary sitting on Tuesday, 13 February 2024.
“The committee reiterates that the Registrar of Cooperatives Societies proceeds over the SACCO under Section 2 (2) of the Cooperatives Societies Act and immediately stops mandatory deductions on officers’ salaries and contributions for members’ savings until a comprehensive membership register is compiled on the condition that only willing members are registered,” said Kajwengye.
He added that the stopped deductions should only apply to savings and not loans, stating that all members with outstanding loan obligations should continue to pay the SACCO.
Kajwengye said that the SACCO’s financials are not being managed in adherence to sound accounting principles and standards.
“It is the committee’s considered opinion that inconsistencies in data compilation is the major cause of discrepancies and unreliable financial positions which has significantly affected the members’ savings,” Kajwengye said.
The committee also recommended that all deductions that were or are being made in form of retirement benefits should be refunded with interest to the affected personnel, saying that the deductions are contrary to the Pensions Act.
The committee further urged Parliament to direct the Office of Registrar of Cooperatives and Bank of Uganda to institute an independent forensic audit on the Exodus SACCO, as mandated by law.
“Effectively, the Minister of Trade, Industry and Cooperatives should move the Registrar of Cooperatives to initiate the process,” read the report in part.
The report further discovered that the unchecked role of District Police Commanders outside Kampala in transmitting the membership returns to headquarters in Kampala was a severe risk.
“The SACCO had no systems to effect deductions from source. Due to the inadequate verification process of membership contributions and insufficient records from inception, the SACCO management could not comprehensively update the members’ register,” said Kajwengye.
As a result of this lapse, the committee observed that each member’s percentage shareholding and savings cannot be reliably established.
The report also recommended that the SACCO management should develop a policy on claiming the savings of a departed member after a discovery that the management of the SACCO savings, shares and loans of the deceased members are maintained as if the members are still active.
Busia Municipality MP, Hon. Geofrey Macho, who raised the matter questioned the integrity of the Registrar in ensuring that the mandatory deductions that were made will be recovered.
“It is the same Registrar and ministry queried for disappearance of SACCO money,” he said.
Hon. Gilbert Olanya, (FDC, Kilak South County) said that the SACCO management goes as far as deducting the personnel’s salaries as soon as they start their initial training in the Force.
“You come from training and a percentage is taken from your salary. You will never withdraw this money but they keep saving,” said Olanya.
The Minister of State for Internal Affairs, Gen. David Muhoozi, justified the mandatory deductions, saying that it is aimed at improving the welfare of the officers, just like is the case with the Army’s SACCO.
“Granted, we had issues at the beginning of management, some of the issues still subsist but I want to urge members that rather than stampede a crash of this SACCO why don’t we, may be, approach with caution and convince people to stay. I could see some sentiments – people saying, get your money and go,” said Muhoozi.
He agreed with the recommendation to institute a procedure on access of benefits of deceased by their next of kin. “This money is theirs and they are entitled to it,” said Muhoozi.
Deputy Speaker Thomas Tayebwa, however, disagreed with the minister, saying that mandatory deductions of members’ salaries contravenes the law.
“It is very imperative that immediately you stop mandatory deductions. It is supposed to be voluntary; you cannot do much about it unless if you change the law. This money of theirs is hard earned,” Tayebwa said.
He directed the Minister of Internal Affairs to present an action taken report within three months.
