Ntungamo dairy coop bosses suspended over missing Shs 28bln

NTUNGAMO, October 16, 2024 – The board of the Ntungamo Dairy Farmers Cooperative Union [NDFCU] has been suspended amid allegations of misappropriating Shs 28.6 billion. The decision was made during a special general meeting attended by Bob Bariyo Barigye, Registrar of Cooperatives/Commissioner for  Cooperative Policy and Development in the Ministry of Trade, Industry, and Cooperatives [MTIC].

Among those suspended are board Chairman Joseph Kato Lubega and eight other committee members. The meeting, held last Thursday, addressed a supervisory committee report for the year 2023, which uncovered missing funds, including Shs 460 million from milk sales and Shs 100mln stolen while in transit to the bank.

“During the audit, we discovered that over Shs 400 million received from farmers’ milk sales was stolen, along with Shs 100 million in cash. Additionally, over Shs 28 billion remains unaccounted for. This information was intended to be presented during the 2023 AGM, but it was obstructed by the former board,” stated CPA Maria Mirembe.

Mirembe accused the board and management of collusion, noting that some funds were stolen by junior staff due to board negligence. Consequently, the board members have been asked to step aside to allow for further investigations. They are accused of withholding critical information from members and obstructing a forensic audit that could have clarified the situation.

In the interim, a new board chaired by Emmanuel Arinaitwe and including Mirembe, now serves to oversee union activities while investigations continue. The members have also requested the new board to review the contracts of union employees.

Member Patrick Nyehangane criticised the board for its negligence, stating, “It is concerning to see such a large sum unaccounted for when the board and management were responsible for supervision.”

Meanwhile, in July 2024, five cooperative employees and some board members were arrested by the State House Anti-Corruption Unit [SHACU] over corruption and negligence leading to the loss of Shs 474 million. Those charged included Myers Muhimbura, the Quality Controller, Laban Mugizi Rukangayo [Accountant], Dan Abesigye Kakiza [Secretary/Manager], Caleb Turyahikayo [Treasurer], and Jennifer Kyampaire [Cashier]. According to court findings, Muhimbura recorded lower quantities of milk supplied by member farmers and pocketed the proceeds from the stolen milk.

Barigye emphasised that the suspension of the former board was necessary for a thorough investigation. “Preliminary findings indicate the board’s negligence over the past three years, with significant leakages, particularly from milk sales. An interim committee has been established to oversee union operations until March next year,” he noted.

He also stated that a forensic audit is required to ascertain how Shs 28 billion disappeared, and anyone found responsible must refund the funds, which belong to the members.

On his part, suspended Lubega responded that the union was earning about Shs 30mln monthly but spending up to Shs 50mln during the same period, citing low milk yields and reduced supply from farmers as contributing factors to the losses. He claimed the board is being unfairly targeted due to disagreements with the supervisory committee.

Ezra Aryanyijuka, the Ntungamo District Commercial Officer, urged the new board to prioritise transparency and accountability, reminding members to hold their leaders accountable: “This is your union. Ensure you monitor the board and management closely to prevent further losses,” he said.

Background
Founded in 2003, NDFCU is the largest dairy cooperative in southwestern Uganda, comprising over 600 farmers and 25 primary societies across Ntungamo, Rukungiri, Rukiga, Kabale, and Isingiro districts.

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