Parliament directs Exodus SACCO to stop compulsory deductions

KAMPALA, February 15, 2024 – Parliament has directed the Uganda Police Forces’ Exodus Savings and Credit Cooperative [SACCO] or Exodus SACCO to stop mandatory deduction of personnel salaries as savings.

The Committee on Defence and Internal Affairs discovered that Exodus SACCO management is violating the Cooperative Societies [Amendment] Act, 2022, by denying the officers 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 on Tuesday by the Chairperson, Wilson Kajwengye, during plenary sitting chaired by Deputy Speaker Thomas Tayebwa.

“The committee reiterates that the Registrar of Cooperatives proceeds over the SACCO under Section 2 [2] of the Cooperative Societies [Amendment]Act, 2022, 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.

He 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,” said Kajwengye.

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,” reads 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 savings, shares and loans of the deceased members are maintained as if the members are still active.

Busia Municipality MP, 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.

Kilak County MP, Gilbert Olanya 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 [Wazalendo 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.

However, Deputy Speaker Thomas Tayebwa disagreed with  minister Muhoozi, arguing that mandatory deductions of police officers’ salaries contravenes the law much as they belong to a police SACCO.

“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,” said Tayebwa.

He directed the Minister of Internal Affairs to present an action taken report within three months.

Tayebwa in early 2023 directed the Committee on Defence and Internal Affairs, to investigate the alleged fraudulent operations in Uganda Police SACCO also known as Exodus SACCO.

Tayebwa said then they had received complaints from police officers about compulsory monthly savings, disparities in savings, and challenges in access to their savings.

https://thecooperator.news/tayebwa-directs-probe-into-police-sacco/

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