The Uganda Police Forces’ savings scheme has been directed by the Committee on Defence and Internal Affairs of Parliament to cease the mandatory deduction of personnel salaries as savings.
The directive follows findings by the committee which implicated the Police’s Exodus Savings and Credit Cooperative (SACCO) management in the violation of the Cooperatives Societies Act by denying the police personnel the option of voluntary saving.
“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”. Wilson Kajwengye said.
The recommendation was contained in the committee’s report on the inquiry into the operations of Exodus SACCO that was during plenary sitting on Tuesday.
The committee chairperson clarified that stopped deductions should only apply to savings, and members with outstanding loan obligations should continue paying the SACCO.
Kajwengye stated that the financials of SACCO are not being managed in accordance with 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 recommended refunding retirement benefits deductions with interest to affected personnel, arguing they violate 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.
The report suggested that the Minister of Trade, Industry and Cooperatives should direct the Registrar of Cooperatives to initiate the process effectively.
The report revealed a significant risk in the transmission of membership returns from District Police Commanders outside Kampala to the headquarters in Kampala.
“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.
The committee discovered that the percentage shareholding and savings of each member cannot be reliably determined.
The report also suggested that SACCO management should establish a policy for claiming the savings of departed members, as the management of their savings, shares, and loans is maintained as if they are still active.
MPs raised concerns about the Registrar’s integrity in ensuring the recovery of mandatory deductions.
However, Gen David Muhoozi, the Minister of State for Internal Affairs, justified mandatory deductions as aimed at improving officer welfare, similar to the army’s 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 approach with caution and convince people to stay?”. Muhoozi said.
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 disagreed with the minister, stating that mandatory deductions of members’ salaries are illegal.
“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.