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900M to waste! KPMG fails to complete audit report on Crane Bank after hefty pay cheque

KPMG on the spot for failing to complete audit on the Defunct Crane Bank after bagging shs900M for the service (FILE PHOTO)

KAMPALA – KPMG, a company that was contracted to audit the books of defunct Crane Bank has failed to complete the report.

The international audit firm was supposed to scrutinize the commercial bank’s books for a period starting January 1, 2016, to January 25, 2017, but up to date, no results have been produced.

During Crane Bank takeover and sale, Bank of Uganda hired KPMG at a total cost of Shs921.7 million to provide a variety of IT support services related to the Tememos T24 software, apparently because: “the BoU team did not have a competent and experienced resource with requisite expertise regarding CBL’s core banking system (T24).”

The report is very vital and could give clues to who exactly took over Shs270 billion, that the Auditor General (AG) has failed to trace, out of the Shs478 billion that BoU injected into Crane Bank as liquidity support.

Crane Bank was taken over by BoU in October 2016 on grounds of undercapitalization, placed it under receivership before selling it to dfcu in January 2017.

In a February 8 2019 confidential audit report to the Speaker of Parliament Rebecca Kadaga, AG John Muwanga revealed that Shs272.6 billion of the Shs478 billion that was meant for Crane Bank liquidity support, could not be traced anywhere.

AG found that BoU officials approved and remitted $53.16 million (more than Shs195 billion) to Crane Bank by Telegraphic Transfers (TTs).

The money was allegedly requested by undisclosed Crane Bank customers and was later released through the bank’s Nostro Account 3582025085001 after BoU officials sent instructions to Citi Bank in New York.

“I traced the accounts in the CBL in the TT requests to CBL Nostro account statement and confirmed that the amounts in the requests tallied with the transfers from the Nostro Account. However, I was not able to confirm the final recipients of the respective transfers from the CBL Nostro account as the account didn’t indicate the beneficiary account names, account numbers and beneficiary bank,” the AG report states in part.

Mr. Muwanga also disclosed that an additional Shs77.5 billion that BoU officials claim they transferred to 46 Crane Bank branches across the country cannot be detected.

“Crane Bank annual accounts for the period starting January 1, 2016 to January 25, 2017 also could not be traced.”

Meanwhile, while responding to the AG’s report, BoU Deputy Governor Louis Kasekende said Crane Bank upgraded the banking software from the Bank Master Core system to T24 system, bringing out the “mismatch” in information and that linking the two systems by dfcu Bank has been a tedious process that might require more time.

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