The Parliamentary Public Accounts Committee (PAC) has summoned the board of the Microfinance Support Centre, led by Dr. Emmanuel Aruba, to appear before it over the centre’s failure to establish a governing policy.
The Auditor General’s report for the financial year 2022/23 criticized the centre for lacking governance and risk control systems, which could lead to potential losses from funds disbursed to beneficiaries.
According to PAC Chairperson, Muhammad Muwanga Kivumbi, the centre has operated for 20 years without risk control systems to guide lending and loan recovery processes.
“For 20 years, they didn’t have risk control systems to guide them on how much they are supposed to lend to their beneficiaries and which system they are supposed to use to reclaim the loans given out to their clients,” Kivumbi noted.
The report noted that the centre failed to utilize fully the released funds, with only UGX 12 billion used out of UGX 70 billion, due to the absence of a policy on Expected Credit Loss. The committee has given the Ministry of Finance six months to establish a governing policy to address governance and risk control issues.
The centre’s finance manager, Jackson Sabila, requested PAC to provide a detailed reconciliation of the budget.
However, Deputy Chairperson, Goretti Namugga, expressed disappointment that the centre appeared before PAC for the second time without proper documents. “It’s very unfortunate for the centre to have no governing policy on which it uses to lend and reclaim loans from the beneficiaries,” Namugga said, alleging that large sums of emyooga funds have been mismanaged without accountability.
The committee seeks to ensure that the centre establishes a governing policy to guide its operations and prevent potential losses. The summons comes as a measure to ensure transparency and accountability in the use of public funds.”