New evidence presented to the court today during the cross examination of Phrase Lubega, MTN\'s Head of Information Technology Systems, identified inefficiencies in accounting of up to shs3 billion. It further established that MTN continued to employ the people who had been implicated in the unexplained fraud for three years for reasons even the audit questioned in the years following.
Telecommunications giant MTN-Uganda ignored three internal audit reviews that pointed to loopholes in the mobile money system costing them over shs3 billion in revenues.
New evidence presented to the court today during the cross examination of Phrase Lubega, MTN\'s Head of Information Technology Systems, identified inefficiencies in accounting of up to shs3 billion. It further established that MTN continued to employ the people who had been implicated in the unexplained fraud for three years for reasons even the audit questioned in the years following.
The genesis of trouble was in September 2011, six months after the introduction of mobile money. An internal audit on the company revealed that 5% of the sampled 325 mobile money accounts had improper documentation and could not be identified.
The sample of accounts was presented to the MTN management of mobile money for action but the accounts were not closed. The IT department which had the ability to close the accounts did not understand how the system works but only knew how to maintain it.
The business management desk of MTN also raised queries in the same year of a difference in general ledger accounts and the amount of money reported. The general ledger account had reported a shs 17.9 billion figure which was different from the balance that MTN had recorded at shs 14.2 billion.
When the audit query was raised, the management of the telecommunications giant ignored it and only cut marks off the implicated people in their internal performance review. As a result, the affected members were to get ‘less salary increments\' and take home less benefits.
This ‘punishment\' looked rather too lucrative for the same percentage of fake accounts persisted in the 2012 and 2013 audits and still MTN did not dismiss the staff complained about yet they continued to lose money.
URN could not independently establish the staff who had been implicated in the audit report due to court legal document obtaining procedures.
However, while testifying before the court today, the IT head, Phrase Lubega said the accounts had been created and known by the management of MTN which worked closely to try and close them. He said, the MTN top management had piled pressure on him to write to the company that supplied the mobile money software ‘Fundamo\' to differentiate administrative accounts from financial administration accounts so that the gap would be fused, but again, the IT department did not know how to do that.
Part of the evidence being adduced against the accused former employees of MTN is the creation of ‘excess accounts\' from where they channeled huge chunks of money.
Even when the accounts were deleted, they somehow found their way back into the system. In the 2012 audit, the audit firm queried how two accounts earlier dismissed from the system had remained operational. But like many queries, it also went unanswered.
Justice Lawrence Gidudu, the presiding judge wondered why MTN did not do anything while the problem persisted for three years.
Four former MTN employees stand accused in the Anti-Corruption of fraud for costing MTN over shs 4billion through the creation of fake mobile money accounts where they sent money to. The case resumes on Thursday with more cross examination of the IT head.
Raymond Mujuni
Freelancer
