Housing Finance Bank holds onto gov’t dividends

Despite government making more than Shs 1.2bn worth of dividends in 2015 from its stake in Housing Finance Bank Ltd, the Ministry of Finance has failed to collect it.

Details of the Auditor General’s report before Parliament’s Public Accounts Committee (PAC) show that in the financial year that ended on June 30, 2015, Housing Finance Bank Limited made a dividend declaration of Shs2.5bn implying that the government, with a 49.18% shareholding in the institution, was entitled to over Shs1.2bn in dividends.

The money is however not reflected in the receivables balance for both the Treasury Operations and the Consolidated Financial statements.

The other shareholders are National Social Security Fund (NSSF) with 50% and National Housing and Construction Company Limited with O.82%shares.

“In the circumstances, it is highly likely that Government is losing revenues through laxity in collection of dividends and that the receivables balance is under stated by Shs1,25bn and any other uncollected receivables,” the Auditor General’s report states.

Before PAC, Keith Muhakanizi, Permanent Secretary to the Ministry of Finance and Secretary to the Treasury, admitted that there was laxity, and called for enhanced monitoring to compliment the efforts of Project Monitoring Unit (PMU).

Muhakanizi told the MPs that the Accountant General had established mechanisms for timely remittance of dividends, adding that communication had been sent to Housing Finance Bank Ltd to confirm and remit any dividends declared.

The MPs however blamed Muhakanizi for failing to discharge his responsibilities and safeguard the interests and rights of the government as a shareholder in the financial institution.