Ugandan officials across four government and state departments colluded in a sophisticated and elaborate fraud to siphon off 12 million euro of aid money, auditors have disclosed.
The scandal has been traced to staff from the prime minister's office, the finance department, including the treasury, and the Bank of Uganda. The Ugandan government has vowed to repay the four million euro of Irish Aid money transferred into unauthorised accounts along with funds from Norway, Denmark and Sweden.
"This was a very sophisticated and elaborate scheme and, given the level of collusion involved, it would have been difficult for normal systems to pick up as key controls were bypassed by the individuals who were responsible for implementing the controls," the report found.
Those involved in the fraud would have had to know IT controls and passwords, auditors said.
The prime minister of Uganda, Patrick Amama Mbabazi, has denied any knowledge of the fraud through his office and insisted none of the missing money was ever paid to him. Two of his senior government officials are on remand facing prosecution, while 17 have been suspended without pay while investigations continue.
Another five million euro went missing in transfers in what auditors said was "fraudulently approved".
The Department of Foreign Affairs report said that the ultimate beneficiaries of the fraud are not known.
Tanaiste Eamon Gilmore said he accepted all the recommendations from the auditors including criticisms of the control and monitoring of Irish Aid funds. He said: "I think the systems control could have been stronger. There are lessons that have to be learned here."
Mr Gilmore: "I have instructed my officials to undertake a review of all management, monitoring and control systems across our bilateral programmes to ensure that risks are being appropriately identified and managed. Every possible measure to minimise the risk of future fraud will be put in place."
The report concluded: "While weaknesses or non-application of controls on both the donor side and the Government of Uganda... made the fraud easier and possibly delayed earlier detection, it is considered that the fraud could only have been perpetrated by a level of collusion that would not have been reasonably anticipated."