How lifestyle audits are helping fight against fraud

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KAMPALA, FEBRUARY10- The charges against which Kazinda was arraigned before court by the Inspectorate of Government […]

KAMPALA, FEBRUARY10- The charges against which Kazinda was arraigned before court by the Inspectorate of Government today, are based on wealth that was found to be incompatible with his known sources of income.

According to the IG, Kazinda was found in possession of property worth UGX 3,187,747,500 millions (USD 917,332) and vehicles worth UGX 769,473,835 million (USD 221,430), wealth that could not be reconciled with his known sources of income.

Kazinda’s case has similarities to the case brought against former MTN accountant John Paul Basabose who was arrested by police after his employer accused him of suspected fraud.

In probing white-collar crime, investigators have typically relied on forensics – paper trails and suspicious actions by a subject- an approach that in many cases, allows an otherwise a guilty party to escape. More recently however, employers have increasingly relied on lifestyle audits which are premised on the gap between ones known sources of income and his expenditure and property holdings. If a persons possessions exceed what can be reasonably accumulated from his known sources of income, it is that the difference is most likely the result of illicit activities.

In Basabose’s case, auditors dispatched by the South African division of Deloitte camped in Kampala for weeks taking note of such minute details as the fact that Basabose was spending UGX60,000 each working day on breakfast for self and spouse delivered by the defunct Kisementi based Crocodiles restaurant. That accounted for more than 50 percent of Basabose’s net pay if he took breakfast from the same source for the 22 working days in a typical month.

Further probing found he held Treasury Bills worth UGX 1.45 billion in addition to an impressive mansion off Entebbe road for whose construction he had hired an international contractor. All these assets could not be accounted for through either his known income sources or endowments. So when billions went missing under his watch, he was the first suspect.

Kazinda’s case has similar hallmarks but we cannot comment on it in detail since it is before the courts. What is clear though is that the Inspectorate in tune with the times and with the Financial Intelligence Authority also setting, the days of brazen abuse of office could be numbered.

Lifestyle audits are in widespread use by employers in South Africa and coupled with tools such as remote data storage and retrieval systems, wayward employees have to their surprise, often discovered that they were just a click away from the prosecutor.

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