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Archive for the tag “PIBID”

The Auditor General Muwanga really told stories on mismanagement and maladministration of the NRM government (Quotes from the End of the Year AG Report 30th June 2015)

Ugandan shillings

As of yesterday there we’re the reported 111 cars that vanished and weren’t procured by a Ministry in Uganda. Because of that I had to look more through the report of the Auditor General John Muwanga. There are many stories; some of the ones in this Report have already been discussed on my page.

There so many stories to pick, but here is some of my favourites that shows all from a goats, expressways to other where money have disappeared, over-compensated or not allocated needed funds for the planned procurement and projects that the Government we’re supposed to do. Take a look!

Indebted to International Organizations:

I noted that a number of Government entities are indebted to International Organizations such as PTA Bank, ADB, EADB, WTO, UNIDO, COMESA and Shelter Afrique. A sample of five entities revealed indebtedness of UGX.77,724,089,603 and US$.4,968,950” (OAG, P: 36, 2015).

Overpay on construction of Kampala-Entebbe Expressway:

“An analysis was done and adjustments for the different features of the two expressways were made. It was observed that the unit cost for the Kampala-Entebbe expressway was US$ 2.315 million per lane kilometre while the similar expressway was US$ 1.204 million per lane kilometer” (OAG, P: 38, 2015).

NAO Project going nowhere:

“The protocol agreement between Government of Uganda (GoU) and Democratic People’s Republic of China (DPRC) was signed on the 27th June 2008. It involved establishment of a demonstration centre under the National Agricultural Organisation. However, it was observed that after hand-over of the site by Ministry of Agriculture, Animal Industry and Fisheries to the DPRC, there was no proper follow up by Government on the project as such it was difficult to establish whether the anticipated funding of RMB YUAN 50,000,000 equivalent to UGX.26 bn was received and how it was applied to the project” (OAG, P: 42, 2015).

NCIP disbursed funds:

“Government signed fourteen (14) protocols under the Northern Corridor Integration Projects where substantial amounts of funds have been invested and implementation is on-going. For example amounts totalling to UGX4.2bn was disbursed to fund the power interconnection and the Hoima-Lokichar-Lamu oil pipeline. However, the protocols do not provide for regional coordination and monitoring as well as the audit framework to provide an independent assurance on the utilization of joint funds. This renders it difficult to track the progress of the projects and follow up the accountability for the funds disbursed” (OAG, P: 43, 2015).

Advances Unaccounted for:

Uganda National Roads Authority: 47,738,040,619 UGX” (…) “Ministry of Local Government:  3,827,011,454 UGX” (OAG, P:87, 2015).

bidco-uganda

Bidco has avoided VAT:

It was noted that as of November, 2014, the outstanding VAT obligations for BIDCO stood at UGX.744,420,170, included in this figure was late payment interest charge of UGX.168,747,557. Accordingly, a sum of UGX.700,000,000 was paid to URA towards settlement of the tax arrears” (OAG, P: 93, 2015). “After the eleven (11) years, BIDCO would start paying VAT directly on its own and from the 12th year start refunding to Government the VAT plus 5% interest for the first eleven (11) years in (8) equal installments over a period of (8) years. This condition was subject to fulfillment of article 4(3) of the agreement which requires Government to have handed fully to BIDCO all the agreed 26,500 hectares of land” (OAG, P: 94, 2015).

ADB Susbscription:

“In August, 2010, the Governing Council of the African Development Bank (AfDB) under the sixth general capital increase of the bank allocated Uganda shares worth USD.19,759,798 payable over a 12 years period in annual instalments of USD.1,646,649. It was noted that the payment of Uganda’s 4th instalment of UDS.1,293,299 which became due on 16th March, 2015 had not been made. As a result, the callable shares related to the missed instalment had been suspended in line with the Board of Governors resolution on the sixth general capital increase of the bank meeting” (OAG, P:95, 2016).

Banana Project:

“The banana project owns land in Bushenyi together with other movable properties. However, it was noted that the land title is still in the names of the project without the legal mandate to continue owning this land of behalf on government unless the expired legal status is resolved following the legal opinion of the Attorney General to transfer the project under Agriculture sector” (…) “During the financial year 2014/2015, the PIBID project had a budget provision of UGX.9bn out of which only UGX.2.7bn was released as vote on account and as a result, activities worth UGX.6,682,145,000 were not under taken. The affected activities include: purchase and installation of machinery and equipment (UGX.2.5bn), Construction materials (UGX.1.457bn.), marketing of the tooke products (UGX.777,665,000) and procurement of transport equipment (UGX.780,000000)” (OAG, P: 102-103, 2015).

Delayed Construction of Katuna OSBP and swamp reclamation works:

“The construction of Katuna OSBP is undertaken at a contract sum of UGX.8,951,277,750 and Swamp reclamation for access road works estimated at UGX.12,000,000,000. The commencement date for the construction was 13th June 2014 and the estimated completion date was set for 13th June 2015. This was later revised to 30th December 2015. Inspection of construction works showed the following” (…) “The EU Confirmed funding on the 12th May 2014 and all the conditions set by World Bank were met including NEMA’s clearance that was received on the 30th April 2014. I noted that GOU was required to finance the building works for Katuna OSBP since IDA credit funding had been exhausted. The contract for construction of OSBP was finally awarded at a sum of UGX.8,951,277,750 on the 5th June 2014. The EU delayed to operationalize her support and the contractor could not commence on the major building works due to delayed reclamation of the wetland where the buildings were to be constructed” (…) “Management explained that heavy rains, poor terrain and lack of material sources in Katuna such as sand are the biggest challenges. The would be material sources such as hard core are not readily accessible due to the hilly terrain of the area and the contractor can only make a few trips only on a sunny day. For materials like sand, the source is Mbarara (about 150km) and the contractor can only make a few trips given that the road (Mbarara-Ntungamo and Kabale-Katuna) is under construction” (OAG, P: 137-139, 2015).

Uganda Police Force:

“A review of the statement of financial position revealed outstanding payables of UGX.16,454,307,782. Payables worth UGX.10,500,682,162 were incurred during the year which implies that management continued to incur arrears without establishing sufficient mechanisms to monitor and control them” (OAG, P: 183, 2015).

Ministry of Local Government:

“A review of the Ministry of Local Government’s expenditure revealed that the entity charged wrong expenditure codes to a tune of UGX.12,086,792,676. This constituted 40% of total actual expenditure for the Ministry of Local Government. Whereas the funds were spent on items for which they were not originally budgeted for, the accounts have been presented in a way that reflects that the amounts were spent on the earlier budgeted items” (OAG, 2015).

M/S Faw Limited:

“A local company was contracted by the Ministry to provide storage space for the various roads, sanitary and fire-fighting equipment procured under a Chinese loan in 2011/2012 financial year from their parent company. The providers were paid UGX.1,416,000,000 during the year 2014/15 for 20 months storage of the equipment delivered. A review of the procurement file revealed the following” (…) “It was noted that only the Contracts Committee decision on a submission (PP Form 209) approving the evaluation report and contract award at a monthly fee of UGX.70,800,000 were available on file. However, the Solicitor General’s approval and contract agreement were on the procurement file. No initiation of procurement, invitation of potential bidders, record of receipt of bidders, evaluation report and PDU submission of Evaluation Committee report to Contracts Committee were on file to support the award” (…) “A review of the availed documentation revealed that two conflicting pro-forma invoices were submitted by the firm with one quoting a monthly fee of US$.14,160 VAT inclusive for ten months, that is; from 1st June 2012 to 31st March 2013 totaling US$.141,600 and dated 17/5/2012 and another one dated 2/1/2012 quoting a monthly fee of UGX.70,800,000 VAT inclusive for twenty months without clarifying the particular months” (…) “The final batch which arrived in August 2013, was commissioned by the president in October 2013 and handed over to police on 19th December 2013 implying storage of at most five (5) months. This makes fourteen (14) total months of storage as opposed to the 20 months billed resulting into a loss of UGX.424,800,000” (OAG, P: 237-239).

updf-south-sudan

Ministry of Defence:

“During the year the Ministry’s total expenditure on land acquired amounted to UGX.1,119,388,145. However, it was noted that the government policy of capitalising the acquired land from the financial year 2011/2012 did not give guidance on what to include as cost of land acquired. As such, this amount could not be verified due to lack of guidelines on treatment of land costs in the financial statements” (…) “It was observed that a sum of UGX.1,000,000,000 was paid to an individual as part payment on a claim of UGX.2,958,668,733 for the compensation of 683 cattle and 119 goats which were handed over to 4th Division for safe custody during the insurgency period in 1986” (…) “It was not possible to confirm whether this claim had not been paid before since it is now 28 years since the purported supply of the animals” (…) “It also appears that these animals were for various people but instead the compensation was made to one individual” (OAG, P: 285-288, 2015).

State House Entebbe – Okello House:

“State House has been occupying Okello House for many years with a tenancy agreement that expired in 2013. However, it was observed that State House has not renewed the tenancy agreement and no rent payments have been made to the landlord despite continued occupancy. At the close of the financial year, a sum of UGX.1.272,363,507 was outstanding in rental arrears” (…) “National Housing and Construction Corporation owns properties on Plot 1 Kyagwe Road–Nakasero which is currently occupied by State House. Documents indicate that National Housing has been demanding arrears of UGX.201,100,000 from State House. These arrears have not been reflected in the financial statements”  (OAG, P: 294-295, 2015).

If you don’t find this interesting that the Government of Uganda is misspending funds in this way and that this is just a figment of imagination as this is pieces of a giant report. The most interesting is that one man got the whole piece of the pie of what happen in 1986 and secondly that the State House doesn’t even have an agreement with the tenant who owns Okello House where the President has gallant dignitaries. That shows the state of affairs, brothers, time for a change and also better procedures and practices! Peace.

Reference:

OAG – ANNUAL REPORT OF THE AUDITOR GENERAL FOR THE YEAR ENDED 30TH JUNE 2015

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Interesting findings from the AG report on “Central Government and Statutory Corporations” – Part One!

Ugandan shillings

Here I will Travers through the report of Auditor General of Uganda’s Annual Report for the year ended 30th June 2015. This is on: “CENTRAL GOVERNMENT AND STATUTORY CORPORATIONS”. I will take the quotes and stories that seem to show parts of how the Government of Uganda works and what the Auditor General have cared about addressing in this specific report. Take a look! This here is Part one!

What it contains:
“This is Volume two of my Annual Report to Parliament and it covers financial audits carried
out on Central Government Ministries, Departments, Agencies, Universities and Uganda
Missions abroad” (…)”Section 2 presents my findings and audit opinion on Government of Uganda Consolidated Financial Statements including major observations” (P: 25).

kampala road work

Nugatory expenditure:
“Government paid UGX.26.1bn during the period under review as delayed settlements of obligations arising from contracts for construction services, Court awards, and contributions to international organizations etc” (P: 34). Comment: The government has no issues wasting giant sums of settlements it seems, shouldn’t’ there be away to not use the money on these settlements?

Unsustainable pension liability:
“The Ministry of Public Service recorded an outstanding pension and gratuity liability of UGX.199,255,907,539 as at 30/6/2015 (up from UGX.108,681,159,047 as at 30/6/2014). It was noted that the gratuity and pension arrears continue to accumulate, a fact which the Accounting Officer has attributed to inadequate budgetary provisions over the years” (P: 35). Comment: There been press release from the Ministry of Finance, Planning and Economic Development during 2015 doesn’t seem like they want to fix it, instead blame the pensioners. Well, they have learned from their master right?

Understocking of the Government petroleum strategic reserves:
In 2012, the Government of Uganda and a private petroleum company entered into a concessional agreement to refurbish, restock, maintain and manage the petroleum strategic reserve facility at Jinja. Despite the concession requiring the operator to ensure that 40% (12million litres) of the storage capacity of the products is available at all times, I noted during inspection in September 2015, there was only 274,000 litres of petrol and 331,000 litres of diesel in stock compared to the required stock levels of 20,000,000 and 10,000,000 litres respectively” (P: 38). Comment: Doesn’t seem like they follow the guidelines from 2012 and proves that the Governmental agencies doesn’t follow the plans they have or have the procurement to buy what their supposed to. This here is just barely enough considering the use of oil and diesel!

JinjaRoad Roundabout Kampala

Construction of Kampala-Entebbe expressway:
“It was observed that the unit cost for the Kampala-Entebbe expressway was US$ 2.315 million per lane kilometre while the similar expressway was US$ 1.204 million per lane kilometer” (…)”This is less than half of the cost of Kampala-Entebbe Expressway which is US$.9.261 million per Km” (…)”However, a review of the services provided by the consultant’s revealed duplication of activities as the originally recruited private firm serves the same purpose as the international firm” (P: 38-39). Comment: This here has been discussed and been put out there, but still proves the misuse of funds, especially when one of the reasons is that you have two companies that have the same role on the site, instead of only one, and that adds the price per kilometer of roads.

Mismanagement of funds under the Ministry of Local Government (MoLG):
“the diverted funds revealed that UGX.3,827,011,454 remained unaccounted for and UGX.635,621,910 was questioned due to inappropriate accountabilities” (P: 39). Comment: Unaccountable use of funds is a beauty and proves that funds have been used without waivers or accounted for; where it has been used is something that we can ask, but they could by Kit-Kat bars in Masindi or extra bottle of cokes in Lira for all we know.

Abim Hospital 2014 P3

Fixed budget allocation for essential medicines and health supplies:
The annual budget allocation of UGX.218bn for essential medicines and health supplies to all health facilities across the country has remained constant since 2011/2012 despite the remarkable increase in the number of patients” (P: 42). Comment: That the money are stagnate while the amount of patience goes up shows quickly; why the hospitals doesn’t have the necessary medicine? That is the simple reason why they don’t have enough.

Regional coordination and monitoring framework for Northern Corridor Integration
Projects:
For example amounts totalling to UGX4.2bn was disbursed to fund the power interconnection and the Hoima-Lokichar-Lamu oil pipeline. However, the protocols do not provide for regional coordination and monitoring as well as the audit framework to provide an independent assurance on the utilization of joint funds” (P: 43). Comment: Money to a project that don’t have a framework for the regional coordination and can’t utilization of the funds, that means they are just sitting in the fund, without any use or monitoring it.

Compensations of Project Affected Persons (PAPS):
“Review of the compensations for the Project Affected Persons (PAPs) on the two projects of Mukono-Kyetume-Katosi road and LPC Busega revealed inconsistencies in the names of the PAPs appearing in the Chief Government Valuers report and those compensated” (…)”A sum of UGX.1.3 bn paid without resolving the inconsistencies was questionable” (P: 44-45). Comment: That already over-expensive road project that has gone over margin and had issues with the contractors of the road-building. So that the government haven’t compensated the once that lost land where the road where built. Therefore the project is even more expensive, since this will be add-ons to the ones that already registered and billed for.

Budget performance-Budget shortfall:
“21 entities budgeted to receive UGX. 2,272,017,747,273, out of which UGX. 1,481,698,945,173 was received translating into a 65% out-turn for the financial year. This left a funding gap of UGX. 790,318,802,100 (35%)” (P: 55). Comment: This here proves how the budget is underfunding and not procuring from the Ministry of Finance, Planning Economic Development (MoFPED) to deliver the cash in-due time to the projects and other state entities that supposed to get funding to do their work. The ministry with biggest shortfall was the Ministry of Energy and Mineral!

MoFPED – Payment of avoidable interest on VAT:
“It was noted that as of November, 2014, the outstanding VAT obligations for BIDCO stood at UGX.744,420,170, included in this figure was late payment interest charge of UGX.168,747,557. Accordingly, a sum of UGX.700,000,000 was paid to URA towards settlement of the tax arrears” (P: 93). Comment: Bidco got to pay less to cash to URA then expected in a settlement, instead of paying everything they needed as they hadn’t cleared in their VAT. So the government was not getting what they we’re entitled so the company of BIDCO got off cheap.

AfDB STATS

Payment of the fourth instalment under ADB Subscription:
“It was noted that the payment of Uganda’s 4th instalment of UDS.1,293,299 which became due on 16th March, 2015 had not been made. As a result, the callable shares related to the missed instalment had been suspended in line with the Board of Governors resolution on the sixth general capital increase of the bank meeting” (P: 95). Comment: This here proof that they don’t take the place in the Pan-African Bank institution, only take the loans from African Development Bank, but not taking charge in paying dues to it.

Presidential Initiative on Banana Industrial Development (PIBID):
“It was noted that the PIBID project has been operating without an approved strategic plan. The strategic plan is supposed to guide the budgeting process by creating integrated link with the annual work plans which feed into the budget to ensure effective service delivery and achievement of set project objectives” (…)”During the financial year 2014/2015, the PIBID project had a budget provision of UGX.9bn out of which only UGX.2.7bn was released as vote on account and as a result, activities worth UGX.6,682,145,000 were not under taken. (P: 100- 103). Comment: 6,3bn was not released so that is under the double, but not triple of the ones that has procured to the PIBID.

Department of Ethics and Integrity:
“Directorate’s approved structure/establishment indicated that whereas 60 posts were approved, only 46 had been filled by the year-end leaving 14 vacant” (…)”that withholding tax amounting to UGX.4,662,524 due to URA was not withheld from seven (7) service providers and as such, funds were not remitted. Failure to withhold tax exposes the entity to a risk of penalties and interest charges by URA which may lead to nugatory expenditure” (P: 111-113). Comments: This here proves the defaults on the hiring of people in the department and also mismanage off tax.

This here must been seen as interesting; the report is big, so there is more to come. This here will be series with many pieces as the actions of government is to interesting to NOT be put on blast. Peace.

Reference:
Office of the Auditor General – The Annual Report for the Year Ended 30th June 2015 – Central Government and Statutory Corporations 30th June 2015.

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