June 30, 2013

Minister Denies Knowledge of KAA debt collection payment

Minister Matia Kasaija appearing before the parliamentary committee to answer questions on the KAA-CAA contract
Minister Matia Kasaija appearing before the parliamentary committee to answer questions on the KAA-CAA contract

The State Minister for Planning Matia Kasaija has shifted the blame of having contracted Kampala Associated Advocates (KAA) for a 54bn debt collection in the Ministry of Finance to Civil Aviation Authority (CAA) that saw the tax payer part with 5.4bn as debt collection fees paid to KAA.

Minister Kasaija had appeared before the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) that is currently getting findings on a query that was highlighted in the auditor general’s report of 2009 that revealed the KAA contraction of KAA allegedly in writing without competitive bidding to collect debts on behalf of CAA but with in the running of their contract a specific instruction was given to the company by CAA to collect a debt of 54bn from government.

The audit query also highlighted that KAA increased the legally debt collection fee from 2.5 percent to 10 percent which indicates a 300% increment which the committee members say was expensive on the tax payer and CAA as well and that in this case KAA did not consider the PPDA Act that provides for debt collection and percentage fees required.

Kasaija said that the Ministry of Finance paid the 54bn debt directly to CAA and not through KAA and that the ministry had no influence whatsoever on the debt collector saying that this was a matter strictly for CAA.

He wondered that if KAA was appointed to collect money from the Ministry, then the Ministry would have paid the debt through KAA but not directly to CAA.

Kasaija questioned why KAA never went to the Ministry of Finance to collect the debt if they were contracted to collect the money and he noted that on this matter CAA must be able to answer.

He further notified the committee to hold accountable CAA for having carried out negotiations with KAA and increased the percentage of debt collection fees from 2.5 percent to 10 percent without consulting with the Ministry of Finance an act that saw a lot of money being paid to KAA for a job that he seemed to think was not done.
The Accountant General Bwogi Gustavio testified that he had received a letter from KAA dated 10th August 2010 on debt payment and when the then Finance Minister passed the letter to him, he and his staff held a meeting and agreed that the money should not be paid through the debt collector arguing that if CAA had wanted to pay the money through debt collectors they would have formally written to his office.

He noted that they remitted the money directly to CAA and received receipts confirming the payments.
MP Mathias Nsubuga questioned whether the Accountant general cited any anomaly not to pay through KAA after receiving the letter of debt collection from them but decided to remit the money to CAA.

He even notified the accountant general that the committee had received submissions from KAA claiming to have been in contact with the ministry in the process of seeing that the debt is paid.

The Accountant General said that he was not privileged to most of the correspondents made between KAA and the Ministry of Finance.

The Chairperson of the Committee Patrick Amuriat noted a need for the committee to have the Secretary to the Treasury appear before his committee to answer to some of the queries directing Minister Kasaija to see that the Secretary appears.

On Wednesday this week lawyers from Kampala Associated Advocates (KAA) appeared before the committee including David Mpanga, Joseph Matsiko and John Mwanga and the three answered to some of the queries put against them in the audit report.

The three submitted that they were contracted in a competitive bidding by CAA and that whatever they did during the debt collection was lawful and legal.

They noted that the increment in the collection fees from 2.5 to 10 percent was based on the circumstances that they were to go through to get the 54bn paid to CAA and also noted that the money was paid to CAA and later CAA paid them their collection fee of 5.4bn.

The question now remains whether KAA was paid for work not done or it was contracted genuinely by CAA and paid legally

1 thought on “Minister Denies Knowledge of KAA debt collection payment

  1. The bigger question for me is whether the debt from the Ministry of Finance needed to be collected by a debt collector. Indirect way of defrauding Ugandans. What circumstances are those that made it so difficult to get the Ministry of Finance to pay CAA to the extent that the collection fees needed to be increased 4 fold. Its wastages like these which have led to taxing essentials like paraffin and water. Milking the poor to the core for the benefit of the chosen few.

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