Entebbe – Panic has gripped Uganda Civil Aviation Authority (UCAA) following the mismanagement of Shs547m at the hands of the institution’s Administration Department which falls under the Human Resource and Administration Directorate.
The alleged mismanagement happened at a time when Bashir Kalenge was Principal Administration & Estates Officer.
The scandal was unearthed after an investigation by the UCAA internal audit and risk management department headed by Amin Nsimbe (CPA).
The probe revealed that prices for certain works were inflated, some funds could not be accounted for, shoddy works, non-compliance with procurement guidelines and income tax regulations, construction payments without board and certified engineers approval, expenditure on non-core issues, forging of receipts to support the swindle, unauthorized cash disbursements and those beyond shs20m threshold among others.
Pepper has established that on 17th August 2018, the UCAA management through the office of the director of human resource and administration presented a paper for creating an emergency procurement account (Force account).
This was to be managed and operated by UCAA’s Administration & Estates office. Its duty was to ensure that UCAA estate, land, aerodromes, buildings, residences, as well as various UCAA estate, land, aerodromes, buildings, residences, as well as various UCAA property, are properly maintained, managed, and protected from misappropriation, encroachment or damage by third parties.
UCAA management debated and approved the paper and requested the directorate of finance to set aside shs50m for the force account and provided guidelines for managing it.
Two years later, on 23rd July 2020, the acting director-general UCAA, Fred Bamwesigye, directed internal audit and risk officials to carry out a review on UCAA estates activities before replenishment of estates imprest account in the month of July of the financial year 2020/2021. This was after hearing stories of mismanagement from the estates’ department.
The audit intended to quantify the amounts spent on UCAA estates from October 2018 to July 2020. It also aimed to establish whether the force account money was spent accordingly; to ascertain whether the work done justified the money spent (value for money); and as well whether expenses matched the activities executed among others.
The audit established that between October 2018 and July 2020, Shs547, 175,500 had been spent on UCAA estates.
Accountabilities of Shs 536,966,920 were seen and reviewed by audit and the difference of shs 10,208,580 was expected to be with the cashier as at June 30th, 2020.
Shockingly, a detailed review of the accountabilities, market surveys, site visits and other audit activities established that Shs155, 291,195 could not reflect on the actual works that were done.
It was established that whereas shs36.7m was advanced for the survey and fencing of plots 5-7 & 9 at Eric Magala road in Entebbe, in November 2018, only shs22.6m was spent on actual works creating a variance of shs14.1m.
The audit further found out that Shs25.1m was advanced for the survey and fencing of plot 2 At Nsamizi, Entebbe municipality in December 2018, however, Shs19.2m was spent on actual works creating a variance of shs5.8m.
The report points out that Shs19.8m was released for the survey and fencing of Plot 1 at Nsamizi, Entebbe municipality in August 2018, but Shs14.7m was spent on actual works creating a variance of shs5m.
It was further noted that shs 22.3m was advanced in January 2019 for the survey and fencing of CAA plot at Basudde rise, Entebbe municipality but actual works only cost shs8.5m hence creating a variance of sh12.7m.
In June 2019, according to the report, shs45.5m was advanced for opening boundaries and fencing land comprised in FRV 425 Folio 4, Plot 30 Brother Amans road, Entebbe municipality, yet actual works cost Shs 21.3m which created a variance of Shs24.1m.
The report further observes that whereas Shs 43.8m was in June 2019 advanced to fence CAA land in Plot No.38 Brother Amans road, Entebbe municipality, Shs15.9m was spent on actual works hence creating a variance of Shs 27.9m.
On further scrutiny, in October 2019, UCAA advanced Shs44.7m for boundary opening on land comprising plot 21 harper road and Emokori road, Soroti municipality. However, actual works cost shs24.6m creating a variance of shs20.2m.
More so, whereas shs3.8m was advanced for boundary opening of land in Plots 5, 6, 7 Brother Amans road, Entebbe municipality in January 2020, shs 1.6m was spent on actual works creating a variance of shs 2.25m.
Auditors also established that in February 2020, another shs44.9m was released for fencing of land comprised in Plots 5, 6, 7 Brother Amans road, Entebbe municipality, but shs22.1m was spent on actual works creating a variance of shs22.7m.
It was also discovered that out of shs30.m advanced for fabrication and installation of burglar proofing at CAA head offices in Entebbe, only Shs21.5m had been spent creating a difference of Shs9m.
“There is a possibility of financial loss of shs155m to the authority,” the auditors observe.
VALUE FOR MONEY
The report also cites gaps in the utilization of funds and other resources committed as far as the economy, efficiency, and effectiveness is concerned.
“Audit noted discrepancies in activities carried out during the period under review and cannot assure management that the value for money was attained,” the report observes.
Auditors found out that for activities in the period relating to fencing of the different plots, all the concrete poles used measured 100mm rather than the quoted and billed 125125mm on BOQs. There was use of non-galvanised materials such as binding wires leading to rust. For plots at plot 21 Harper road, Emokori road Soroti Municipality, Brother Amans Road plot 5, 6 & 7, according to the report, fencing was not fully done as per the funds committed for the activities. Auditors established that all the top corners of the concrete poles were not fenced with barbed wire to prevent possible burglaries of chain link as observed at Busudde rise plot where part of the chain-link was stolen. “The gates at Basudde rise, Nsamizi flats 1 & 2 and Eric Magala were not well fitted and aligned which makes it hard to open and close. The gate at basudde rise didn’t have the bottom bolt that is used for locking. A mere look at the gate indicates that the work done was not worth the money spent,” the report reads. There was substandard welding and finishing works on concrete columns where columns where the gates were fitted. Also, the clearance of bushes by 2 metres from the made fence was not evident by the time the audit visited the sites. Rust of the burglar metals at areas like billing office, pay and benefits was observed and this was attributed to failure to apply metal filler to the joints. “For all projects, the guiding wires were not fitted through the concrete poles which made the chain link loose. The concrete poles were also weak and shaky.” The report indicates that expenditures on renovations of 12 toilets and 11 bathrooms for aviation police at Lugonjo were inflated. The audit also noted that shs 13,700,000 was spent on partition works of the verification office at UCAA head office accounts department. A detailed review further revealed that shs5, 200,000 was spent on aluminium partition and shs 4,100,000 on boards yet this was a 10ft16ft partition.
Audit has also established that expenditures on renovations of 12 toilets and 11 bathrooms for aviation police at Lugonjo were inflated. Audit findings show that a total of shs 79,031,420 was spent on them implying that an average of shs3, 592,337 was spent on renovating each toilet and 2 bathrooms at veterinary barracks. However, this was inflated to 8,935,250 for each toilet and bathroom constructed which translates into a total cost of shs107,223,000. This creates a variance of shs68.3 million.
Audit findings further reveal that a total of UGX 139,776,500 cash disbursements were made without Director Finance’s approval which contravened the guidelines that were put in place.
UCAA’s guidelines for the operationalization of the emergency procurement account sec: 3.0[d] states that once the emergency fund requisition has been certified, the principal accountant shall approve requisition up to 5m, send requisitions between shs5m to shs10m to manage to account for approval. Requisition above shs 10,000,000 will be sent to director finance for approval.
The issue of cash disbursements above the threshold of 20 million was also observed by the auditors.
“Since imprest funds are meant for minor transactions and small expenses. The maximum single withdrawal from the fund was set at UGX 20 million, however, the audit noted that amounts totalling to UGX 483,636,920 out of UGX 536,966,920 were drawn from the fund exceeded this threshold.”
According to a report in our possession, the audit observed that Receipts attached on accountabilities ACC19/0571, ACC19/02309, ACC19/0259, ACC20/105 from Abataka Land Services Ltd amounting to UGX 124,233,427 lacked features of authentic receipts such as tax identification numbers, serial numbers, clear description of goods/services supplied in terms of quantities and unit costs. This is how auditors highlight fears of money swindling on pages 12 and 13 of the report: “When audit tried to visit the named offices on the receipt the auditor bounced because the offices were not on the said addresses as at 12th October 2020. We also called the telephone numbers on the receipt and the person who received it offered to meet the auditors on the street saying that they closed the said office on the receipts. He further said that currently they have no office but confirmed that he is the issuer of the receipts and to him they are genuine. Also when the auditor contacted land associated Consults Ltd another issuer of receipts to UCAA estates management office. The person who answered the call said that they closed offices and business during the outbreak of COVID-19 pandemic and couldn’t meet us. However, Audit observed that the latest receipt issued by land associates consultant limited was on 28th May 2020 of shs45, 000,000 indicating that land associates owed a balance of shs 34,031,420 which is yet to be accounted for. Suffice to note is that by May 2020, the world and Uganda was in the middle of COVID-19 pandemic for them to say that they closed the office just before the COVID-19 outbreak.”
The auditors make it clear that shs 124million could have been lost and more shs 34 million will never be accounted for due to office closure.
SPENDING’S ON NON-ESTATES MANAGEMENT RELATED ACTIVITIES
The objective of setting up this account was to meet the emergency and urgent needs of the estates’ department, however, Audit established that a total of shs 241,255,427 was spent on activities outside the scope of estates such as rehabilitation of sanitary facilities at Lugonjo Avpol, Burglarproof at head office, partitioning of verification office, facilitation to the team from the Ministry of Lands, housing and urban development, construction of toilets for vet and Lugonjo barracks. All those activities reportedly fall under the aerodrome maintenance department of UCAA under the Directorate of Airports & Aviation Security (DAAS).
It was also discovered that payments for construction works were made without approval from certified engineers.
“A total of Shs107,223,00 relates to construction of new water borne toilets and bathrooms at veterinary barracks and shs79,031,420 for the renovation of toilets and bathrooms at Lugonjo. Audit noted that the above payments were made without approvals from a certified engineer yet it’s a requirement as per Engineers Registration Act 1969. It was also noted that full payments were made before completion of works, a case in point is Lugonjo toilet renovation works which were on-going as at 21st September 2020 when audit inspected the site.”
FLOUTING PROCUREMENT GUIDELINES
Audit also reportedly noted that the contractors were often handpicked by the estates department without bidding for the works. “The selection of contractors was at the discretion of the estate’s officer which is against the principle of the competitiveness which calls for all procurements to be conducted in a manner that maximizes competition and achieves value for money.” It was also noted that the contractors were not prequalified as UCAA surveyors and engineers.
Audit also reported in its findings that there was non-compliance to sec 95A of the PPDA act relating to force account mechanism which requires an entity to undertake works using its own personnel and equipment or of another procuring and disposing entity. “It was noted that none of the work was done by internal staff or equipment of UCAA. Suffice to note was none compliance to emergency procurement,” the report further points out something that minimizes competition and threatens value for money goals. Audit findings also reveal that for all the monies spent, UCAA officials did not deduct the 6 percent withholding tax as required by the income tax act. Relatedly, Abattaka land services, Bold Capital Ltd were not registered for VAT while Nyombi M Metal fabricators, Land Associated consult ltd and Tamusuza fabricators were not registered taxpayers yet UCAA is required to deal with only Tax complaint companies.
We have learnt that the damning report was presented to the outgoing UCAA Board of Directors for action. The board was then chaired by Eng. Edward Mike Ndawula. Olive Birungi Lumonya who is now vying for the UCAA director-general job was also a board member. Other members were Eng. Mackenzie C. Ogweng, Zubair Musoke Musaayi, Angela Kiryabwire Kanyima, Asiimwe Rwekikiga, Enoch Rukidi, and James Kubeketerya.
The report also sent tongues wagging, with many UCAA employees sensing veiled favouritism and protection of the responsible officials to an extent that some have since been promoted. Pepper contacted UCAA Manager Public Affairs Vianney Luggya for a comment. For a month, this publication is, however, still waiting.