HEALTH PROJECT MESS! Report Unmasks Tax Blunder, Idle Equipment & Millions Lost in KCCA’s CDC Project
A health project funded by the United States Centers for Disease Control and Prevention (CDC) has come under heavy scrutiny after the Auditor General exposed a string of financial, contractual and operational failures that left taxpayers counting losses and critical project activities hanging in the balance.
The findings are contained in the Auditor General’s Closure Audit for the Centres for Disease Control and Prevention (CDC) Urban Health Project (KCCA-CDC) covering the six-month period ended 31st March 2024.
Although the project received an unqualified audit opinion, the Auditor General documented several serious weaknesses that point to poor planning, weak oversight and failures by those entrusted with implementing the project.
One of the biggest red flags concerns the handling of staff severance payments.
The audit reveals that UGX 421 million was paid out as severance packages to project staff. However, instead of remitting the correct amount of tax to the Uganda Revenue Authority, only UGX 25 million was paid despite the actual tax obligation amounting to UGX 144 million, leaving a massive tax gap.
The report also faults KCCA over the management of consultancy contracts during project closure.
According to the Auditor General, despite receiving formal notice from the funders that the project was coming to an end, KCCA neither terminated nor revised the consultancy contract for the baseline survey of the KCCA Urban Health Strategy. As a result, unpaid consultancy arrears amounting to UGX 43 million accumulated.
The audit further paints a picture of a project that was closed without proper transition planning.
The Auditor General found that KCCA had not put in place critical sustainability measures before winding up the project. These included the failure to appoint a liaison officer with Reach Out Mbuya (ROM), failure to prepare a proper handover report and transition plan, and failure to develop long-term strategies to guarantee that the project’s achievements would continue after donor funding ended.
Funding gaps also emerged as another major concern.
At the time the project closed, the CDC Urban Health Project had received only USD 2.53 million out of the expected USD 3.91 million, creating a funding shortfall of USD 1.38 million.
Out of the money received, the project spent USD 2.13 million, leaving an unspent balance of USD 0.40 million. The Auditor General notes that activities which had not been implemented by the time of closure were transferred to Reach Out Mbuya for subsequent implementation.
The audit also uncovered serious shortcomings in procurement and asset management.
Equipment valued at USD 58,000 remained idle for nine months after delivery because there was no bunker constructed to receive waste from the equipment as originally planned.
To make matters worse, the conveyor supplied together with the equipment did not even meet the recommended technical specifications, raising fresh questions about contract management and acceptance procedures.
Despite these glaring shortcomings, the supplier was paid in full.
According to the Auditor General, the contractor received full payment even though one of the contractual obligations—training project personnel on the operation of the equipment—had never been carried out.
Inspectors also found another bizarre situation at the intended installation site.
At the time of inspection, the facility where the equipment was supposed to be installed had instead been taken over by a private operator. Consequently, KCCA was forced to depend on this private operator to replicate black soldier fly production, undermining the project’s intended implementation arrangements.
The Auditor General’s findings expose glaring weaknesses in financial management, project supervision, contract administration and sustainability planning within a project intended to strengthen urban health systems.
Instead of delivering a seamless transition and ensuring donor-funded investments continued benefiting the public, the audit reveals tax underpayments, consultancy arrears, delayed implementation, idle equipment, questionable procurement outcomes and a project that ended without adequate sustainability mechanisms.
The findings are expected to pile pressure on KCCA officials responsible for managing the CDC Urban Health Project to explain how a donor-funded public health programme ended with unpaid tax obligations, incomplete contractual deliverables, expensive equipment gathering dust for months and critical transition arrangements left undone despite advance notice that the project was coming to an end.
GOT A HOT STORY? LET US KNOW!
Got breaking news, explosive secrets, or hard evidence?
Email us: redpeppertips@gmail.com
We accept tips, documents, videos, photos, and recordings—the more evidence you have, the better.
CONFIDENTIALITY IS OUR TOP PRIORITY. SOURCES ARE ALWAYS PROTECTED!
About Post Author
