UFZEPA IMPREST SHOCKER! Investigation Exposes Sh.129.5M Cash Splash @ Free Zones Authority, Flags Sh36.7m Mischarged Expenditure & Failures In Internal Cash Control Systems!
Executive Director Hez Kimoomi Alinda (L), deputized by Elly Twineyo Kamugisha(R) and Board chair Omach (C) are facing uncomfortable questions
KAMPALA – Questions are mounting over the management of public funds at the Uganda Free Zones and Export Promotions Authority (UFZEPA) after an internal audit report exposed questionable expenditure patterns in Shs129.5 million withdrawn as office imprest during the 2025/2026 financial year.
The report, prepared by UFZEPA Manager Internal Audit Omwine Peter on September 14, 2026, raises concerns about how the Authority handled cash meant to facilitate day-to-day operations and emergency expenditure.
At the centre of the audit storm is Shs 36.744 million which was reportedly charged to expenditure votes different from those under which the money had originally been budgeted.
The audit findings raise questions about financial discipline, budgeting and the strength of internal controls at an Authority entrusted with promoting Uganda’s free zones and export sector.
According to the report, UFZEPA withdrew Shs129.5 million in four quarterly instalments during the financial year.
The withdrawals comprised Shs40 million in the first quarter (July–September 2025), another Shs40 million in the second quarter (October–December 2025), Shs30 million in the third quarter (January–March 2026) and Shs19.5 million in the fourth quarter (April–June 2026).
But the auditors were not simply interested in how much money was withdrawn. They examined what the cash was eventually spent on and whether the expenditure was charged to the correct budget lines.
And that is where the trouble appears to have started.
SHS36.7M BUDGET VOTE MISMATCH!
In the first quarter, auditors identified Shs2.65 million spent on painting at UEDCL but charged under a different expenditure item.
The second quarter presented another headache, with Shs4.107 million spent on repairs reportedly charged to an incorrect budget vote.
In the third quarter, the auditors flagged Shs10.292 million in stationery expenditure as mischarged.
The fourth quarter also came under scrutiny, with Shs9.695 million spent on meals reportedly charged to a different budget item.
When the four figures are combined, the questionable budget classifications add up to Shs26,744,800.
This represents approximately 20.6% of the Shs129.5 million imprest withdrawn during the financial year.
The audit’s concerns are particularly significant because imprest is supposed to facilitate urgent operational requirements, not become a convenient spending pot where expenditure is charged without proper regard to approved budget lines.
The Permanent Secretary/Secretary to the Treasury had guided accounting officers that government payments should ordinarily be processed through the Integrated Financial Management System (IFMS) directly to beneficiaries’ bank accounts.
Electronic cash should be used where IFMS payments are impractical, while physical cash withdrawals are permitted only in limited circumstances.
The guidance caps monthly cash withdrawals for each vote at Shs40 million.
MANAGEMENT DEFENDS CASH WITHDRAWALS
UFZEPA management, however, has pushed back against any suggestion that the Authority abused the imprest facility.
In its response to Red Pepper, management said the Shs129.5 million was withdrawn on a needs basis throughout the financial year, against an allowable annual facility of Shs480 million.
The Authority argued that it only utilised 27% of the amount it could have withdrawn.
Management further explained that the quarterly withdrawals demonstrated that it had not treated the Shs40 million ceiling as a monthly entitlement or attempted to maximise cash withdrawals.
It maintained that the money was used to meet day-to-day operational obligations and emergency expenditure, with accountabilities submitted against various operational activities.
However, management acknowledged the audit concerns regarding expenditure charged to incorrect budget votes.
It pledged to strengthen the review of imprest accountabilities to ensure that expenditure is charged to the correct votes and that any mischarges are identified and corrected promptly.
AUDITORS WANT ACCOUNTING OFFICER TO ACT
The internal auditor recommended that the Accounting Officer desist from mischarging expenditure votes and institute proper internal control systems to ensure compliance with financial regulations.
The report also raised wider concerns about the Authority’s financial management arrangements.
In his September 14, 2026 communication to the Board Chairperson, Omwine observed that inadequate internal controls exposed the institution to financial management weaknesses.
He called upon the Board to ensure compliance and take corrective action.
UFZEPA: WE ARE ONLY 18 MONTHS OLD!
In its broader response to Red Pepper, UFZEPA management emphasised that the Authority is only 18 months old and is still building its institutional and operational capacity.
Management said it takes financial accountability, governance and proper management of public resources seriously.
It disclosed that a draft Finance and Accounting Manual had been considered by the Finance and Administration Board Committee and was awaiting submission to the full Board for approval.
The Authority also said it had strengthened its internal controls and was recruiting additional staff to improve the effectiveness of its financial systems.
Management added that it had developed several institutional instruments, including a Strategic Plan, Human Resource and Procedures Manual, Audit Manuals and Board Manual.
Other documents, including the Finance and Accounting Manual, Fleet Management Policy and Incident Reporting Protocol, had been developed for Board consideration and approval.
“The Authority remains committed to addressing the issues raised, improving its internal control systems and ensuring the responsible management of public resources,” management stated.
It also pledged continued cooperation with ongoing investigations to ensure that matters raised are appropriately addressed.
Red Pepper will continue following the financial accountability questions at UFZEPA. More revelations surrounding the agency which have been forwarded to the IGG will be revealed in our subsequent publication.
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