A new report of the Parliamentary Public Accounts Committee (PAC) has detailed how Butaleja District technical officials connived with contractors to defraud the taxpayer of at least Shs2 billion.
The committee engaged the 14 local government units against a backdrop of earlier findings of the Auditor General for the 2020/2021 financial year.
The districts include Kaabong, Arua, Pader, Luweero, Butaleja, Karenga, Kapchorwa, Kabale, Isingiro, Sheema, Ntungamo, including Bushenyi-Ishaka and Kabale municipalities.
In the case of Butaleja, the committee findings show how the district’s technical officials, including those at the Ministry of Education, engaged ‘dubious’ contractors who have since disappeared from the project sites upon receiving more than 95 percent of the payment.
It is established that the 12 different projects are valued at Sh2b.
For example, the committee discovered that the Education ministry contracted Masaka Agricultural Dealers Enterprises (U) Ltd to deliver ICT equipment to Nakwasi Seed SS under the Education department at Shs207.4m.
While Shs193.6 million was paid to the contractor, it was found that the equipment delivered has since not been installed and the contractor has disappeared.
Both the supplier and the contractor were procured by the Ministry of Education and Sports.
Irregularities also continued to brew over the construction of a general ward at Budumba Health Centre III by Petex (U) Ltd at Shs99.5m.
While the completion time for the project was June 2021 with Shs94.5m advanced to the contractor in February 2021, the company had abandoned the site by July this year.
Dalach Investments Ltd and Enve Engineering Consults Ltd were contracted by the district in February 2021 to build two classroom blocks, with an office at a contract sum of Shs61.8m and Shs61.9m respectively at Busolwe Township and Busaba primary schools.
Both institutions were expected to be completed by June 2021, and Shs59.2m was advanced to each of the contractors for the project.
Whereas Dalach Investments Ltd handed over the facility to the district, PAC found out that at least 13 windows could neither open nor close properly, the floors and door concrete slabs were poorly constructed with the verandas exhibiting glaring cracks.
At Busaba P/S, the contractor is said to have roofed the building with substandard iron sheets (gauge-30 instead of gauge-28 as specified under the Bills of Quantities).
Fraud is also suspected in routine mechanised maintenance of the 5.6km Butaleja-Suni-Lwamboga road (Shs15.2m) and the 5.5km Nabinghande-Leresi TC road (Shs16.1m) that were conducted during the fourth quarter of the 2020/2021 financial year.
The Auditor General revealed that the roadworks on both roads were incomplete with generally poor workmanship and culverts were not installed as planned, leaving the road susceptible to flooding and erosion.
This newspaper established that the routine mechanised maintenance of the 4km Doho-Namulo and the 5.3km Nalusaga TC-Kanyenya roads also faced similar problems.
Although some sections of the Nalusaga TC-Kanyenya road were repaired at Shs444,000, it had loose surfaces since gravel was not applied, some sections were busy and eroded, the report added.
It also revealed that the district contracted Jenena General Enterprises Ltd to build an out-patient department (OPD) block at Bingo Health Centre II in the second quarter of the FY 2020/2021.
Although the contractor was paid Shs131.9m out of the Shs138.9m to execute the works, an auditors’ inspection of the works found that the site had been abandoned by September 2021.
Fixing of doors, furniture and fittings, painting, water systems and appliances, drainage works, electrical installations, solar power supply and lighting, and fire-fighting equipment had not been done.
Whereas the accounting officer (chief administrative officer) explained that the money was paid to the bank that was instructed not to release it until the works were done, the auditors observed that there were no measures to protect the site from being accessed by unauthorised persons.
According to the report, the payment to build the out-patient department block was irregular since it was done contrary to procurement laws.
“The committee recommends that the police investigate the officers who were responsible for this project (accounting officer, engineer, CFO (chief finance officer) and DHO (district health officer) with a view of possible prosecution.”
Ten of the reviewed procurement files amounting to Shs658.6m that the district issued to contractors revealed lack of contract management plans and reports, signalling possible connivance and fraud.
The audit also revealed that whereas the opening balance in the district’s statement of equity (net worth) was adjusted by Shs631m, there were no documents and schedules verifying it.
The auditors noted that Shs107.5m was given to officials for activities but did not account for the funds.
The committee report pinned Ms Joy Loyce Nambozo, the CAO, for allegedly being responsible for all the messes and losses incurred and recommended that the police (arrest) and investigate her and all the other officials involved.
While responding to the unaccounted expenses before the committee, Ms Nambozo took responsibility for the weakness in advancing the funds.
She said the money was advanced for administrative activities such as trainings but submission of the accountability was delayed.
District authorities also told the committee that the contractors who were hired to construct an OPD at Bingo Health Centre II were told to correct the defects and those who did not comply were arrested
Ms Nambozo said they paid the contractors Shs131.9m out of the Shs.138.9m for incomplete works for fear that the money might be taken back to the consolidated fund since the project was implemented towards the end of the financial year.
However, on the shoddy works on classroom blocks at Busolwe Township P/S, the authorities acknowledged the observation from the inspection, saying the contractors were supposed to fix the works.
While they remarked that payments made to the contractors in several instances were irregular and doubtful, the committee recommended that the contractors involved should be blacklisted by the PPDA (Public Procurement and Disposal Authority).
For example, they said payments made to Jenena General Enterprises Ltd were doubtful as several payments were made on the same day.
“The police should carry out investigations into the conduct of Jenena General Enterprises and the district officials involved with a view of prosecution. The committee recommends that PPDA investigate Jenena General Enterprises with a view of blacklisting it.”
They also recommended that Shs107.5m advanced to the district officials to facilities activities must be recovered by the end of this month since there was no accountability generated.
In June, the State House Anti-Corruption Unit arrested Mr Julius Hirya, the town clerk of Busolwe Town Council and Mr Kainan Hibbombo, the district senior procurement officer, over fraud.
Mr Hirya was arrested for fraudulently awarding the town council structural and planning contract without approval while Mr Hibbombo was held for fraudulently processing an award letter to the same contractor purporting that the district contracts committee had approved the contract whereas not.
The contract was awarded to World Host Consultants Ltd to whom the officials further advanced Shs32m without approval.