Govt loses over sh430b to private
firms
Publish Date: Oct 17, 2012
Each passing day, the Government loses hope of recovering sh432b from several companies, including 10 ghost firms, which it gave loans in the 1990s.
This was revealed on Tuesday by officials from the Ministry of Finance headed by the accountant general, Gastavio Bwoch, who pleaded with Parliament to help them recover the money.
They were appearing before the committee to answer queries raised by the Auditor General to Parliament.
According to Bwoch, the finance ministry gave out 40 loans to several state and private enterprises and agencies to help them import goods that were scarce at the time.
The money was advanced to the firms under the Japanese Non-Project Grant Aid. Bwoch told MPs that efforts to recover the money had hit a dead end as some of the companies could not be traced by the registrar of companies.
Other companies, according to Bwoch, have since been privatised or wound up.
The commissioner for the treasury department, Isaac Mpoza, said although the matter was handed over to the Solicitor General for advice, he proved “not useful”.
“He raised technical questions which we could not answer. When we checked with the registrar of companies, we discovered that many of them (firms) do not exist,” Mpoza said, causing murmurs from MPs.
In October 2010, the registrar of companies wrote to the Ministry of Finance, indicating that 10 companies could not be traced in the system.
“We shall continue the search and update you accordingly,” the former acting registrar general, Robert Mugabe, wrote to the Accountant General.
According to the list, the companies that could not be traced include Baggrey Trading Company, BTS Uganda Limited, Kibuguma Coffee Growers Makyo Enterprises and Marks Pharmaceuticals Limited. Others are Seki Trading Company (wound up), UPET, Jasaba Pharmaceuticals Limited, High Way Motors Limited and GM Combine.
Among the documents before the committee, Bwoch on March 28, 2011, wrote to 17 companies, including those that could not be traced, to settle their debt obligations.
A report from the privatization unit, however, indicated that some of the privatised state enterprises had not cleared the loan because they were making losses, while the others had their liabilities taken over by the Government after the divesture.
The committee deputy chairperson, Paul Mwiru, said: “By the time you signed these agreements, you should have confirmed first that these companies exist.”
The chairperson, Kassiano Wadri, said: “We cannot accept a write-off because some of these companies exist and are making profits.”
The committee resolved to summon the privatisation unit and acting secretary to the treasury, Keith Muhakanizi, to appear before the committee today and explain the matter.
67% of aviation authority staff are ghosts - report
http://www.monitor.co.ug/News/National/67++of+aviation+authority+staff+are+ghosts+++report/-/688334/1535062/-/14ru5rjz/-/index.htmlBy CHRIS OBORE
Posted Wednesday, October 17 2012 at 01:00
Kampala
The Civil Aviation Authority, which faces a big staff shortage, paid out at least Sh1.2 billion to ghost employees, a government audit report says.
The Internal Audit and Inspectorate Annual Consolidated report for 2011/2012 reveals that last December, nearly 600 people illegally received salaries from the authority. “The audit team requested for a staff list in order to ascertain how many staff of each category are in employment. However, management provided a list that did not appear original, showing only 287 employees and leaving out some staff,” the report says.
According to the CAA’s establishment, the authority is supposed to have 991 employees.
“A review of the payroll for December 2011 showed that 895 people got salaries from the CAA. Considering the staff list and the payroll, there are 608 ghost employees, representing 67 per cent. The gross salaries paid for December 2011 was Shs1,718,767,199 (Shs1.2 billion),” the audit states.
However, the audit found that upcountry stations are inadequately staffed and controls cannot be enforced, especially in key areas, including accounting and firefighting.
Whereas the establishment provides for airfield keepers and firemen, there were hardly any such staff at the time of inspection.
The auditors recommended that management confirms the existence of all those on the payroll and explain why they are not on the staff list. The CAA is responsible for the regulation of civil aviation, the provision of air navigation and air traffic services as well as ownership, operation and development of aerodromes, including Entebbe airport.
Mishandled funds
Also revealed is the suspect handling of money meant for the refurbishment of the airport ahead of the African Union summit in July 2010. The CAA received Shs280 million from the government, of which Shs200 million was meant for lighting up the apron and Shs80 million to buy an outdoor carpet for the VVIPs. “During the audit, it was found that the preparations were not done and the money was not returned to the Consolidated Fund,” the report says.
“Inquiry into the balances on the account with a view to possible return to the Consolidated Fund led us to a payment for an outdoor carpet worth Shs83,603,000 delivered on May 2, 2011, a year after the summit. We could not take this payment to relate to the summit.”
The auditors say failure to fix the lighting and acquire the carpets risked ruining the country’s reputation and demand that the cash be returned to the Consolidated Fund.
The auditors say the inefficiency and failures are partly due to the fact that CAA is both the regulator and an aviation operator.
The authority was also faulted for awarding huge sums of money to contractors without seeking approval from the Solicitor-General and “failure to hedge foreign currency receivables against foreign exchange risk”. “Some of the simplest inhouse hedging mechanisms such as ensuring that loans for local shilling transactions are borrowed in local currency and not dollars have not been observed,” the report adds.
The audit also accuses management of exposing the authority to “foreign exchange risk by entering into contracts with suppliers”. For example, the Chogm contracts denominated in dollars yet some of the companies involved were local. The CAA, the audit report adds, also overstated both its debtors and creditors.
Report finds fewer poor Ugandans
http://www.monitor.co.ug/News/National/Report+finds+fewer+poor+Ugandans/-/688334/1535858/-/uo7q65z/-/index.html
By EMMANUEL GYEZAHO
Posted Thursday, October 18 2012 at 01:00
KAMPALAThe number of Ugandans who are chronically poor and live below the absolute poverty line has dropped by half from a high of seven million in 2005, a new report shows. But variations in population growth and widening income inequality over the years, experts say, present a far grimmer picture than what this marked decline may want to suggest.
According to the second Uganda Chronic Poverty report, whose findings were released in Kampala yesterday, while Uganda has made significant efforts in reducing the proportion of citizens and households living below the absolute poverty line, “nearly 10 per cent of the households continue to live in persistent or chronic poverty.”
That places the number of citizens in chronic poverty at 3.4 million given estimates of Uganda’s population at 34 million citizens. It is a significant drop from earlier findings in 2005, which placed the number of citizens in chronic poverty at seven million from a population of 26 million citizens.
Chronic poverty is characterised by persistent lack of basic life necessities like food, clean water, shelter, beddings, clothes, healthcare and education. Despite the decline, the report expressed deep reservations about the government’s current poverty eradication strategies and urged a complete turnaround.
“Otherwise, Uganda’s achievement of the first millennium development goal of halving extreme income poverty earlier than 2015 might not be sustainable,” said the report, the result of a three year research by Chronic Poverty Research Centre, a global network whose work in Uganda is coordinated by Development Research and Training.
Researchers faulted government for treating poverty eradication as “homogenous” and rolling out “blanket” programmes despite evidence showing that poverty varies across the country.
The researchers also picked issue with the design and implementation of several poverty eradication programmes, noting that citizens in chronic poverty were deliberately being kept out of.
“Access to public extension programmes such as the National Agricultural Advisory Services, which are intended to enhance agricultural production and productivity is skewed to well-to-do households and not evenly distributed across region,” said the report. “Similar observations are noted in access to community infrastructure. There is therefore need to ensure that the benefit of economic growth reach the poorest in a way that expands their opportunities.”
A senior technical officer at the Ministry of Finance, Mr Fred Mugisha, whose daily brief involves quantitative policy analysis and poverty monitoring, admitted that the government’s policy flows are “a matter of design and implementation.” “The government interventions are usually mass interventions,” he said. “But now for the first time we have been able to know the exact number of chronically poor people so now we can begin to re-engineer our programmes.”
