Probe reveals new ways of stealing money from government

Kampala. A survey by the procurement authority reveals the raging plunder of public resources through inflated procurement deals and ranks key spenders such as Education and Defence ministries among the worst thieving government agencies.
The “performance results and corruption perceptions in public procurement” survey carried out by the Public Procurement and Disposal of Public Assets Authority (PPDA) blames corruption in procurement on “political meddling in the procurement processes”, impunity and a decadent culture that adores wealth accumulation.
“There is collusion and corruption. Public procurement process is woven in collusions,” said Ms Cornelia Sabiiti, the PPDA executive director.
“This is happening among bidders, leading to low bidder response on public procurement and impeding competition,” she added.

Local governments better?
The 2015 survey, however, found less corruption in local government contracts than in central government where several ministries, departments and agencies abused procurement procedures with impunity.
The PPDA audited 109 government agencies and examined 18,494 contracts worth more than Shs3.7 trillion. In most of these contracts, PPDA discovered failure by the accounting officers to put in place a suitable system to obtain market prices prior to commencement of procurement processes.
The report says this leads to dubious cost disparities, unsolicited bids and single- sourcing.
Explaining the extent of the plunder of government resources, Ms Sabiiti told this newspaper that during the same period, she undertook 121 audits and 79 investigations. Of the 121 audits, only 3 per cent were highly satisfactory, 20 per cent were categorised as satisfactory, 35 per cent moderately satisfactory, 32 per cent unsatisfactory and 10 per cent highly unsatisfactory.

In the survey, PPDA ranked evaluation as the most corruption-susceptible stage with 52 per cent, followed by award of contracts with 12.5 per cent, receipt and opening of bids (12.4 per cent), review of evaluation of bids (10.2 per cent), contract monitoring (6.2 per cent), contract performance evaluation (4 per cent), signing contracts (1.1per cent) and advertising (0.7 per cent).
According to Ms Sabiiti, corruption in evaluation of bids “manifests in collusion between providers and the members of the evaluation committee.”
Best and worst agencies
Among worst performing entities in central government include, Makerere University, Posta Uganda, Kabale hospital, Uganda Blood Transfusion Services (UBTS), ministry of Agriculture and Amnesty Commission.

In local governments, the worst performers are Amuru, Bundibugyo, Kasese, Apac, Yumbe, Iganga, Bushenyi-Ishaka, Kalungu, Moyo and Pader.
The best performers in central government entities are; National Medical Stores (NMS), Arua hospital, Butabika hospital, Muni University, Kampala Capital City Authority, National Environment Management Authority (Nema), National Social Security Fund (NSSF), ministry of Water and Environment, National Information Technology Authority (NITA) and Uganda Management Institute.
In local governments, the best performing districts are Arua, Mubende, Pallisa, Mpigi, Kiboga, Kibaale, Jinja, Mbale, Lira and Kole.

What’s the problem?
In spelling out the real problem, Ms Cissy Kagaba of Anti-Corruption Coalition Uganda blames government’s “lip-service” on the fight against corruption and failure by ministry of Finance to dismiss suspected accounting officers.
“We need to break the syndicates in government because the culprits are known. Ordinary people don’t get these fat contracts, it is people that are “connected” and know how to exploit the system. Now that the President has assured Ugandans that he is going to fight corruption, he needs to walk the talk,” Ms Kagaba said.
The PPDA found that the perception index among Ugandans about existence of corruption in public procurement was at a high 71.8 per cent during the survey, up from 69.8 per cent in the previous survey. And 59.8 per cent of service providers admitted having bribed public officials to win tenders/contracts.

Causes and impact
As a result of greed, ineffective punishment, low salaries, poor supervision, ignorance of rights on the part of service providers and job insecurity, Ms Sabiiti and other actors, said corruption is eroding funds meant for service delivery in the country.
Ms Sabiiti cited weak contract supervision and monitoring where government agencies fail to appoint the supervisors. She said even where supervisors have been appointed, some fail to perform their role. This has led to poor contract performance and increased project costs.

She also pointed out internal and external capacity gaps of low experience, financial and technical competencies, which have become a major hindrance to quality output and value for money of government expenditures.
On account of what Auditor General (AG) John Muwanga called “the growing culture of impunity” in some ministries, departments and agencies, the PPDA report also showed that 54 per cent of respondents reported that bribes accounted for more than 10 per cent of the contract value.
“Sometimes the kick-back is so high that the contractor was left with less than adequate funds to do quality work. This greatly undermines the quality of services,” the PPDA report reads.

Asked why procurement corruption has remained high in government institutions, the Inspector General of Government (IGG), Ms Irene Mulyagonja said at the weekend that the procurement questions require “long answers.” She promised to give this newspaper details on how corruption takes place in the procurement deals and perhaps, the techniques thieving officials use to defeat detection.
The IGG spokesperson, Ms Ali Munira, said there are “many reports” issued by the inspectorate, prescribing what needs to be done to the corrupt and extent of the problem. She promised to avail some soft copies of the reports to Saturday Monitor, but by press time, she had not.
The AG’s new report to Parliament described procurement deals worth more than Shs200 billion as “irregular”. The Parliament’s Public Accounts Committee (PAC), which scrutinises public expenditures in central government, is expected to investigate these cases.

The magnitude
Mr Muwanga noted in his report that a number of government agencies made procurements worth Shs197.6 billion and $3,504,698 (in excess of Shs10 billion) contrary to the procurement rules and regulations.
The violations, according to Mr Muwanga, were manifested in delays, unplanned procurements, use of non-prequalified suppliers, un-accomplished procurements, unauthorised direct procurements, non-delivery and insufficient procurement records.

Accounting officers whom Saturday Monitor interviewed for this article said because of competing interests, procurement processes at the various layers are always characterised by huge variations between the price announced at opening of the tender and the price at which the tender was awarded or failure to ensure due diligence in the tendering process.
“At the Judicial Service Commission, we don’t have those problems but the biggest challenge for accounting officers is procurement. It’s where public servants interface with business people with competing interests,” said Mr Kagole Kivumbi, the accounting officer of the Judicial Service Commission.

“The Contracts Committee is appointed by the accounting officers but in the meeting, they are independent. It’s about following the processes, procurement planning and implementation. If everything is done transparently, you minimise those problems of kickbacks,” he added.
When contacted at the weekend to explain why procurement remains the main channel for corruption in the Education ministry, which tops the worst performers under the survey, Ms Rose Nassali, the permanent secretary, said she could not respond because she had not analysed the PPDA report.
“I need to internalise the report and look at the gaps,” Ms Nassali said. She however, promised to respond after reading the report.

Two years ago, ministry of Education officials requested PPDA to blacklist 18 firms, some of them ‘ghosts’, which had been doing business with government for years. The companies were trying to smuggle forged documents through the ministry of Education.
Details from the PPDA survey indicate that various private companies and their directors forged letters from commercial banks to profit from the $150m (more than Shs300 billion) World Bank grant for the Universal Secondary Education programme.

Why unimpended
Explaining why corruption in procurement has remained unmitigated, the PPDA report says “lack of evidence is a serious challenge given that the parties engaged in the vice have learnt to ensure they do not leave behind any “foot prints” that can provide clues in case an investigation was conducted.”
In 2005, the World Bank estimated that Uganda loses about $300 million (about Shs900 billion) through corruption and procurement malpractice every year. Ms Kagaba says the World Banks figure might have doubled by now given the fact that the government took “no serious step to curb corruption.”
In his new term in office, President Museveni reiterated his promise of “zero tolerance” to corruption but critics say corruption has remained NRM’s biggest failure.
In the early years of President Museveni’s government between 1986 and 1990s, government officials colluded with providers to “supply air” in public procurement deals and bureaucrats presented forged local purchase orders, stamps and invoices with fake signatures to fleece government.

Mr Frank Tumwebaze, the minister for Information, Communications and Technology, said government acknowledges that there is a problem in the procurement area but it does not mean that it has been doing nothing. “We amended the PPDA Act and the Anti-Corruption law to deal with the thieves. Those involved should know that it’s no longer business as usual,” Mr Tumwebaze said. The President has made his position clear, he is going to fight corruption. The public should also know that fighting corruption is a collective effort. The IGG, PPDA, AG and police need our support to deal with the problem.

Action

Ms Sabiiti told this newspaper that PPDA has undertaken a number of actions to enhance compliance of Procuring and Disposing Entities (PDEs) with the public procurement and disposal rules. She cited monitoring of high spending entities such as ministries of Works, Energy, Education and others.
The PPDA has also set up a task force to monitor the implementation of procurement plans for high spending entities. “This is aimed at tracking the progress of the implementation of the procurement plans, procurement performance through procurement audit reports, compliance reports and administrative reviews handled,” Ms Sabiiti said.
According to Mr Kassiano Wadri, who chaired PAC in the previous Parliament, “the only way we can fight corruption in procurement is to centralise costing of goods and services the way it used to be under the Central Tender Board.”
Currently, he said every district or ministry sets its own prices and this is subject to variations without standardisation, hence liable to abuse by government officials.”

In a bid to fight procurement corruption in public offices, PPDA issued prices for common consumer goods that were clearly at odds with the prevailing market rates. However, the problem has persisted partly because PPDA officials insist that because public procurement and disposal is fully decentralised, as the regulator, they only come in to monitor compliance by the entities and recommend corrective actions without enforcement power under the PPDA Act.

According to Mr Nandala Mafabi, a renowned anti-corruption crusader, Uganda is losing more than Shs1 trillion annually through corruption in public procurement deals. This view tallies with findings of the Auditor General and PPDA reports on the extent of corruption in public procurements.
Mr Mafabi, also the Budadiri West MP, and other legislators who talked to this newspaper said this stolen money is more than enough to provide ARV drugs to all HIV- carrying Ugandans who need them and can also effectively cure what they called the country’s “sick healthcare system”.

IGG findings

Although the Public Procurement and Disposal of Public Assets Authority (PPDA) found less corruption in local governments, the Inspector General of Government (IGG), Ms Irene Mulyagonja, in her latest report (July-December 2015) to Parliament, noted that “there is corruption reported in procurement of contractors to undertake various projects in the districts and forms of corruption pertaining to money such as bribery, extortion, embezzlement, and graft are found in local government systems.”

In her findings, municipal councils/town councils were in third position, accounting for 8.9 per cent of the total complaints received. The nature of complaints in this category included mishandling of government tenders/ contracts, conflict of interest, abuse of office, embezzlement and property disputes.
In the report, the IGG notes several cases involving fraudulent procurement deals in central and local governments. For instance , the IGG analysis of the complaints received by the inspectorate during the period reveals that the majority were those against individual public officials who mismanaged government contracts and other forms of corruption, accounting for 21.6 per cent of the total complaints registered.

Ms Mulyagonja blames growing corruption on lack of cooperation from public officers in institutions that are supposed to be partners with her in fighting the vice. She said this delays investigations and in some instances prosecution.
“Some institutions/officials take unnecessarily too long or just ignore to provide the required information until coercive measures are taken,” Ms Mulyagonja said in her report to Parliament. She also cited poor record keeping in government, degenerating morals and inadequate staffing among others.

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