KCCA audit unearths fraud at Nakasero Primary School

A new audit report has revealed gross mismanagement and cash misappropriation at the city’s Nakasero Primary School, with administrators unable to account for at least Shs112m.

The money in question, according to auditors, was misused within three years from January 2016.

The Kampala Capital City Authority (KCCA) education director, Ms Juliet Namuddu, commissioned the audit following persistent allegations of corruption and mismanagement at the popular government primary school.

Mr Moses Canon Bwire, the KCCA internal auditor, in a July 31, 2019 report, noted that his team discovered that money withdrawn from the institution’s account for official work was instead diverted for personal use.

The bursar told auditors that in some instances, the head teacher, Mr Charles Ssengendo, who has since been suspended, would give her less money than requisitioned and fail to account for the balance.

According to the audit, school cash was expended on unapproved activities while Parents Teachers Association (PTA) funds were spent without the approval of the association’s executive.

Other findings include absence of a contracts committee, non-disclosure of some income sources for the school, non-submission of financial reports to relevant authorities, excessive cash transactions and delayed banking of cash collected at the school.

The discovery
The misappropriation of funds, Mr Bwire noted in the report, is suffocating the operations and stalling projects of one of the 79 public primary schools managed by KCCA.

“…we noted instances where funds were requisitioned for and payment vouchers prepared by the school bursar, and reviewed and approved by the relevant officers and funds withdrawn by the head teacher but not availed for expenditure as per the payment vouchers and requisitions,” reads in part the report titled, ‘Statutory Audit for the Fourth Quarter of 2018/19 Financial Year’.

It shows that some activities for which funds were requisitioned did not take place.
We were unable to reach Mr Ssengendo, the interdicted head teacher, to give his side of the story on the findings by the auditors who have recommended that he refunds monies he failed to account for.

The KCCA Education Director suspended Mr Ssengendo following recommendation by the auditors to pave way for the investigations. Auditors were unable to establish how much money the school lost over the 39 months covered by the audit but the report details cases of irregular cash withdrawals or improper use.

Mr Peter Kaujju, the KCCA spokesperson, told this newspaper last week, that he had not read the 221-page report and would, therefore, not comment on the findings.

The chairperson of the KCCA standing committee on education, Mr Ismail Ddamba, said they had, in addition to the new audit report, hired external auditors to conduct forensic audit into operations of Nakasero Primary School.

Fraud is pervasive in most government-run schools in the city, he said, and called for thorough examination of books of accounts of all the 79 public primary schools superintended by KCCA.

“We are waiting for findings of external auditors so that we can take appropriate action on Nakasero Primary School. We interdicted the head teacher [Mr Ssengendo] to pave way for investigations. The report [of the forensic audit by external auditors] should be ready in the next two weeks,” Mr Ddamba said.

KCCA internal auditors, in their report under review by City Hall officials, said the suspended head teacher on June 27, 2018 withdrew Shs2.9m under voucher number 016, ostensibly to provide meals for children with special needs in that year’s second term but no such food was provided and the money remains unaccounted for to-date.

The head teacher is reported to have only accounted for Shs5.9m of the Shs10.6m that he withdrew in two days from Bank of Africa in January 2017.

The school bursar told auditors that Mr Ssengendo took away vouchers for the transactions.
On September 20, 2016, the head teacher withdrew Shs8.7m from dfcu Bank in two transactions but handed only Shs5m to the bursar.
We could not independently verify these accounts and Mr Ssengendo is yet to submit accountability.

In other findings, the KCCA auditors reported that managers of Nakasero Primary School opened a reserve account with Stanbic Bank on December 21, 2015, and arranged to use some of the cash to run fixed deposit accounts to rake in profits. Withdrawals from the reserve account were to cater for only emergencies.

The auditors said Mr Ssengendo had by December 31, 2018, withdrawn Shs48m from the reserve account, of which he banked only Shs15m on the school’s operation account with Bank of Africa.

It is unclear what necessitated the substantial withdrawals from the reserve and why part of the money was banked on a different account with another financial institution.

The balance on the reserve account as of December 31, 2018 was only Shs606,472. To-date, nearly Shs33m withdrawn from the school reserve account remains unaccounted for.

The overall objective of opening the reserve account was not achieved, according to the auditors.
They called for reimbursement of missing monies and institution of stronger measures to safeguard the school’s funds.
The haemorrhaging of cash did not only afflict direct remittances to the school.

Accountability queries
For instance, the school’s PTA and the management committee on November 13, 2015 signed a memorandum of understanding to deposit their monies on the SMC bank account. PTA executives were to authorise any expenditures on the account.
Auditors discovered that Shs35m had been withdrawn from the account without authorisation by PTA.

It was also found that the school management does not provide full information and accountability for revenue the institution generates through admission and interview fees, which totalled Shs21.6m for the November 14, 2016, to December 18, 2018, period.

Only Shs6m of the collections was deposited on the school’s account, according to an examination of the institution’s books of accounts.

In other irregularities, the school awarded contracts without a contracts committee, compromising transparency, accountability and fairness principles in its procurements.

More audit findings
Purpose of audit. To assess the general operations of Nakasero Primary School, how funds received are managed and utilised, check whether the school procurement procedures are adhered to, and how the school assets are maintained.
Other findings
• The school does not maintain an asset register to reflect the location, cost, condition and number of assets, contrary to Section 22 (a) of the Education (Pre-primary, Primary and Post-Primary) Act, 2008.
• No titles for Nakasero Primary School land, including the football pitch, rendering them vulnerable to grabbers.
• School assets such as computers, projector and furniture are not labelled.
• A telecom firm that on April 30, 2010 signed to pay $700 (Shs2.6m) per year in ground rent and premium for its mast on Nakasero Primary School has periodically defaulted.
• Number of PLE candidates who obtain Grade One has dropped by 21 percentage points within four years from 2014.

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