Report cites procurement flaws in districts

A new report has indicated that there is lack of appropriate checks and balances in procurement processes and award of contracts in districts.

The findings are contained in a study commissioned by the Africa Freedom of Information Centre (AFIC) in collaboration with Oxfam in 15 districts of Agago, Gulu, Lamwo, Nwoya, Pader, Kotido, Kaabong, Kumi, Serere, Soroti, Arua, Adjumani, Koboko, Nebbi and Yumbe.

The project entitled: “An Efficient Public Finance System in Uganda: Promoting Fiscal Measures That Will Enhance Inclusive Growth and, Active Participation of the Citizenry,” conducted between September 2019 and March this year, shows that there is limited disclosure in the public procurement process in local governments.
For example, out of the 15 project districts, AFIC only accessed six procurement plans for the FY2018/2019 and 2019/2020 and 18 contracts.

It was also discovered that on several occasions, beneficiary districts did not follow appropriate procurement standards and often awarded contracts to companies that could not handle the task.

“The contract monitoring exercise revealed that there was noncompliance with the regulation in the selected districts, issues such as prolonged procurement processes, poor planning, retrospective amendments of contracts and inconsistency in project costs, among others,” the report reads in part.

Mr John Asiimwe, the senior programmes officer at AFIC, said the project aimed at contributing to increased public financing to social sectors such as health, education, agriculture and social protection, in order to address needs of vulnerable communities.

The report highlights that bid openings and receipts, evaluation of bids and contract awards are perceived as stages most at risk of corruption and consequently require greater oversight.

The study also revealed the lack of citizen participation triggers widespread bureaucratic, political and corruption.

“Corruption at the evaluation stage leads to numerous complaints that further delay service delivery while corruption in contract management leads to unjustified cost variations, shoddy work and no supply of goods and services,” the report adds.

The report also indicates that public procurement and contracting is a prime candidate for collusion, cronyism and bribery.

It was observed that corruption manifests itself in unnecessary projects, substandard and unnecessarily expensive work, the diversion of resources and unjustified or unexpected price increases resulting in inequity and inequality.
Mr Asiimwe said the absence of appropriate accountability mechanisms in this area implies that ghost projects will be funded, poor quality roads, schools and hospitals will be built, while essential medicines and services will not be delivered.

Mr Joseph Olweny, the financing for development coordinator at Oxfam Uganda, said more than 60 per cent of the local government development budget is executed through public procurements where there is persistent corruption.

“These are some of the key derailing factors we need to jointly address as stakeholders in the fight against economic inequalities,” Mr Olweny said.

In 2015, a study by the Public Procurement and Disposal of Public Assets Authority (PPDA) conducted a procurement integrity survey which also highlighted the perception of corruption existence in public procurement at 71.8 per cent.

The study revealed that 59.8 per cent of the bidders had ever gratified public officers to steer wining of tenders.

Whereas districts are required to have notice boards in line with regulation 44(1) which states: “A procuring and disposing entity shall place a notice board at a location within its premises, which is freely accessible to members of the public,” it was observed that all the monitored districts do not publish the procurement plans on the noticeboards. The report also cited gaps in the budget processes, including implementation.

For instance, Lapul Sub-county in Pader District budgeted for construction of a maternity ward at Shs149m, the request for approval of procurement method to the contract committee indicated the estimated value of Shs149.63m.

The head of procurement at the district advised that the total contract sum is Shs184m and the contract committee awarded Tem Gumi Co Ltd a contract of Shs180m.

By the time the project was completed, it had taken up to Shs191m, amid concerns. “The poor budget planning leads to wastage of the scarce available resources and budget distortion,” the report indicates.

However, Mr Godfrey Largo Oringa, the Pader chairperson, said the problem started with the contractor who was recruited by the central government.

“This complicated our work of handling him because we had limited authority over him. Most of the contractors recruited by the centre have been difficult to manage,” Mr Oringa said.

“By now, we could be using the facility but we have been delayed. It is not very encouraging and we appeal to the centre to cover the gap because it affects district leaders and plans,” he said.

“We are writing to the ministry, expressing our disappointment with that procurement process. As district leaders, we have hunted the contractor and we have tasked him to return to the site,” Mr Oringa added.

The monitoring exercise revealed that out of 15 project districts, only Arua District Local Government does not have a functioning website.

Nebbi has the most updated information on the website, which was the best evaluated bidders for Works FY 2019/2020 followed by Kumi, which has the latest information on the list of disposal items posted in January.

Serere disclosed only one contract. At the time of monitoring, the project was in its initial stages of execution and only one issue was observed; the agreement for the construction of two classroom blocks at Lemtom Primary School was signed on the October 1, 2019 but the execution started on March 3 this year.

The delays in the construction of class rooms affect the education service delivery and plans to decongest pupils.

In Arua, AFIC received four contracts including construction of a five-stance pit-latrine at Ediofe Boys Primary School, Ediofe Girls Primary School, construction of a two-classroom block with an office at Muni Primary School and construction of a two-classroom block with an office at Jiako PS.

At the time of monitoring, three projects were near completion except the construction at Jiako Primary School.

Ms Rose Gamwera, the secretary general of the Uganda Local Government Association, said the absence of total decentralisation has denied districts the opportunity to undertake effective controls.

“Our role is to advocate for enforceable policies and laws and one of the things we have been handling with the centre is the revision of the PPDA Act to ensure districts are directly involved,” she said.

She said they will continue to push for decentralisation to enable local governments manage and effectively monitor contracts.

“There is also a weakness in oversight. Our council organ has not been empowered well to do effective contract monitoring and project implementation and that also creates a problem,” Ms Gamwera said.

But there is more to do with compliance than direct procurements, according to development partners.

“In terms of the level of compliance with the relevant public procurement laws, local governments still have a lot to improve upon. Districts should profile contractors and share contract information with sister local governments to minimise multiple contracting and shoddy works,” Mr Ben Otto Adol, the programme manager at Advocates for Research in Development in Pader, said.

Other proposals
• Strict adherence to disclosure of public procurement information requirements.
•Internet provisions in their planning to ease information disclosure through the district website, GPP and other existing online portals.
•Sanctions and rewards for entities that consistently disclose information on GPP, and this would motivate entities to increase information disclosure.
•Promote capacity building and information sharing among PDEs and civil society organisations to enable the implementation of contract monitoring in different districts.
•Districts to emphasise on the feasibility study before issuance of any contract to avoid delays of commencement of works.

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