Jinja City leaders have tasked the former head teacher of Jinja Senior Secondary School to explain how the institution incurred a Shs965m debt, which is affecting operations.
The debt is said to have accumulated during the tenure of Ms Diana Nyago, who retired last year to join elective politics.
Some of the debts are captured in the August 8, 2020 Auditor General’s report.
The findings indicate that the Board of Governors resolved that the school acquires a Shs500m loan from Bank of Africa to offset a credit balance of Shs300m at Equity Bank and use Shs200m to renovate the school.
The report, however, indicates that the balance was not spent in line with the Board resolution, stipulating that after offsetting the Equity Bank loan, the rest be spent on completing some of the school projects.
Instead, the accountability in Ms Nyago’s handover report indicates that the funds were spent on ‘advance’ before accessing the loan.
Mr Moses Bizitu, the Jinja City speaker, said Ms Nyago must be held accountable.
“This is a public institution and the debts are not genuine; we have to pursue her because the money has no accountability and has to be refunded,’’ he said.
Mr Bizitu tasked Ms Nyango to explain why she mortgaged the school property and acquired loans before the money was recovered.
The audit report indicates that an overdraft of Shs100m was obtained from Centenary Bank account (Board of Governor’s account) without evidence of its approval from the board or Secretary to the Treasury.
The report also shows that an overdraft of Shs30m was obtained from Centenary Bank (Hostel account).
It is alleged that Ms Nyago mortgaged the land title of the head teacher’s house out of which Shs21.1m was spent on salaries after deducting bank charges, but also without the Board’s approval neither by the Secretary to the Treasury.
Mr Meddie Mbetyo, the chairperson committee of education and social services at the district council, said the law doesn’t allow head teachers to acquire loans without the consent of the Board of Governors or Permanent Secretary Ministry of Education.
“If the former head teacher acquired the loans through right procedure, the school will pay, but if she got the loans without the approval of Board or Permanent Secretary, she is liable,’’ he said.
However, Ms Nyago said she acquired the loans through the right procedures.
“To get a loan, you first get a Board of Governors’ resolution, then write to the Permanent Secretary Ministry of Education with the purpose for which the loan is being sought, then to the Permanent Secretary Ministry of Finance; so, I can’t forge all those signatures,’’ she said.
Ms Nyago instead urged the public to appreciate the contribution she made, including leaving six new buildings at the school.
“You can’t develop a school without securing a loan. I started with a new bus at Shs350m, using a loan acquired from Kenya Commercial Bank , yet I inherited a debt burden of Shs1.2b. I have left six new buildings and I am the first head teacher to leave a new building at the school since Indians handed it over to the government,’’ she added.
Ms Nyango said she mortgaged the school fees collection accounts, but not property, adding that the pending loan is supposed to be repaid within five years.
However, the first instalment, which was due in first term 2020, was affected by the Covid-19 pandemic.
Sources, however, say Ms Nyago had shares in Rengo Millers, which supplied maize flour to the school but still demands Shs194.3m.
Ms Nyango admitted that she had shares in the company but said the co-director got powers of Attorney to run the business alone.
Ms Nyago retired last year to contest for the Njeru Municipality parliamentary seat in Buikwe District.
She lost the race to Mr Jimmy Lwanga of National Unity Platform party.
The Auditor General’s report also indicates that Ms Diana Nyago disposed of four school vehicles without following the right procedure. It states that the Board of Goauthorised the rebranding of Kirinya SSS Football Club to Busoga United FC, but Jinja SSS is not indicated among the shareholders yet every student is required to pay Shs20, 000 per term in respect to the football club.
About Jinja SSS
Jinja SSS has a population of more than 4,000 students and sits on 12.44 hectares of land. It runs an annual budget of Shs4b.It was formed in 1948 to serve the Asians in Jinja, and was envisaged to be exclusively for then emerging business class of Ugandans of Indian origin.