WATCH: Inside OPM, UPDF, and Police Covid-19 cash deals

Members of MMP Raja Foundation Ltd (left) hand over a cheque of Shs700m to former Prime Minister, Dr Ruhakana Rugunda, and other governemt officials at the Office of the Prime Minister in Kampala last year.PHOTOS/RACHEL MABALA

What you need to know:

When the country registered its first case of Covid-19 in March 2020, the government swiftly responded by imposing a lockdown to prevent the spread of the virus and availed billions of shillings for a multi-sectoral response. It has come to light that several ministries, agencies and departments exploited the situation to cherry-pick service-providers and contractors, which flouted procurement laws. As the Auditor General’s office continues to probe some of these transactions, more suspicious deals are being unravelled, writes Frederic Musisi.

It’s usually the habit of government ministries, agencies and departments to award lucrative tenders away from the prying eyes of the public.
But as part of the International Monetary Fund (IMF) stringent conditions to access its credit facility, government agreed to publish an audit into the Covid-19 pandemic expenditure and recipients of large contracts. 
In turn, government received $491m (Shs1.7 trillion) from the IMF for,  among others; Shs1.3 trillion for macro-economic interventions through Bank of Uganda, Shs462 billion for recapitalising Uganda Development Bank, and Shs121 billion as budget support during the FY ended in June 2020.

Second audit 

A second audit into expenditures and contracts for the Financial Year 2020/2021 ended on June 23, 2021. Five days later, the IMF approved another $1b (Shs3.5 trillion) credit facility to support the country battered by the second wave, which placed its health facilities in a chokehold as it grapples to treat scores of patients.
“The authorities have made progress in publishing information on audits and the use of Covid-19 funds, but further work is necessary to strengthen the accountability by high-level officials,” the IMF said in a statement recently.

“Non-compliance with the procurement regulations exposes public funds to misuse and impairs the achievement of value for money. This lack of sufficient accountability for distributed items created mistrust among the population as well as raising the risk of abuse of the process,” Auditor General, John Muwanga

During the Financial Year 2019/2020, the government secured loans worth Shs4.3 trillion from Stanbic Bank, and Trade and Development Bank as part of budget support. Of these funds, Parliament in April 2020 passed a Shs284 billion supplementary budget for the Covid-19 multi-sectoral interventions.

Earlier on, Shs27.23 billion had been released as the contingency fund; Shs25 billion for the Health ministry, Shs2 billion to the Office of Prime Minister (OPM), and Shs233 million to Uganda’s embassy in Beijing, China, to cater for stranded students, according to the June 15  Auditor General’s audit report.
The report indicated that major shortcomings were in regard to noncompliance with procurement laws. Almost all ministries, agencies and departments used the cover of direct procurement. According to the Public Procurement and Disposal Assets (PPDA) Act, direct procurement can only be used in exceptional circumstances.

Among the exceptional circumstances include situations of insufficient time for any other procedure such as in an emergency situation; or the works, services or supplies are available from only one provider; or an existing contract could be extended for additional works, services or supplies of a similar nature and no advantage could be obtained by further competition, if the prices on the extended contract are reasonable; and or additional works, services or supplies are required to be compatible with existing supplies, works or services and it is advantageous or necessary.

The Auditor General (AG), Mr John Muwanga, mentioned that procurement flaws were registered in several local governments including Buikwe, Kassanda, Amolatar and Kumi. The AG discovered anomalies where procurement items were delayed or not delivered in Nakaseke, Buikwe, and Dokolo districts as well as the Health and Defence ministries. 
Separately, the accounting officers of Uganda Prisons Services, and the Health ministry bypassed their contracts committees, while the Defence ministry, Office of the President, and Uganda Prisons failed to justify the use of direct procurements. Similarly, contracts worth Shs4 billion by prisons, police, and Health ministry did not comply with contract terms and conditions.

Former Premier, Dr Ruhakana Rugunda (left), receives a cheque of Shs100m and food stuffs from Prince David Kintu Wassajja on behalf of Buganda Kingdom last year. 

Non-compliance with procurement 

“Non-compliance with the procurement regulations exposes public funds to misuse and impairs the achievement of value for money,” Mr Muwanga revealed.
From the Shs284 billion supplementary budget, the Office of the President received Shs16b; Shs59b went to the Office of the Prime Minister (OPM) for procurement of food for the vulnerable population in Kampala and Wakiso, Defence ministry Shs30b, Health ministry Shs94b, Shs37b to Police, Shs4b to Prisons, and Shs22b to 134 local governments.
The food distribution exercise, which faced logistical hurdles during the first lockdown last year compelled Cabinet to opt with sending direct cash to the beneficiaries during the current lockdown running until the end of the month.

For instance, food and other items worth Shs55.8b distributed doing the first lockdown, lacked sufficient evidence of acknowledgement to verify the recipients while quality checks by the standards body, Uganda National Bureau of Standards, on a sample of 14,069 metric tonnes of maize flour and 8,547 metric tonnes of dry-beans established that 2,615 metric tonnes (18 per cent) of maize flour and 2,017 metric tonnes (23 per cent) of dry beans did not pass quality checks.
“This lack of sufficient accountability for distributed items created mistrust among the population as well as raising the risk of abuse of the process,” Mr Muwanga noted.



Inflated relief food prices 

According to documents seen by Daily Monitor, OPM engaged 118 food item suppliers. Among them was Apollo Nyegamehe commonly known as Aponye, who was granted a contract to supply 2,100 metric tonnes of maize flour at Shs5.2b, 4,000 metric tonnes of maize flour by Operation Wealth Creation (OWC) at Shs10b, 400 metric tonnes of flour by Mandela Millers owned by Hussein Ahmed Omar Ahmed, and 100 metric tonnes of maize flour by Global Centre listed under Nalongo Letisha Jjingo at Shs250m. 
Link Global Community linked to Shartisnh Amarsnh supplied 100 metric tonnes of flour at ShS250m, Stream Line Consult Ltd gave 100metric tonnes of flour at Shs250m, and Leela Foundation pro was contracted to provide 30metric tonnes of flour at Shs75m, among others. 71 companies and individuals supplied 100m metric tonnes of maize flour at Shs250m.

Aponye bagged another Shs4.4b contract to supply 978 metric tonnes of beans while OWC supervised by President Museveni’s brother Gen Saleh supplied 1,800 metric tonnes of beans at Shs8.1b. Documents reveal that fashion designer, Sylvia Owori, who was in December appointed director of operations at OWC, was in charge of this specific procurement.

Global Centre listed under Letisha Jjingo and Godfrey Ssekoba supplied 300 metric tonnes of beans at Shs1.3b, Olympic Milling listed under names of David Zhao supplied 978 metric tonnes at Shs450m, while Syrd Group Ltd supplied 100 metric tonnes At Shs450m.
Mehta Group supplied 300,000 kilogrammes of sugar at Shs900m, while Pearl Diary Farmers Ltd supplied 23,333 kilogrammes of powdered milk at Shs791m, and further spent another Shs40m on repacking the milk, the deal bagged by KKN Enterprises. OPM spent another Shs99m on buying Personal Protective Equipment from Eryan Business Solutions Ltd linked to Florence Banura.


At least 683,131 households in Kampala, Wakiso and Mukono districts inclusive of 15,242 households and 22,521 persons served by Uganda Red Cross Society donations in Seeta Ward-Goma, Mukono are said to have received food items worth 11 million kgs of maize flour; 1.2 million kgs of beans; 26,221 tonnes of milk and 50,448 kgs of sugar.
However, barely a fortnight after the food procurement had been announced, the State House Anti-corruption Unit arrested four senior OPM officials for allegedly inflating relief food prices by Shs4b. 

A separate audit last November by the Finance ministry’s Budget Monitoring Unit detailed that the “majority of vulnerable households did not benefit from the food donations including many urban and rural dwellers, including the sick and persons with disabilities” while OPM lacked disaggregated data on the distribution lists to determine equitable distribution in terms of gender and equity.

During the fallout between the Executive and Parliament after MPs allocated themselves Shs10b from the health supplementary budget last year, former Speaker of Parliament Rebecca Kadaga accused the OPM of distributing “rotten food and expired milk.”
Former junior Minister for Relief and Disaster Preparedness Musa Ecweru further confirmed that some of the food items were expired and that the suppliers had been eliminated from the procurement. However, documents from the OPM seen by this newspaper show that all 118 suppliers executed their contracts and were paid all outstanding amounts by February 2021. 

More Covid-19 deals
The Defence ministry, Mr Muwanga revealed, could not justify the use of single sourcing for procurements for items worth Shs14.7b. 
Other contracts that rise eyebrows in the audit were signed after the delivery of the goods and payment were executed. 

For instance, Transcell Biotech Systems Co Ltd was contracted to supply among others disposable gloves and gloves for Shs495m. But it’s baffling why the contract was signed on August 13, 2020 yet the items were delivered earlier on in May 5, 2020, and payment made on June 22, 2020.
Similarly, the ministry engaged Luwero-based National Enterprise Corporation (NEC) for the procurement of medical supplies worth Shs826m, the contract was signed on July 7, 2020 after delivery of items on May 5, 2020, and payment was made on June 26, 2020.

Uganda police, documents show, had questionable procurements amounting to Shs21b.  For instance, procurement files for goods worth Shs5.9b were reported missing while the Force’s Covid-19 intervention work plan, the audit noted, was inflated by Shs14.9b through irregular increase in the unit costs and/or the total quantities of items.
Documents further show that police engaged Seka and Charl Ltd incorporated under the names of Ibrahim Sekate, Aisha Sekate, and Diana Nakirinya to supply 19,000 20-litre plastic jerrycans with a metallic stand at Shs1.7b. The audit noted that payment was made to the supplier before he supplied the items.

The same company, Seka and Charl Ltd supplied 27,232 packets of biscuits at Shs451m.
The Purpose Ltd, whose shareholders include Ruth Kankunda and Cilina Kansiime, received Shs1.3b to supply both small—350 militers and large—500 militers—hand pocket sanitisers. According to the audit, there is no evidence to prove that procurement procedures were followed.
Contracts worth Shs2.9b for food—651kilogrammes of grade two posho, 316,815 kilogrammes of dry beans, and 14,285 cartons of mineral water—were awarded to UPDF’s NEC based on call orders which applies in among other instances, for unknown future delivery schedule and where precise volumes or values are not known until after delivery. The audit report observed that police doesn’t have a framework contract for the supply of foodstuffs.


The chairperson of Tiang Tang Group, Mr Paul Zhang (right), hands over five vehicles to the Office of the Prime Minister last year to help in operations against Covid-19.

Police divert Shs5.2 billion

Police also diverted Shs5.2b to classified activities as well as the Defence ministry, which diverted Shs4.8b towards the payment of fuel domestic arrears. 
Reviewing the entire Covid-19 vote, the audit detailed that Shs1.3b remained unaccounted for across 17 ministries, agencies and departments and local governments.

We were unable to get responses from the OPM, Police Force, UPDF and companies involved in procurement deals because several officials didn’t want to comment on the matter.
Uganda’s Covid-19 response in its early days received global plaudits when the country, whose health workforce has immense experience in dealing with pandemics, registered a few cases as the regime enforced stringent lockdown measures. 

When the virus reached every pocket of the country, it exposed the country’s ailing health sector. 
But if there is any accountability that sets a high moral threshold, it’s in regard to the Covid-19 expenditure to combat a pandemic that has left millions without jobs and the economy in a tailspin.
 

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