Professor Barnabas Nawangwe, one of the aspirants for the Vice Chancellor job has suffered a huge blow in his bid after an Audit Report released by the Public Procurement and Disposal of Public Assets (PPDA) exposed financial mismanagement at the University.
Other officials implicated include outgoing Vice Chancellor Prof Ddumba Ssentamu and other top managers on the Contracts Committee at Uganda’s premier University.
According to the financial report for the year 2015/2016, Prof Barnabas Nawangwe who is the reigning Deputy Vice Chancellor in charge of finance and administration looked on as dubious transactions were made using university funds.
This is in contravention of intentionally flouting PPDA Regulations on top of pointing to poor management by the Professor of architecture who should have used his position to safeguard the resources of the university.
The details
According to PPDA investigating officers, Prof Nawangwe who directly oversees the finance and administration arm of the University neglected the guidelines of the Circular by the Permanent Secretary and Secretary to Treasury Mr Keith Muhakanizi to sign contracts in local currency.
Instead, several contracts were awarded in foreign currency, contrary to the requirement to quoting in local currency for Procuring and Disposing Entities as per Ministry of Finance, Planning and Economic Development (MOFPED) Circular dated 15th January 2016.
As a result of the mismanagement, sources indicate that the university top management resorted to creating lists of ghost students to account for the lost money.
The financial loss also meant that the university staff was not able to be paid their 70% salary incentive which was promised to them. The University is said to be in debts of over Shs100billion.
The following twelve (12) contracts valued at USD1, 086,912, about Shs3, 084,192,000Bn were signed in foreign currency resulting in the loss of billions of shillings.
The break down
Supply of double cabin pickup vehicle (lot 1) by Toyota (U) Ltd at USD 44,000
Dry Cargo Delivery Truck from
Mac East Africa at USD 57,000
Renovation works at Nsubuga Block and video conferencing Rooms supplied by Technical Services Ltd USD 163,805
Makerere University continues to suffer as a result of poor management
Supply and installation of video conferencing equipment and facility supplied by The Copy Cat (U) Ltd at USD 177,389
Renovation works and alteration works for the pathology/microbiology building supplied by Stone Construction Ltd at USD 327,754
Supply and installation of hotspot solution for University halls of residence supplied by Computer Point (U) Ltd at USD119,994
Supply of Ten laptops for METS Project supplied by MTA Computers (U) Ltd at USD 19,576
Supply of Seven Laptops for repository pilot feasibility study supplied by Elite Computers at USD 18,155
Supply and installation of switches for the University library supplied by Computer Point Ltd at USD 23,021
Supply and installation of multicolored printers for the University library supplied by MTA Computers Ltd at USD 49,925
Supply, installation and commissioning for the material & metallurgy laboratory equipment for mechanical engineering department, supplied by Benefit Worldwide at USD53,454
Supply and installation of laptops for the master card foundation scholars at Makerere University, supplied by Web Infonet Ltd at USD32,839.
Poor Records and Reports maintenance
Investigators observed that in five procurements valued at Shs2,005,495,248, contract management records such as goods delivery notes, payment vouchers, and certificates of completion and receipt of payment were kept by the User Departments and copies of these were not availed to the Procurement and Disposal Unit.
Failure to avail the Procurement and Disposal Unit with records of contract management leads to failure by the Unit to undertake their role of contract monitoring and incomplete records affects the audit trail.
Shoddy budgeting
There were several variations between the estimated and contracted amounts which was observed in the following three procurements valued at Shs835,500,476:
Remodeling of Lira Centre
Shs500,000,000 was estimated but Shs776,484 was spent, hence a variation of Shs276,484,026.
Supply of Assorted Stationery
Shs21,000,000 was estimated but
Shs30,395,620 actual expenditure, hence a variation of Shs9,395,620.
Partitioning Works for Crane Survey Project
Shs19,000,000 was estimated but
Shs28,620,830, leading to a variance of Shs9,620,830.
Variations over and above the estimated amounts could result into creation of domestic arrears. The audit also noted that the Entity did not subject any of its procurements to open competition. None of the contracts entered into the system were completed within the agreed contract time. The Entity did not either complete the contracts within the contractual timelines or did not update the system with contracts completion information.
Faulty Bidding Process
This usually leads to financial losses. The audit observed that all solicitation documents issued for request for quotations did not have the requirement for bidders to submit the bid securing declaration form, contrary to Regulation 53 (9) of the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations, 2014. This was observed in four procurements worth Shs181,353,299.
Failure to prepare solicitation documents:
This was in two procurements valued at Shs88,907,000.
Failure To Apply Preference Schemes:
Preference schemes were not applied on four procurements valued at Shs1,373,496,062, where the open domestic bidding method had been used.
Failure to Maintain Records of the Bidding Process:
The PDU did not maintain documentation relating to the issue of the solicitation document, record of bid receipt in the procurement of non-residential conference package hotel services valued at Shs47,200,000.
Implications here are that bidders may not feel bound to fulfill the conditions of their bids and also unserious bidders may participate in the process.
Incomplete documentation affects the audit trail.
The Procurement and Disposal Unit should ensure that all solicitation documents for request for quotation issued are complete with the requirement to submit a bid securing declaration form in accordance with Regulation 53 (9) of the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations, 2014.
The Head Procurement and Disposal Unit should ensure that under open domestic bidding, preference schemes are incorporated in the solicitation document. The Procurement and Disposal Unit should ensure that record issue of the solicitation document, record of receipt and opening of bids is maintained on the respective procurement action file.
Delays At Initiation
It was observed that the Procurement Department also delays initiation of some procurement. This was demonstrated by failure to commence procurements in accordance with the timelines in the procurement plan in three procurements valued at Shs226,416,120. Delays in the procurement process lead to delays in service delivery.
No Contract Implementation Plans
There were no contract management plans prepared in four procurements valued at Shs1,594,674,986, contrary to Regulation 51 (3) of the PPDA (Contracts) Regulations, 2014.
This could lead to difficulties in monitoring contract implementation resulting into shoddy works.
The Accounting Officer should ensure that contract managers prepare contract implementation plans and reports in accordance with Regulation 51 (3) and 53 of the PPDA (Contracts) Regulation, 2014.
Weak Contracts Committee
The Entity had a fully constituted Contracts Committee, which however never executed its duties to full capacity. The areas of exception noted were:
Approval of solicitation documents that were not complete and lacked the following:
The requirement for preference scheme (for open Bidding);
- Bid securing declaration forms (for request for quotations);
Approval of the Restricted Bidding Procurement method for three procurements worth Shs4,116,005,434 leading to framework contracts as listed under chapter 3.2;
Approval of Direct Procurement without proper justification in two procurements worth Shs224,660,320.
Unjustified use of Direct Procurement was observed in the following procurements:
Procurement of Symbion Architectural & Project for Consultancy Services for supervision for the proposed construction of health Sciences Research Support Centre at Mulago valued at Shs179,860,320.
Procurement of general expert supplies for Tuberculosis survey samples for school of Public Health valued at Shs44,800,000.
Approval of incomplete solicitation documents could result into awarding to bidders who otherwise do not fully meet the entity’s needs, hence poor service delivery. Unjustified use of the restricted bidding procurement method reduces opportunity to attain value for money.
Evaluation Committees
The main exception observed under Evaluation Committee was the participation of members in the evaluation process who were not approved by the Contracts Committee. This was observed in three procurements valued at Shs947,465,449.
Failure to require bidders to submit bid securing declaration forms, contrary to Regulation 53 (9) of PPDA.
This was observed in the following four procurements valued at Shs181,353,299 which include;
Construction of storm water Channel Drainage at Shs21,381,423
Procurement of Health Insurance for 18 students at Shs31,686,476
Seven (7) desktops for the repository pilot feasibility study at Shs61,727,000
Ten (10) laptops for METS project at Shs66,558,400
Signing contracts after expiry of Bid Validity
In two procurements valued at Shs1,119,884,026, contracts were signed after the bid validity period had expired:
Remodeling of Lira Centre
It was valued at Shs776,484,026, bid expired on December 31st, 2015, but was signed on January 11th,2016.
Procurement of Double Cabin Pickup
It was valued at Shs149,600,000, bid expired on April 30th, 2015, but was signed on October 13th, 2015
There was also the procurement of business case consultancy services for Kiira Motor Project, the original contract was for six months and therefore was to conclude on November 18th, 2015. However a variation of contract was done after expiry of original contract.
The contract variation was signed on December 15th, 2015.
Signing contracts after bid validity has expired can lead to bidder rejection of the contract prices or unnecessary revision or even risk of failure to perform.
Payment of Advance Payment Higher Than 30%
In the following two procurements valued at Shs3,001,640,882, providers were paid advance payment of more than 30%, contrary to the maximum amount prescribed by the PPDA Law.
Remodeling of Lira Centre: Whereas the contract was valued at Shs776,484,026, the Contractor was given advance payment of Shs310,593,610, which is 40% of the contract value.
Construction of proposed Research Centre, College of Health Sciences.
This was valued at Shs2,225,156,856, the Entity indicated in the contract that advance payment of 40% was to be paid. Shs890,062,742.4 was eventually paid to the provider.
But irregular payment of advance payment exposes the Entity to financial risk.
The Accounting Officer should ensure that Regulation 44 (3) of the PPDA (Contracts) Regulations, 2014 is adhered to.
Internal Controls
The audit also observed that the Entity failed to implement previous audit recommendations.
It was noted the Entity had been issued its previous audit report for financial year 2014/2015. Out of the sixteen (16) recommendations made, two recommendations representing 12.5% were partially implemented while four (4) recommendations, representing 25% were not fully implemented. The Accounting Officer should ensure that all PPDA recommendations are fully implemented by the Entity so as to improve performance.
