Latest Auditor General report excludes key corruption scandals

In 2018, the government commissioned a two-storeyed building to house the Auditor General’s office at Hoima district local government headquarters with the aim of facilitating efficient auditing and enhancing accountability in the country’s mid-western region.

To the dismay of anti-corruption campaigners, the office is yet to serve well its intended purpose.

Many scandals and instances of misuse of public funds in Bunyoro sub-region that have recently dominated public debate and led to outrage and calls for accountability have been omitted in the latest report by the Auditor General (AG).

The discrepancies that have been cited in the report for the 2021/2022 financial year include financial mismanagement, corruption in revenue collection, procurement and misallocation of funds, among others.

Alvin Mutebi, a research and advocacy officer at the Anti-Corruption Coalition of Uganda (ACCU), a Kampala-based civil society organisation whose primary role is to fight corruption, said that the omission of key audit issues sets a bad precedent, creating a gap in checks and balances for service delivery in crucial sectors.

Mutebi says the omission also raises questions about the effectiveness of the auditing process and creates mistrust of these audits by the public.

He said: “What is more worrisome is that the conspicuously missing issues in audit reports are cross-cutting across the country. After discussing with the district leaders, they signal what they feel the AG could have captured.”

Influence from district officials

Mutebi thinks that district officials influence these audits by hiding key issues, which they feel will cause them problems.

According to him, the findings should be used to find solutions to improve public accountability and foster service delivery after presenting them to stakeholders for engagement on how to improve service delivery – as opposed to pointing fingers.

On the other hand, Mutebi avers that what the community should know is that it is not necessary for some things to be brought to the attention of the AG, noting that the AG is more interested in policy-related issues and yet district leaders look at them as pressing issues to be addressed.

Some experts suggest that political influence in the appointment of accounting officers causes oversight, leading to unaddressed abuses.

In his 2018 paper, “The role of auditing in the fight against corruption, Kim Klarskov Jeppesen, a professor of auditing and programmes director at Copenhagen Business School, said that when accounting officers are appointed with political influence, auditing against corruption is made difficult by an administrative chaos where information is not recorded.

Jeppesen noted that auditors may lose their independence and objectivity by being politically appointed and that lack of transparent administrative routines allows civil servants excessive discretion and provides no clear audit criteria.

Lack of political will

Ismail Kusemererwa, the Executive Director of Mid-Western Region Anti Corruption Coalition (MIRAC), a Hoima-based organisation involved in the fight against corruption, blamed it on weak sanctions against corruption and lack of political will to address recommendations by the AG.

Kusemererwa said that the annual audits are simply ceremonial in nature, which makes corruption among civil servants thrive unabated.

Road projects

Residents have raised concerned by the AG’s failure to scrutinise the ongoing implementation of the Uganda Support to Municipal Infrastructure Programme (USMID) in Hoima City, where they feel the delays in completing the road works in time seem to have cost taxpayers’ money.

Ismael Kusemererwa, the Executive Director for MIRAC. Photo by Robert Atuhairwe/The Albertine Journal.

In March this year, traders along Perssy Road in Hoima City raised concerns over the “snail’s pace” at which road construction projects were progressing, leading to disruptions in their day-to-day operations.

In November of last year, China Railway 18 Bureau Group Company Limited (CR18G) was awarded a contract worth sh30b to upgrade four kilometres of roads. Completion is expected next month after an extension of the contract.

City residents continue to wonder why, with the City’s USMID project where 70% of the road network has been paved from gravel to bitumen standards in the central business district (CBD), does not do routine maintenance on roads outside the town centre which are in bad state – almost impassable.

John Asiimwe, a resident of Kinubi Cell, said that the City is supposed to have constructed more roads and yet such matters are not captured by AG’s report.

The Hoima City mayor Brian Kaboyo, who late last year denied that there was corruption in the works department, said that the roads are in poor state because the City is underfunded.

Kaboyo said that out of the sh22b that is required to upgrade the usually muddy road network, only sh15b was provided to the City, which prompted authorities to work on a few roads outside the central business area.

Margret Manday, the Hoima Central Ward councilor who also doubles as Secretary for Works, revealed that the City’s only motor grader developed mechanical challenges, leading to delayed rehabilitation of the road network.

She added that the poor state of roads in the city is usually exacerbated by the rains that disrupt the rehabilitation works because they are halted to avoid making the roads slippery and impassable for the users.

Bonaventure Kiiza, the Hoima City Engineer, told The Albertine Journal that out of the 627 kilometres that needed to be worked on, only 11 kilometres were in good state.

Cosmas Byaruhanga, the Masindi district chairperson, said some projects fail to get completed on time due to the unrealistic commissioning timelines, which is instead perceived as corruption.

“We are likely to return some money as not spent since you cannot complete a project in one year or recruit staff when you are given a lot of conditions. We need total decentralisation,” he said during an anti-corruption meeting in Masindi town in May.

Misappropriation of City funds

This publication also understands that the funds that are annually allocated to the City for the rehabilitation and running of a waste processing plant in Kibati Cell, East Division, Hoima City cannot be accounted for.

Anonymous sources also said that the money from taxes collected from billboards, street vendors and hotels was never reflected in the audit as having been misappropriated.

Another issue missing in the audit report regards an abattoir worth sh18m in West Division-Hoima City, which was relocated to East Division without due diligence.

Ahammad Mugisa, the City Deputy Town Clerk, said the abattoir will be established where it was meant to be, but he didn’t provide details.

Award of contracts

Politicians and the technical officials have also been accused of awarding themselves some of the contracts and failing to supervise themselves and do due diligence, issues that have remained uncaptured in the report.

Many structures are involved in procurement, such as the user committee, user department, and supervising and evaluation committees.

Still, execution of projects leaves a lot to be desired. For instance, the construction of the Budongo Seed School in Masindi district was poorly done, and structures soon developed cracks on the ceiling and the floors.

Shoddy work was also reflected on the construction of the football field – with proper demarcation – and the computers that were supposed to be provided for the school’s computer laboratory were never delivered.

Jackson Mboneraho, a councilor for Masindi Municipality, said during a regional dialogue on November 15 at Kolping Hotel in Hoima City that incompetent contractors rush to politicians to help them get contracts.

Mboneraho cites an incident in Masindi where last year the district got sh2b to work on roads but the works were so shoddy that the roads have already been washed away by rains.

“In equations where there is no noise, just know the equation is balancing. We must stand and judge them by the output,” he said.

Planned revenues not raised

In Hoima district, the AG report failed to note the failure to realise planned revenues.

A councilor alleged that revenue collected in several markets was not declared as local revenue, resulting in the district losing income.

It is also said that some markets were being run by some members of the executive.

Away from the markets, in April 2021 the district signed a memorandum of understanding where it was supposed to receive a 10% commission on every trip of sand supplied to SBC International, a company constructing Hoima International Airport.

Every trip of sand was being supplied at sh600,000 and the district was meant to get sh60,000 per trip.

However, by February 14, 2022 when councilors raised accountability issues, the district had only received sh7.8m.

Land issues

Others not captured in the aforementioned report include Kaiso-Tonya villages in Buseruka Sub-county in Hoima district, where part of the community land where an oil camp was established.

Here, locals were supposed to get compensation through Hoima district local government, but nothing has been done.

Under the arrangement, the district is supposed to get 25% of the money and the affected community 65%.

And while the communities are supposed to decide for themselves how to use the money, the district has allegedly been receiving the money through sub-counties where they used some of the said funds to procure for them goats in the last fiscal year.

In a civil suit No. 29 of 2016 in the Masindi High Court, Enos Isingoma and 24 others versus Tullow Uganda Operations Pty and Hoima District Local Government, the communities sought compensation because the defendant had been using their land without compensation.

Tullow firmed down its assets to China National Offshore Oil Corporation (CNOOC) Uganda Limited, which is occupying the land for a camp.

Irregular recruitments

Development Response to Displacement Impact Project (DRDIP), which is a World Bank-funded project meant to address unmet social, economic and environmental needs in local refugee host communities, was equally riddled with scandals in recruitment and shoddy deals in procurement.

Although some of the matters are not captured in AG reports, the recruitment was not based on merit but “technical know-who”.

For example, Anna Mugoya, the wife to the late Hoima district chairperson, Kadiri Kirungi, was booted as the project’s coordinator because she did not meet the required qualifications.

The would-be beneficiaries of different livelihood projects like the Albertine Sustainable Development Programme (ASDP), an agriculture cluster development project, have not benefited many because people are asked for bribes.

In Kikuube district, apart from scandals in the DRDIP procurement, there were issues of bribery in recruitment, which did not feature in the report even though the Inspectorate of Government was notified.

Shoddy works in Seed Schools

The construction of a certain Seed School was shrouded in scandals with authorities accused of negligence of duty by failing to supervise the contractor, which led to shoddy works and loss of taxpayers’ money.

It is alleged that officials connived and diverted large sums of money meant for the construction, and all this doesn’t appear in the report.

There was also questionable land deals and abuse of the Land Fund. William Mwambu, a councilor for People with Disabilities and a member of Masindi district’s finance committee, said many issues are not followed up because they affect the common people and not those in higher offices.

“Our prayer would be to see every issue highlighted in the AG report addressed,” he added.

Few issues captured the AG report

However, the audit report captured gaps and misuse in payments of wages, pension and gratuity, underpayment of salaries, computation and deduction of Pay as You Earn (PAYE), inconsistencies in interface files and payroll register and misclassification of expenditure.

Others were corruption in revenue collection, unspent balance, failure to channel money to organised groups for improvement of livelihoods, especially in Buliisa district.

There was also the issue of poor allocation of Uganda Road Funds, failure to purchase the planned mortuary fridge at Masindi Hospital and failure to follow-up on recruitment of staff at the said hospital.

Kusemererwa says many officials involved in these corruption scandals have been let off the hook.

“The key issues are never captured. They (civil servants) now know they can explain when audit queries arise, when they are summoned by the Public Accounts Committee (PAC) and explain. Whether satisfactory or not, it just ends there,” the MIRAC Executive Director explained.

Irresponsible auditing not new

The debate concerning the auditing profession’s responsibility in relation to the detection of corruption is not new.

In 1977, Brief pointed out that the issue was the subject of debate in the USA in the late 19th century, with “no unanimity of opinion” among accountants regarding the role of auditing.

More than a century later, auditors are still reluctant to address corruption.

“If auditors detect corruption, this may also serve as deterrence and thus prevent further corruption, and if auditors prevent corruption, there will be less to detect,” Brief said.

The reason for preferring the preventive role appears to be rather pragmatic. “Experts agree that it is easier to prevent fraud and corruption than to detect it,” Borge said in his 1999 report while in 2006 Khan said: “The auditors cannot play a role in detecting corruption. However, they can help preventing it by pointing out areas where opportunities for corruption exists.”

Efforts to get a comment from Gloria Namugera, the spokesperson for the Office of the Auditor General on whether the AG was facing human resource challenges to superintend over auditing, were futile by the time of filing this story.

Despite the highlighted challenges, an AG source who spoke to this publication on condition of anonymity said that because the matter is sensitive, the institution defends its approach, saying that they conduct sampling rather than 100% audits due to operational differences.

Our source emphasises the role of the Public Accounts Committee (PAC) in making recommendations, which the Permanent Secretary to the Treasury is supposed to address.