Local Government Ministry Spends Ugx647m on 'Ghost' Workshops

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In short
Up to Ugx2Billion was advanced to staff in the ministry of Local government through their personal bank accounts to undertake direct procurements and other activities of the Ministry contrary to several provisions of the Treasury Accounting Instructions (TAIs).

The ministry of Local Government paid out Ugx647m to four different hotels for hosting ‘ghost workshops,' parliaments Public Accounts Committee has learnt.

The revelation was evident after the ministry's Permanent Secretary Patrick Mutabwire failed to adduce supportive documents for the cash releases advanced to hotels. Of this, Ugx57million purportedly paid to Hotel Africana and Hotel Paradise lacked expenditure vouchers and the relevant documentation to support the payments.

"Scrutiny of the transactions revealed that expenditure worth Shs.636, 362,171 for retreats and workshops lacked attendance lists. In absence of these lists, I was not able to confirm whether activities did take place. I could also not confirm the numbers of the billed participants," the auditor general observed in his annual report for the year ended June 2013.

But in Defence, Mutabwire told the committee that the lack of documents was due to misfiling by his staff. He said he had interdicted them, and documents have since been retrieved. He also explained that some of the files got burnt when the ground floor of their offices caught fire.

Mutabwire further told the committee that the fire incident was handed to the police for investigation having suspected it as ‘an inside job'.

However PAC chairperson Alice Alaso threw out his explanation saying there was an exit meeting but didn't bring it up to the attention of the staff from the office of the Attorney General (AG). Alaso added that the availability of photocopies of workshop attendants proves that the said workshops didn't take place.

The committee also found Mutabwire guilty of flouting the standing orders from the Secretary to the Treasury (ST) against paying allowances to accounts of staff. 

Up to Ugx2Billion was advanced to staff in the ministry of Local government through their personal bank accounts to undertake direct procurements and other activities of the Ministry contrary to several provisions of the Treasury Accounting Instructions (TAIs).

Sections 227, 228 and 229 of the Sections 227, 228 and 229 of the Treasury Accounting Instructions (TAIs), state that all payments should be made by the Accounting Officer directly to the beneficiaries.  Where this is not convenient, an imprest holder should be appointed by the Accounting Officer with the approval of the Accountant General.

According to the Auditor general, such a practice of depositing huge funds on personal accounts exposes,Government funds to risk of loss, since the Ministry does not have any control over funds deposited on personal accounts.
 
The accounting officer conceded to failing to recover the advances saying the ministry had accounting system problems which he has since tried to rectify before the committee tasked him to table bank records for all individuals who got money onto their personal accounts.

"Honorable Chairperson I concede not having documents to show recovery of the money. We had issues in the accounting system and we have since got a competent accountant," the accounting officer said.

The Committee however asked Mutabwire to recover the public funds sent to individuals within a week.

"We will receive proof from the minister on the floor of parliament whether you recovered the money, we also want a list of all those who forged accountability. This is theft, we need it published as a list of thieves, failure to do so, we will recover it from your account," Alaso ruled.

The committee also found that Ugx33m was spent on air tickets for staff to travel abroad and yet accountability is not given.

The committee ordered the accounting officer to bring the boarding passes which indicated that the local government staff actually undertook the trips designated to them.