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No whistleblower?

By Haggai Matsiko

Works PS Muganzi quizzed over Shs 15bn `ghost’ project

The police has interrogated officials of the Ministry of Works, including the Permanent secretary, Charles Muganzi, in connection with an alleged `ghost’ project in which the government is feared to have lost over Shs 15 billion.

The racket was exposed by officials of the State House Road Monitoring Unit (RMU). Muganzi was interrogated in the comfort of his office by SIU officers, who also intend to summon him together with all the others suspected to have colluded, directly or indirectly in the scam that government lost billions of money.


Apart from Muganzi, Dr John Mbadhwe , the Infrastructure Engineering Advisor on a project called the Community Agriculture Infrastructure Improvement Programme (CAIIP), and Stephen Ouma, a former Chief Administrative Officer (CAO) of Mbale district were even detained and Mbadhwe still reports to Kireka on a weekly basis.The police SIU head, Beata Chelimo, is investigating the case following a direct order from her boss, the Inspector General of Police, Kale Kayihura.

Details indicate that Kayihura was tipped off, ironically, by Muganzi.

Instead of treating Muganzi as whistleblower, the police is treating him too as a suspect in the scam. Sources knowledgeable about the case suspect Muganzi wrote to the Auditor General inviting his office to audit the project after he sensed trouble. He also quickly notified Police boss Kayihura so that he is seen as a whistleblower.

“We might not have anything concrete as of now,” Beata told The Independent, “but when we are done, (we will ask); who is the accounting officer, who implements government policies, who writes policy statements, who is responsible for the ministry’s budget? You might not have actively participated in the misappropriation but if you failed to do your job, then you are liable for negligence.”

Sources close to the investigations say evidence indicating how much money the Works Ministry received and correspondence with the ministry of Finance are being compiled to build a case.

The source said the information so far shows that whenever money was dispatched to the Works ministry, not even half of it would go to implementation of CAIIP projects.  Officials say that some of the projects the ministry of works cites to account for the money are the same projects that were covered by the lead project implementer, the Local Government ministry.

CAIIP is a donor-funded project designed to improve agriculture by building good roads and markets and providing electricity in 91 districts. Its activities involve the ministries of Local Government and that of Works and Transport.

State House moves in

The Independent has learnt that CAIIP was supposed to be implemented by the ministry of Local Government but officials in Muganzi’s ministry hijacked it and started getting billions of shillings from the government.

CAIIP metamorphosed from another programme, the Area Based Agricultural Mordernisation Programme (AMMP) which came into existence following a November 2001 resolution by parliament allowing government to borrow funds from the African Development Bank (ADB) and International Finance for Agriculture Development (IFAD)

Although, the government had charged the implementation of this programme with the ministry of Local Government, the ministry in March 2002 co-opted Mbadhwe from the Works ministry as support staff for the project. Mbadhwe maintained his position when AAMP was phased out and CAIIP rolled.

Investigators say ministry of works officials created a fictitious CAIIP, complete with `ghost’ staff and projects, to which the government has been releasing up to Shs 1.9billion per year.

Controversy over the alleged scam came to a head during a heated meeting at the Ministry of Local Government boardroom on Jan. 25. The Independent has seen minutes of the meeting.

State House officials Elias Mugisha, Sheba K.K and Abaho Benon of the State House’s RMU wanted to verify the fate of Shs.15 billion that the Ministry of Works and Transport had received from government to implement CAIIP.

Patrick Mutabwire, the deputy Permanent Secretary (PS) Local Government, chaired the meeting attended by Mbadhwe , Sam Sakwa, a Financial Management Specialist (FMS) representing the CAIIP Project Coordinator, and Denis Magezi, the CAIIP Infrastructure Engineer (IE) Central Region. PS Muganzi was represented by Obiero Mugisa, an engineer and commissioner in charge of roads. Amacha Santos, the Infrastructure Engineer of CAIIP, Eastern region, attended.

The meeting followed a December 3, 2012 letter from Abaho to Muganzi requesting documents related to the projects the Works ministry had spent the Shs 15 billion on. Abaho told Muganzi that the projects needed to be audited.

“…we have discovered inconsistencies in the running of the project, given the fact that both ministries (MoWT and MoLG) receive Government of Uganda funding for the same project,” reads the Jan.23 letter from Abaho, “this has led us to think that there is duplication of work thus double payments for the same activities of the project from both ministries…we have decided to hold a joint meeting between the officials working on this project…”

A week later, Obiero Mugisa wrote back on behalf of Muganzi saying that CAIIP was being implemented by the ministry of Local Government and they were the ones with the documents about CAIIP.

“…all the expenditures on civil works on roads and markets are processed and settled by the ministry of local government,” Mugisa wrote. He explained that the Works ministry only takes care of salaries and wages, monitoring and supervision, training of petty contractors and field operations. He also forwarded Mbadhwe’s contacts for further information.

After combing the evidence, Abaho and his crew convened the meeting in the ministry of Local Government boardroom.

Dubious accounting?

The biggest irregularities were three. First, while ministry of Works was only supposed to stop at seconding Mbadhwe to the ministry of Local Government, they had rolled out their own CAIIP with an army of staff.

Secondly, the irregular CAIIP funding to the ministry of Works was more than ten times bigger than the official money given to the Local Government ministry, the lead implementer of the project.

Thirdly, although the Works ministry was getting Shs 1.9 billion per year for CAIIP, it could not show any activities on which the money was spent.

Under CAIIP, the ministry of Local government notes that it has improved thousands of kilometers of district feeder roads, constructed over 77 rural markets, and supplied and installed 33 rice hullers, 39 maize mills, 37milk coolers, and 14 coffee hullers.  The ministry of Works does not have any projects to show value-for-money.

Based on this, the State House officials had three questions: First, why Muganzi’s ministry had not revealed to its CAIIP partners that it was getting more money from the government. Two; how the contract staffs that were originally not part of CAIIP had been procured.

Three, why was the funding to ministry of Works more than ten times higher than that of the Local Government ministry.

Between 2009 and 2012, for example, donors contributed Shs 48 billion to CAIIP and the government gave the Local government ministry a paltry Shs 450 million. Over the same period, based on minimum expert estimates, the Works Ministry received Shs 3.2 billion. And in total, out of the 15 billion that the Works ministry had received, they could only account for Shs 4 billion.

The Works funding was not subjected to budget cuts like the others.  Even when the Local government that shouldered the burden of implementing CAIIP was forced by donors to cut down on staff, the Works ministry went on staff recruiting binge.

The State House officials were shocked that the signatories to the accounts for the government CAIIP funds to ministry of Works were Mbadhwe, and Stephen Ouma, the Chief Administrative Officer (CAO) Mbale. Even when Ouma was transferred from Mbale to Rukungiri, he continued to be a signatory.  Matabwire noted that it was irregular for a permanent secretary, who is the accounting officer ministry of works, to delegate his responsibility to manage treasury funds appropriated under his budget to another accounting officer.

The Independent made several attempts to speak to Muganzi but when he was not holed up in meetings, his known mobile phone numbers were off.

It appears, however, that Muganzi steered clear of this project.  All correspondence regarding the project that The Independent has seen is signed by other officials like Mugisa.

Some suspect that this might have been deliberate. “He would always ask other people to sign on his behalf,” a source involved in the investigations told The Independent.

Mugisa, who represented Muganzi at the meeting with State house investigators said the Shs 1.9billion per year was meant to cover wages for staff, facilitation of contract staff, utility bills and transportation services for their regional offices in Mbale and Mbarara.

Trouble for Mugisa and his bosses; however, was that the Local Government ministry recognizes Mbadhwe as the only legally acceptable staff for CAIIP.

Matabwire asked Mugisa to explain where the ministry of Works got the mandate to employ other staff for a project that was not under their docket.

Matabwire told the meeting that the ministry of Local Government required only the services of Mbadhwe, who had been seconded for the project and was also supporting other projects like the Markets and Agricultural Trade Improvement Project (MATIP).

Matabwire also said that his ministry was funding fully the infrastructure engineers in the regions where CAIIP was being implemented.

“If the Works engineers are upervising in parallel to the assigned engineers,” Matabirwe said, “then it would amount to duplication of roles.”

The State House investigators were surprised when Matabwire told the meeting that he had only learnt of the double government payment for same work under CAIIP just a week before the meeting.

Hidden accounts

He said the ministry of Works CAIIP was illicit since there was neither a signed agreement between the two ministries nor coordination between the accounting officers of the two ministries.

Mutabwire noted that the ministry of Local Government had not been capturing government’s contributions in books of accounts and reports.

If it was being done, Mutabirwe said, it “would have lifted the profile of the government’s contribution in these donor funded projects.”   Mugisa told the meeting that the ministry of works kept its operations in the dark since 2007 because all was running well and the need for regular meetings between the two ministries was overlooked.

He said the ministry of works had beefed up the number of engineers because there are several civil works contracts running under CAIIP. He added that to improve the capacity of local contractors, they had also moved to train the petty contractors.

Mbadhwe reportedly supported Mugisa. He told the meeting that ministry of works engineers supported the CAIIP infrastructure engineers in monitoring civil works and that contract staffs also offered support in several activities including collection of copies of tender bid documents from the CAIIP districts.

Sakwa, who had represented the Project Coordinator also jumped in saying that the ministry of works meets the utility bills because it owns the premises in Mbale and as such the meters were in its name. The premises, he said, had earlier on been used by the Uganda Transport Rehabilitation Project (UTRP) under Works.

However, Magezi, the Infrastructure Engineer Central region, told the meeting that he was not supported by any engineers from Works in carrying out his supervision works and that he only worked with Mbadhwe and the CAIIP staff that handle documents at the headquarters.

Santos, the IE Eastern also told the meeting that he had two engineering assistants at the Mbale Regional Office but by the time they joined CAIIP in 2010, the staffs were already in place.

“Their engagement did not arise out of excessive workload on IEs,” he reportedly said.

He told the meeting that he had worked with the two assistants in the field to carry out joint measurements of works and that their job had been to compile reports for Mbadwe since the IEs submit their reports to the CAIIP Coordinator.

When the State House officials pressed the Works officials for the deliverables of the funding from government, Mugisa who was representing the PS Works, said Mbadwe takes charge and reports to Muganzi through, engineer Stephen Kitonsa, the Commissioner District, Urban and Community Access Roads. He said quarterly reports were one of the deliverables.

The SIU boss, Beata Chelimo told The Independent that interrogation of suspects is continuing.

She confirmed that she had Mbadhwe and Ouma arrested to prevent them from getting in the way of the investigations. She said Mbadhwe had been reporting to Kireka on a weekly basis as is required of him. Mbadhwe refused to talk to The Independent.

Meanwhile, the officials resolved that CAIIP funds are to be channeled to the ministry of Local Government only.

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