A new report of the auditor general has unearthed an unnecessary expenditure of funds totalling Shs 23.6 billion in the Works sector.
Out of the Shs 23.6 billion, auditor general John Muwanga notes nugatory expenditure in interest on delayed payments to contractors of Shs 7.3 billion by the Uganda National Roads Authority (UNRA), and another Shs 16.3 billion loss to the taxpayer caused by a 60 months delay in the design review of the Masaka-Bukakata road. The report notes that the ministry effected payments worth Shs 450 million in respect of unbudgeted for domestic arrears in the year under review contrary to the budget provisions.
The report for the financial year 2019/2020 was presented by auditor general John Muwanga to speaker of parliament Rebecca Kadaga on Thursday.
According to the report, this arose out of penalties for the court cases and interest on delayed payments of advances and interim payment certificates from various contractors. Simplifying for laypersons who are not accountants, Muwanga said that nugatory expenditures are payments that did not achieve any result. In this case, Shs 23 billion shouldn't have been spent by the concerned bodies all done their work in time.
"The issue was attributed to inadequate funding leading to the Authority's inability to settle certificates of approved works within the contractual period, which makes contractors invoke the clause in the contract and claim interest on unpaid certificates. There is need for government to prioritize timely payment of contractors to avoid the penalties imposed as a consequence of delayed payments," Muwanga says.
Muwanga notes that at the time of the audit (June 2020), out of the planned eight strategic targets/goals, no target had been fully achieved. UNRA also acquired two vehicles at a total cost of Shs 677,849,549 during the FY 2019/20 using government funds in contravention to the government ban on procurement of vehicles. Out of the 38 vehicles procured, the two motor vehicles purchased in the FY 2019/2020 with a total cost of Shs 677m were not in the annual work plan and procurement plan.
AUDIT OF PROJECTS
The auditor general also reveals delays in completion of design reviews in which the taxpayer has to pay over Shs 16.3 billion as project cost increment. Muwanga notes that design review is a key component of construction supervision for which any delay affects the implementation of the projects leading to cost escalations.
The auditor general sampled 13 of the 64 development, rehabilitation and bridge projects valued at Shs 12.5 trillion under implementation by UNRA. The 13 projects with a contract value of Shs 2.99 trillion which were selected for audit, the report notes that five (38%) were observed to have been initiated without adequate planning, which translated into major design changes during implementation, multiple extensions of time for some projects, delays in design reviews, delays in issuing revised design reports for implementation, variations in quantities during implementation, cost and time extensions.
For instance; AG notes that the relocation of facilities was underestimated for Kyenjojo-Kabwoya road project by over 127%.
Additionally, the concept design for Masindi-Park junction-Tangi road project through Murchison Falls National Park resulted in the reduction of road width in the park section which may result in a potential nugatory expenditure of $4.88m.
There was also an underestimation of quantities by Shs 16 billion (11.95% of the original contract) for the Kigumba Bulima-Kabwoya road project. In addition, there was an omission of about 0.8Km of swamp sections of 4m average depth for the same road project resulting in four times the requirement for swamp treatment.
There was also an underestimation of quantities for Masaka-Bukakata road project due to inadequacies in geotechnical investigations as well as absence of detailed design at contract commencement for Hima-Katunguru rehabilitation road project.
According to Muwanga, the responsible accounting officer explained that consultations are being made with utility companies to estimate relocations prior to issuance of bid documents.
PROJECT DELAYS
The auditor general says that in 7 out of 13 road and bridge projects assessed, he observed that the design review for Masaka-Bukakata road project delayed by over 60 months (about 5 years) with multiple reviews leading to a net increase in the project cost of Shs 16.3 billion.
"For the Kyenjojo-Kabwoya project, the first design review of the road design report was delayed by 1 month while the final review was delayed by 9 months. For the Akisim-Moroto road section, the first review of the road design report was delayed by 3 months while the final review delayed by 9 months," reads the audit report.
Also noted is a delayed review for the Bulima-Kabwoya project. While the review was scheduled for 6 months, it was delayed by over 24 months.
For the Fort Portal-Hima road project, outstanding revised road designs were issued more than one year from date of submission of first drawings while that of Hima-Katunguru project experienced a delay in issuance of final design drawings by over 12 months, according to the report.
"For the design and build of lot 3 bridges projects reviewed; the draft and final design that was to be submitted in 12 and 20 weeks respectively, was submitted in 16 and 32 weeks respectively," the auditor general reports. "I advised the accounting officer to consider charging damages on consultants who fail to deliver design reviews on time."
The Bulima-Kabwoya road project that was initially scheduled for 30 months, after 52 months the project has achieved 97% completion. The Masaka-Bukakata road project had a 13.9% physical progress lag and a delay of over 44 days on Hima Katunguru road project led to Shs 660m delay damages.
KAMPALA FLYOVER, NORTHERN BYPASS
The auditor general noted the slow progress of works on Kampala flyover construction and road upgrading project and the Northern Bypass. These two major road projects, Kampala Flyover Project (KFOP) and the Kampala Northern Bypass Phase II (KNBP), he says have dragged on since May 4, 2019 and July 14, 2014, respectively.
By end of September 2020, the progress of physical works on the Kampala flyover project was estimated to be at 4.94 per cent and the total contract time that had elapsed was 53.2 per cent. For the Nothern bypass, the progress of physical
works was estimated to be 77.4 per cent and the construction which had been planned to take 36 months (3 years) has so far taken 78 months (6 and half years), which was a time lapse of 217% and still on-going.
The slow progress of the works according to the report were attributed to; delayed access to the site at various locations, delayed relocation of utilities obstructing the planned works, the addition and increased scope of works and quantities and limited equipment deployment in the early period of the projects.
"Delayed completion of works inconveniences surrounding business community and denies the intended beneficiaries timely use of the infrastructure and may result in escalation of project costs in terms of contractors' claims," Muwanga writes.
Meanwhile, the auditor also query the lack of a disputes board saying that two road projects including Akisim-Moroto project and Fort Portal-Hima road project under construction did not have fully constituted dispute boards as required. This was 90 days after the commencement of construction work.
Muwanga says that boards are necessary to resolve in time any disagreements between UNRA and the contractors that arise during contract implementation. According to UNRA, the delays were due to the contractors' objection and preference for particular dispute boards.
"I advised the accounting officer to complete the process for constituting dispute boards for ongoing projects and always ensure timely appointments," Muwanga reports.
Kadaga said that the audit report is to be tabled on the floor of parliament after which, the different accountability committees by parliament will interface with the queried entities.
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