UEDCL Spends Sh128m On Bill Delivery
THE Uganda Electricity Distribution Company Limited (UEDCL) has so far spent over sh128m on paying a local courier firm contracted to deliver bills.
Records indicate that Yellow Pages was awarded the contract early this year and has since March, received between sh10m and sh54m per month.
Under the deal, UEDCL pays Yellow Pages sh390 per bill delivered to electricity consumers.
The New Vision established that in March UEDCL paid Yellow Pages sh10m on a Uganda Commercial Bank cheque No.084722, dated March 12, 2003. In April, Yellow Pages received another sh10m on a Standard Chartered Bank cheque No.101587, dated April 14, 2003 for the same services.
But in May, the payment jumped to over sh50m. A Stanbic Bank cheque No.000754, dated May 15, 2003, for sh54, 252,814, was issued to Yellow Pages. No payment for June was recorded.
In July, however, the company bagged another sh54,367, 397 on a Stanbic Bank cheque No.005419 dated July 31, 2003. By press time, the claim for the month of August had not yet been lodged with UEDCL.
But the deal has since raised many queries within UEDCL management and the energy ministry.
“What is the rationale of paying between sh10m to sh50m per month to a courier firm when most of the electricity bills are still delivered door-to-door by UEDCL staff?” asked one irritated official.
Sources alleged that senior UEDCL officials used lawyers in Kampala as agents to award themselves the lucrative contract.
“This deal should be thoroughly investigated because there seems to be some foul play. UEDCL should explain how they reached such a figure per month and show proof that the payments or claims are genuine,” the sources said. For three days, Irene Muloni, the UEDCL managing director, was unavailable for comment while other company officials said it was a sensitive issue.
Meanwhile, the former majority shareholders of Yellow Pages Express Limited, in a June 4 plaint, sued a Kampala law firm, Buwule and Mayiga Advocates, for failure to pay sh35.5m over a share transfer agreement dated August 15, 2002. The case is in the Commercial Court.
Stephen Langa, one of the former owners of the Yellow Pages Express Ltd, said in an affidavit that Ms. Buwule and Mayiga Advocates guaranteed the purchase of the 75% shares at sh37.5m. Under the agreement, payment was to be finalised by April 31, 2003 but to-date, only sh2m has been paid.
The transfer certificate indicates that the principal (the buyer) was to be unnamed. Reasons for the anonymity were not disclosed.
A sh10m Tropical Africa Bank cheque dated June 30, 2003 which Ms. Buwule and Mayiga Advocates paid to Langa, reportedly bounced.
But Buwule said the balance of sh35.5m for the share purchase in the Yellow Pages Express Ltd. will be paid soon.
The New Vision saw a copy of an application by Ms. Buwule and Mayiga Advocates for permission to defend themselves.
The lawyers agreed that they guaranteed the payment of the share purchase price “but seek to reschedule the payments ostensibly because the principal has no money”.
Recently, Yellow Pages Express Ltd. won a tender, approved by SWIPCO, to distribute UEDCL electricity bills to consumers for an undisclosed period of time.
The courier firm is already doing the work. During the tendering process, Rita Najjuma Buwule represented the company.
But information from the company registry indicates that Buwule and Mayiga Advocates have not effected any registration of the transfer instruments. Sources said this made it appear as though it was Langa who won the contract.
When contacted, Mr. Buwule, who handled the transfer deal, denied that he was a front for some UEDCL managers who were indicated as unnamed principals.
He said the new directors of the Yellow Pages Express Limited were Stephen Langa, Rita Buwule, Luke Lukabya and Baker Kalyango.
He denied allegations that Yellow Pages was earning money from UEDCL for no work done because they did not distribute the electricity bills.
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Billions Lost In URA
CARRIED OUT PROBE: Auditor General John Muwanga
The Auditor General has unearthed a loss of billions of shillings in tax evasion and fraudulent dealings involving Uganda Revenue Authority (URA) staff.
In a special audit report dated November 29, 2002, the Auditor General (AG), John Muwanga, discovered massive fraud at customs entry points in Entebbe, Busia, Arua, Malaba and the URA headquarters in Nakawa, Kampala.
The AG also detected ghost policemen in the URA payroll. “A sum of sh50.4m on policemen’s weekly guard allowances was fraudulently paid to ghost Police constables (sh36.7m) or was never received by the intended policemen in question (sh13.6m),” says the 12-page report.
URA commissioner for tax education and public relations Christopher Kawesa declined to comment on the matter.
In one of the cases, URA paid US$54,000 (sh108m) to a consultant to develop an information technology strategy and another US$15,000 (sh30m) to update it but the project never took off.
The AG queried sh42.8m URA paid to renovate the former Coffee Marketing Board premises in Bugolobi, which it does not own. The building was allocated to Tristar Apparel Ltd, a company exporting garments to the United States.
He said he had neither been provided with copies of the cabinet minutes allocating the premises to URA nor letters from the finance ministry allowing URA to carry out the renovations before finalising the legal ownership. Besides, no accountability for the funds was submitted for audit.
The report said the former URA board secretary, James Byamukama, caused financial loss of sh137m to URA in 2001.
Byamukama confiscated $63,500 (sh112m) from a local company at Entebbe Customs point. The money later disappeared and the company (Fair Construction Ltd.) sued URA.
Muwanga said the board secretary acted contrary to the Customs Management Act, which requires seized items to be held in customs bonded warehouses or other secure places.
“I have advised management to strengthen the systems and to have the officers responsible for the loss held accountable and funds recovered,” Muwanga said. Byamukama’s whereabouts are unknown although he was initially reported to have fled the country.
URA also paid sh471m to two firms for the supply of 10 double cabin pick-ups without the Board’s approval and contrary to the regulations on competitive bidding.
The AG unearthed tax evasion and under-valuation of goods. Goods worth sh222m were not traced to the bonded warehouses registers. Stations involved were Bond 196 Shumuk Investments Ltd (sh80m) and Jinja customs (sh103m). Some of the goods were diverted for home use without payment of taxes.
At Port Bell station, there was under-valuation of goods to the tune of sh72m leading to undercollection of revenue amounting to sh76m.
In Malaba, sh80m was paid out as a settlement of judgement for a suit which arose as a result of URA staff fraudulently allowing a local company to use another company’s register to clear a consignment of cigarettes destined to the Democratic Republic of Congo.
The officer implicated in the case has been re-instated after his services were initially terminated. At the same station (Malaba), there is reported tax evasion of sh800m dating back to 2000.
Tax arrears amounting to sh5.5b including sh4.1b owed by government institutions remained outstanding at the close of the 2001/02 financial year. Examination of accounts also revealed that sh966m was not collected from a construction and engineering company.
At least sh235m collected from Nakawa Inland port as non-tax revenue and sh54m realised from the sale of auctioned items to recover taxes due to customs and excise departments was not remitted to the Consolidated Fund Account contrary to regulations and is feared embezzled.
Another sh497m advanced to URA’s staff has not been recovered. It was also noted that money was advanced to non-URA staff. There were no files and contracts entered between URA and the sundry debtors.
Imprest worth sh657m also remained unaccounted for at the time of audit. Included in this figure is sh35m classified under SRPS. The AG said from July 2001 to February 2002, sh1.9b was spent on the Special Revenue Protection Services (SRPS) to facilitate its operations.
Muwanga questioned the legal and operational framework of SRPS. He said the funds were not budgeted for and the sh1.9b was reportedly paid on verbal instructions from the finance ministry, leading to over-expenditure.
It says SRPS appears to have its own rates of subsistence and other allowances and the accounting system they use is poor.
URA also lost Value Added Tax of sh393m, which was not deducted from the sh2.3b paid to Spencon Services Ltd, the firm that constructed the Ministry of Health headquarters building in Kampala. The payment was not reflected in the subsequent returns to URA.
A further sh277m relating to payments made to a firm for construction of valley dams was not recovered.
In addition, recoveries of withholding tax amounting to sh64m which were retained by the ministry, could not be confirmed since the receipts had disappeared.
The AG queried an expenditure of sh858m paid for servicing URA vehicles in the last financial year alone. No registers were availed to show the location, ownership and condition of the vehicles.
There were also doubtful cash payments of sh257m purportedly for casual labourers for the period July 2001 to June 2002.
Records examined also showed that from April 1999, URA lost cases worth sh2.9b. The AG was not shown evidence that the sh3.1b due from cases won had been collected.
Quarterly internal audit reports also revealed missing receipts, outstanding VAT on donor funded projects (sh366m), other VAT arrears of sh2.1m and income tax of sh5.1m at Arua customs and internal revenue office.
Similar weaknesses were also reported in the internal revenue department, Mbale, where a company had income tax arrears of sh4.7b while other taxpayers owed sh126m.
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bwanika
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