National
AG queries sh2b 'inflated' cost for Cancer ward
Publish Date: Jan 16, 2014
AG queries sh2b 'inflated' cost for Cancer ward
Auditor General John Muwanga
  • mail
  • img
newvision

By Mary Karugaba

The Auditor General has raised a red flag over the procurement and construction of the Cancer Ward, questioning the suspected inflated costs of sh2.1b.


A report to Parliament on the audited financial statement of the Uganda Cancer Institute, the Auditor General, John Muwanga, noted that in 2011, the Institute contracted Ambitious Construction Company to construct a 5-level Cancer Ward at the initial sum of sh5.7b but a review of the contract documents indicate that the amount was revised to sh7.9b without necessary approval.

Procumbent regulations provide that a contract amendment shall not be issued to the provider prior to obtaining approval from the contracts committee or from any other concerned bodies including the Solicitor General.

The auditors further argued that the rules stipulate that no individual contract amendment shall increase the total contract price by more than 15% of the original contract price without the approval of the procurement body, the Public Procurement and Disposal of Public Assets (PPDA).

“When the contracts documents were reviewed, it was discovered that the works were varied by sh2.1b representing 38% of the original contract price without necessary approval. The variation was therefore done in total disregard of the PPDA regulations.

The auditors further noted that despite the revised budget, seven months after the due completion date, works were still uncompleted by the time of audit in January 2012.

“Despite the apparent delays, there was no evidence that management had followed this matter with the contractor, including application of liquidated damages as provide for under the contract,” he said.

 Cancer Institute Director Dr. Jackson Orem although did not explain why he did follow procurement guidelines, he explained that the variance was as a result of change of the original construction site by the ministry of health to a new one after the contract had been signed and the site handed over to the contractor.

He further said, the contractor was asked to halt the work until an agreement was reached with Mulago Hospital which decided to allocate a new piece of land for the project.

“The new site was then evacuated and additional works were deemed necessary since a soil test found the new site soils weaker. This addition however, despite the cost, increased the range of services in the building as a mortuary, nuclear medicine and X-ray facilities were designed to utilize this additional space that was not part of the original plan,” he explained.

Orem said the circumstances at the time could not enable the institute approve the variation since it had no board. “A long the way, we got a board as an autonomous institution and the process regularized,” he said.

He attributed the delay to change of site especially consultations. However, the building was completed and has been handed over, he said.

Meanwhile while appearing before the Public Accounts Committee yesterday, Dr. Orem was grilled for diverting funds meant to fund major institute activities to other areas such as salaries, laundry and food.

During the meeting, MPs discovered that the Institute diverted over sh600m without authority, suffocating major activities such as the purchase of Echo and ECG equipment used in cancer treatment and outreach centers for cancer sensitization. The equipment cost sh92m.

MPs Kassiano Wadri, Alex Byarugaba and Jack Wamanga complained that although parliament has been advocating for the Institute’s increased budget, the money has not been used for major activities such as purchase of vital machines.

“I am extremely disappointed that rather than spending the little you have on major activities, if you diverted it to other use even without permission from Finance. When I look through your books of accounts, issues of financial management seems to be too heavy for you. We don’t feel comfortable with the way you are handling money issues,” Kassiano said.

Orem said, in some cases permission was rejected but he said he had put most of the finances to proper use.

 

The statements, comments, or opinions expressed through the use of New Vision Online are those of their respective authors, who are solely responsible for them, and do not necessarily represent the views held by the staff and management of New Vision Online.

New Vision Online reserves the right to moderate, publish or delete a post without warning or consultation with the author.Find out why we moderate comments. For any questions please contact digital@newvision.co.ug

  • mail
  • img
blog comments powered by Disqus
Also In This Section
Minister warns civil servants over pension scam
Civil servants working in the ministry of Public Service have been warned against pension scam that it should not happen again....
Traditional healers want to meet Museveni
Traditional healers have petitioned Speaker of Parliament, Rebecca Kadaga seeking her help to meet President Yoweri Museveni over their support during the 1980 Bush war....
AMISOM to leave Somalia in 2016 - envoy
The African Mission to Somalia (AMISOM), a peace keeping mission operated by the African Union would be leaving Somalia in 2016, according to the latest assessment by stakeholders...
Kadaga wants centres for public to access passed laws
THE Speaker of Parliament, Rebecca Kadaga, has complained that the public does not get access to the laws passed by Parliament....
Tumwebaze to Byandala:  Don’t drag me into your woes
Claims by Works Minister Abraham Byandala “dragging me in the Mukono-Katosi road mess are baseless, unsubstantiated, cooked up and an attempt to divert public attention,” Minister for Presidency, Frank Tumwebaze, has said....
Intensify fight against corruption - Ntagali
Church of Uganda archbishop, Rt. Rev. Stanley Ntagali, has challeged government to get tough in the fight against corruption, human sacrifices and human trafficking among other vices....
Will strict traffic laws reduce road accidents?
Yes
No
Can't Say
follow us
subscribe to our news letter