CHOGM: Sh160m missing in Mulago

By Vision Reporter

Added 1st February 2010 03:00 AM

THE public accounts committee of Parliament was yesterday shocked to find that sh159m meant for the renovation of Mulago Hospital ahead of the CHOGM event was stolen in the Bank of Uganda.

By Mary Karugaba & Milton Olupot

THE public accounts committee of Parliament was yesterday shocked to find that sh159m meant for the renovation of Mulago Hospital ahead of the CHOGM event was stolen in the Bank of Uganda.

The committee, chaired by Nandala Mafabi, yesterday ordered the Police attached to Parliament to investigate how the money was transferred from the hospital’s account in the Central Bank to private commercial banks.

The director of Mulago Hopistal, Dr. Edward Ddumba, told the MPs yesterday that the money was part of sh1b given to the hospital through the health ministry for renovations ahead of CHOGM.

Ddumba explained that without the hospital’s knowledge, the Central Bank, with the authorisation of the director of banking, Stephen Matanda, paid unknown individuals sh159m using forged documents.

Investigators, he said, found that the money had been transferred to two commercial banks, Barclays and dfcu, and some of it had already been withdrawn.

The officials, led by the Permanent Secretary of the health ministry, Dr. Sam Zaramba, were appearing before the committee to answer queries raised by the Auditor General on the CHOGM expenditures.

The hospital’s principal accountant, Elias Aseku, told the committee that the director did not follow standard procedures for transfer of money from the Central Bank.

Aseku said the unknown individuals claimed they had done renovation works for the hospital.

“When we checked our account, sh159m was missing. We immediately contacted the director who promised us that the transfer would be blocked. But to our surprise, the next day we discovered that sh14m of the sh159m had been withdrawn,” he said. He reported that the Bank of Uganda had so far recovered sh118m.

But the committee, chaired by Nandala Mafabi (FDC), demanded to know the whereabouts of the remaining money. “The Bank of Uganda is still making the recoveries,” Aseku said.

Mafabi directed CID to investigate the matter. “We suspect that this was done in connivance with officials from the Bank of Uganda.”

“Matanda should be held responsible for authorising the transfer without questioning the signatures and the way the forged letter was delivered to him without going through the normal procedures.”

The committee agreed that Matanda should be summoned to explain the irregularities.

The MPs also grilled the officials over the award of a sh2b contract to Rhino Investments for renovation and other works. Scrutinising the documents, the MPs discovered that the contract was irregularly awarded to the company, which is owned by retired Colonel John Mugyenyi.

The MPs discovered that the bid evaluation was done before the bids were opened. When Ddumba was asked to explain the inconsistency, he said it was “just a typographic error.”

When probed further, he sought assistance from the procurement officer who said: “This was a technical issue. I take advice from the procurement officer who I think should come and explain.”

The MPs also discovered that whereas the law demands that submission and opening of bids should be done within one day, the bids were opened five days later.

They were also shocked to find that the bid forms for Rhino Investments and Dott Services were handwritten and bore similar handwriting.

“With all this, I believe that there was no value for money. Ugandans lost sh2b. The whole process of procurement was flouted,” Mafabi said.

Frank Tumwebaze (NRM) called it “unfortunate” that in all CHOGM bidding, other companies were disqualified at preliminary stages on technical grounds, yet “one selected company was left to compete against itself”.

The committee also demanded an explanation from the hospital management, why they spend close to sh500m from the institution’s development budget for CHOGM activities.

Ddumba was directed to produce proof that they obtained clearance from the secretary of the Treasury to divert the money.

The committee had threatened to detain the hospital managers unless they produced all documents related to the procurement process through which Rhino Investments was awarded the contract.

Ddumba pleaded for more time and promised to produce the documents today.

CHOGM: Sh160m missing in Mulago

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