CAA probed over sh5.4b loss

By Umaru Kashaka             

Works and transport minister, Abraham Byandala, has launched investigations into sh5.4b loss to a group of city lawyers contracted by the Civil Aviation Authority (CAA) for collection of a debt which government had already committed to pay.

Appearing before the committee on Commissions, Statutory Authorities and State Enterprises (COSASE) to answer queries regarding CAA, the minister said following the Auditor General’s findings, he wrote to CAA board and he was yet to receive response.

“The conclusions of the Auditor General were worrying and I wrote to the chairman of board of directors of CAA to furnish me with all the details pertaining to the matter so that I can take a stand,” the minister told the committee chaired by the Kumi MP, Patrick Amuriat.

Pressed to shed more light on the issue, Byandala said: “I wrote to them and I’m still waiting for their response.”

Quoting from the Auditor General’s 2010/2011 report, the committee chairperson told the minister and CAA officials that the expenditure was unnecessary and could have been avoided since the government had committed itself to pay the money.

“We cannot allow a colossal sum of money from the government coffers to be spent on the work that was not even done by Kampala Associated Advocates (KAA).  The committee will summon KAA to explain what really happened,” Amuriat ruled.

The payment to KAA, according to MPs and the Auditor General's report, contravened the Public Procurement and Disposal Act.

CAA’s Managing Director, Rama Makuza, maintained that contracting KAA to collect money owed to it by the government was informed by crippling financial constraints.

“The main factor for enlisting KAA’s services was the nature of the emergency at the time. We had pressure from the bank, Uganda Revenue Authority had raided our accounts over outstanding tax assessment and the Authority was on the brink of grounding to a halt,” CAA’s Managing Director, Rama Makuza, said.

He said failure to review outstanding debtors and making provisions for bad and doubtful debts on a monthly basis as required by the finance policies and procedures manual undermined debt collection efforts.

In his defense, Makuza said sh33.7b was an accumulation of the provision for bad and doubtful debts over all the years CAA had been in existence.

“Breaking it down requires reviewing a large volume of records, however the exercise is already in progress and will be completed by the end of June this year,” he explained.