KCC fails to account for sh20b: Who takes the blame?
Jul 09, 2008
One would think City Hall has a hole through which funds drop and disappear. Some of the funds that the city council got from the central government or local revenue cannot be accounted for. The latest audit by the Auditor General reveals that the council has not accounted for over sh20b since 2000.
By Joshua Kato
One would think City Hall has a hole through which funds drop and disappear. Some of the funds that the city council got from the central government or local revenue cannot be accounted for. The latest audit by the Auditor General reveals that the council has not accounted for over sh20b since 2000.
According to the report, the funds were lost through local revenue that was not accounted for, failure to honour contracts, shoddy land sale deals, confusion in revenue collection and embezzlement.
“Both current and past leaders of the city are culpable,†says Geoffrey Ekanya, the chairperson of the parliament local government accounts committee.
Ssebaana Kizito was mayor from 1999 to 2006 then Nasser Sebaggala took over. The town clerk, Ruth Kijjambu, has held the post for about two years. Previously, James Sseggane was the town clerk, but he was interdicted after over sh1.8b went missing from city coffers. Sseggane was remanded in Luzira Prison.
Sh12b has been lost in tenders awarded to companies to collect market dues and management of markets in the city. The management of markets has also been a major source of controversy. Before the controversies, Kampala City Council (KCC) earned around sh75m monthly from St.
Balikuddembe Market (Owino), sh47m from Nakasero Market and sh15m from Shauri yako Market. However, fighting over the control of markets meant that KCC did not collect taxes for months.
For example, in 2006, for months, St. Balikuddembe did not remit any revenue to the council, as KCC fought over the tender with Victoria Investments.
This was also the same case with Nakasero Market, as the saga between KCC, Sheila Investments and the vendors raged. For two years, no funds have been generated from Shauri Yako, since it has been under-redeveloped.
Collection of funds from Nakawa and Natete markets has also been on-and-off because of wrangles among the vendors. “The report depended on our projections, without looking at the actual collections and political statements that affected the collection of revenue,†Sebaggala says.
Statements against the payment of some market taxes made from national political leaders affected the collection of revenue. “At one time, vendors were told not to pay their daily levy,†Sebaggala adds. “All these accrued to loss in revenue.â€
According to the report, sh303m was lost due to reduction of property rates and ground rent, while another sh417m was lost due to uncollected property taxes. But local leaders claim the collection of property taxes was affected by unplanned changes in the Property Tax Act.
Among the misused or under-used funds from the sale of land in the city include sh1.3b generated from the leasing of land at Centenary Park, sh763 from the sale of land on Sixth Street in Industrial area and sh122m from the sale of KCC houses.
It is also not surprising that funds from the Centenary Park have not been accounted for. The park was at the centre of a vicious row between Nalongo Investments owned by Sarah Kizito and the Ministry of Local Government. Nalongo Investments accused KCC of failing to honour the agreement they reached before redeveloping the park.
Subsequently, KCC gave another part of the park to an investor who set up a hotel there. According to the report, sh500m spent on Kisaasi Primary School is classified as doubtful expenditure.
When he was mayor, Ssebaana said the funds were used to buy off the owners of the land on which the school is located. Apparently, the family of Mukwaba was reclaiming the 10 acres on which the school is located.
In the early 1940s, Mukwaba is said to have donated a piece of land to the Madhvanis, who constructed a school on it. However, there is no documentation to that effect. Three years ago, the family reclaimed their land. “We wanted to pay off the family so that we could not lose the school,†Ssebaana says.
The report, however, claims the amount was inflated. Uganda Taxi Operators and Drivers Association (UTODA)’s failure to remit its dues as agreed with KCC is also queried in the report.
By the time of compiling the report, UTODA was in sh5.2b arrears. This is not the first time the tender is queried. Last year, Parliament ordered KCC to stop the tender, but, it did not.
The arrears have accumulated and there is no indication that UTODA will pay. This is the second report to implicate KCC in a space of less than one year. In 2007, a report into the operations of Kampala Central Division pinned several leaders. But the accused are yet to be punished.
Thus Ekanya’s statement that the culprits will be prosecuted is hard to believe. Kijjambu will be summoned to explain the matter before the parliament local government committee soon.
One would think City Hall has a hole through which funds drop and disappear. Some of the funds that the city council got from the central government or local revenue cannot be accounted for. The latest audit by the Auditor General reveals that the council has not accounted for over sh20b since 2000.
According to the report, the funds were lost through local revenue that was not accounted for, failure to honour contracts, shoddy land sale deals, confusion in revenue collection and embezzlement.
“Both current and past leaders of the city are culpable,†says Geoffrey Ekanya, the chairperson of the parliament local government accounts committee.
Ssebaana Kizito was mayor from 1999 to 2006 then Nasser Sebaggala took over. The town clerk, Ruth Kijjambu, has held the post for about two years. Previously, James Sseggane was the town clerk, but he was interdicted after over sh1.8b went missing from city coffers. Sseggane was remanded in Luzira Prison.
Sh12b has been lost in tenders awarded to companies to collect market dues and management of markets in the city. The management of markets has also been a major source of controversy. Before the controversies, Kampala City Council (KCC) earned around sh75m monthly from St.
Balikuddembe Market (Owino), sh47m from Nakasero Market and sh15m from Shauri yako Market. However, fighting over the control of markets meant that KCC did not collect taxes for months.
For example, in 2006, for months, St. Balikuddembe did not remit any revenue to the council, as KCC fought over the tender with Victoria Investments.
This was also the same case with Nakasero Market, as the saga between KCC, Sheila Investments and the vendors raged. For two years, no funds have been generated from Shauri Yako, since it has been under-redeveloped.
Collection of funds from Nakawa and Natete markets has also been on-and-off because of wrangles among the vendors. “The report depended on our projections, without looking at the actual collections and political statements that affected the collection of revenue,†Sebaggala says.
Statements against the payment of some market taxes made from national political leaders affected the collection of revenue. “At one time, vendors were told not to pay their daily levy,†Sebaggala adds. “All these accrued to loss in revenue.â€
According to the report, sh303m was lost due to reduction of property rates and ground rent, while another sh417m was lost due to uncollected property taxes. But local leaders claim the collection of property taxes was affected by unplanned changes in the Property Tax Act.
Among the misused or under-used funds from the sale of land in the city include sh1.3b generated from the leasing of land at Centenary Park, sh763 from the sale of land on Sixth Street in Industrial area and sh122m from the sale of KCC houses.
It is also not surprising that funds from the Centenary Park have not been accounted for. The park was at the centre of a vicious row between Nalongo Investments owned by Sarah Kizito and the Ministry of Local Government. Nalongo Investments accused KCC of failing to honour the agreement they reached before redeveloping the park.
Subsequently, KCC gave another part of the park to an investor who set up a hotel there. According to the report, sh500m spent on Kisaasi Primary School is classified as doubtful expenditure.
When he was mayor, Ssebaana said the funds were used to buy off the owners of the land on which the school is located. Apparently, the family of Mukwaba was reclaiming the 10 acres on which the school is located.
In the early 1940s, Mukwaba is said to have donated a piece of land to the Madhvanis, who constructed a school on it. However, there is no documentation to that effect. Three years ago, the family reclaimed their land. “We wanted to pay off the family so that we could not lose the school,†Ssebaana says.
The report, however, claims the amount was inflated. Uganda Taxi Operators and Drivers Association (UTODA)’s failure to remit its dues as agreed with KCC is also queried in the report.
By the time of compiling the report, UTODA was in sh5.2b arrears. This is not the first time the tender is queried. Last year, Parliament ordered KCC to stop the tender, but, it did not.
The arrears have accumulated and there is no indication that UTODA will pay. This is the second report to implicate KCC in a space of less than one year. In 2007, a report into the operations of Kampala Central Division pinned several leaders. But the accused are yet to be punished.
Thus Ekanya’s statement that the culprits will be prosecuted is hard to believe. Kijjambu will be summoned to explain the matter before the parliament local government committee soon.