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Saatchi cleared on CHOGM media deal

By Vision Reporter

Added 11th March 2010 03:00 AM

THERE was value for money in the 2007 CHOGM media and publicity activities carried out by QG Saatchi and Saatchi, a report by the Uganda Broadcasting Corporation (UBC) has concluded.

THERE was value for money in the 2007 CHOGM media and publicity activities carried out by QG Saatchi and Saatchi, a report by the Uganda Broadcasting Corporation (UBC) has concluded.

By Milton Olupot

THERE was value for money in the 2007 CHOGM media and publicity activities carried out by QG Saatchi and Saatchi, a report by the Uganda Broadcasting Corporation (UBC) has concluded.

UBC agreed with the Steadman Group, which was monitoring the firm’s activities, that total media exposure was worth almost three times the value of the contract.

“The resultant media exposure received was a good indicator of the overall effectiveness of the CHOGM campaign”, said the UBC report, signed by Barbara Ntambi Musoke.

“The CHOGM campaign received total media exposure of sh6.2b in response to a total spend of sh2.3b,” the report added.

The study was requested by the Public Accounts Committee (PAC) of Parliament in December last year. Committee chairperson Nandala Mafabi yesterday acknowledged that he commissioned the report.

He explained that the committee asked UBC to give an independent assessment because it is a Government body familiar with the operations of the media.
UBC managing director Edward Mukasa confirmed that the report had been sent to Parliament. “They had requested us to give an overview and we asked our internal auditor to do the job,” he said.

The report noted that the variations were justified and were a result of the fact that the contract did not start on time.

“All the variations were within the original bid except for an extra sh237m that was added as a provision for print media.”

QG Saatchi and Saatchi, an advertising agency, has been under fire from the PAC over the sh2.4m contract it won to carry out publicity campaigns for CHOGM.

The contract was carried out together with TERP, headed by President Yoweri Museveni’s son-in-law Odrek Rwabogo.
The Auditor General in his 2008 CHOGM report had questioned the mode of payment for the works.

“All the payments were improperly made in form of advances, contrary to existing regulations, ” his report said.
He also said the money paid had no withholding tax deducted “in violation of the tax law”.

According to documents submitted to PAC by the company’s director, Patrick Quarcoo, including a copy of the contract, the firm was to be paid an advance of 40% within 30 days of signing of the contract - by July 2007.

However, one week before CHOGM, the company had only received 38% of the contract sum, in small installments.
QG Saatchi and Saatchi had by then advanced almost sh200m of their own money to pay the suppliers of the billboards, the documents indicate.

When the firm was asked to carry out additional activities, such as full branding of the airport and more billboards countrywide, it was given an emergency sum of sh500m.

It only received the last payment in April 2008 and never got the full amount of the contract, documents given to PAC show.

On withholding tax, Quarcoo submitted to Parliament a letter from URA confirming that the company was tax-exempted.

QG Saatchi and Saatchi was also queried over another contract, where it was to get sponsoring from companies for CHOGM.

The Auditor General questioned why it was only able to collect sh360m out of the sh1.2b expected, and how that money was spent.

According to the Auditor General, out of that amount, sh148m was given to the Commonwealth Business Forum, sh159m was used by the firm at source, sh18m was retained as collection fee and the remaining sh34m was to be paid to the ministry.

“The utilisation of the funds collected lacked the approval of the National Task Force and remain unaccounted for,” said the Auditor General.

According to the documents before Parliament, Saatchi and Saatchi accounted for all the funds collected.
Five companies - Citibank, Uganda Telecom, Bidco, Hima Cement and the Uganda Communication Commission – donated sh354m.

Quarcoo explained that they were only able to collect one third of the expected amount because the Commonwealth Business Forum had been given the same mandate to raise funds from companies.

“We were unaware they had the same mandate to raise money and had been doing so for close to a year before we started,” he stated in the documents.

“Some of the key sponsors indicated they had already made their payments to the Commonwealth Business Forum.”

On the use of the funds, Quarcoo said all the companies had given specific conditionalities which they followed and he provided them with accountability.

He also said they briefed the foreign ministry officials and the National Task Force of their activities, minutes of which were attached to the file in Parliament.

“We presented a final sponsorship accountability report to the Ministry of Foreign Affairs on April 11, 2008,” he stated.

“The balance of sh34m was accepted and the money was transferred to the Government of Uganda.”

A copy of the bank transfer, dated June 10, 2008, was added to the file.

Saatchi cleared on CHOGM media deal

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