Kampala — MAKERERE University is one of the education institutions that receive large sums of money from the Government. But where does the money go? An audit report for the financial year 2006/7, a copy of which is available, has revealed grave financial scandals, which the Auditor General, John Muwanga, says should be investigated and addressed immediately.
A report released to Parliament last week revealed that during the year in review, the university spent an extra sh11b on employee costs, contrary to what was budgeted for. The institution was allocated sh60b, but incurred expenses amounting to sh71b. "No evidence of reallocation was presented to the auditors for verification." Muwanga demands that the university administration explains where the extra sh11b came from.
Makerere University has suffered a number of strikes resulting from lack of funds to run the institution. The university administration has always cried foul over the Government's failure to fund its operations, and has on occasion attempted to raise private students' tuition fees to fill the gap.
According to the Financial and Accountabilities Act, any reallocation should be cleared by the Accountant General. "The practice of spending beyond the approved limits indicates weaknesses in controls over budgetary expenditures. The accounting officer should have followed the right procedures," Muwanga noted.
Examination of the university accounts revealed that various balances, including the sundry debtors amounting to sh72m; sundry creditors of up to sh4b; sh3.6 deposits, cash and cash equivalent sh15b and withholding tax payable sh20m could not be verified due to the absence of supporting documents. Muwanga also demanded that the university management explains why sh3b was being held on its below-the-line account (deposits) without being paid to its rightful recipients.
However, the University Secretary, Sam Akorimo, declined to comment on the findings, saying he had not yet received a copy of the report. "I can't comment on something I have not seen. We discussed so many things with the auditors, so I don't know which ones you want me to comment on. Wait until I get the report," he said.
The report revealed that the university operates 132 bank accounts. Muwanga noted that although the Universities and Other Tertiary Institutions Act 2001 requires the university to seek authority from the Council to operate such bank accounts, "I was not provided with it (authority) for audit. In the absence of such authority, the opening and operations of the accounts is rendered irregular."
It was also noted that various university clients can transact business with four bank accounts of the university. Muwanga recommended that the management should minimise the number of operational accounts to ease supervision and strengthen financial management controls.
The report, yet to be scrutinised by Parliament's public accounts committee, also discovered that sh4.5b was paid to academic and non-academic staff in form of allowances. Scrutiny of the documents, however, revealed that whereas sh2.3b was approved by the University Council, sh2.2b was unlawfully paid. Most of this was paid as examination setting allowance, registration, teaching and departmental retention allowances.
It was also revealed that the university does not have a Master Procurement Plan as required by the Public Procurement and Disposal of Assets (PPDA) Act. The report showed that contrary to PPDA regulations, the Faculty of Social Sciences spent sh75m on assorted goods and services during the year but had no local purchase orders; delivery notes and goods received notes.
"Individuals are advanced funds to purchase office items instead of using the pre-qualified firms through the procurement unit," the report shows. A total of sh237m was also advanced to staff to carry out various activities at various faculties but was not accounted for at the close of the financial year.
Muwanga questioned the process through which the Faculty of Law received sh8m to purchase paint and labour without following the PPDA regulations. According to the regulations, any purchase above sh2m should be done through competitive bidding. It was also discovered that the faculty paid sh19m to a stationery supplier without the use of a local purchase order.
The report stated that during that year, the university paid over sh6m to 16 members of support and administrative staff in the Faculty of Law, in consideration for leave, yet the Government abolished the practice and the university wages and salary department had not consented to the payments.
On the collapse of a newly-constructed campus perimeter wall, the report revealed that the contractor was procured without proper procedures and the involvement of the contracts committee. It was also discovered that sh160m was "actually spent on the fence contrary to the authorised amount of sh126m. The extra amount was diverted from the budget item meant for maintenance of university houses and roads." Although the university hired two firms to ferry sand, stones dust and aggregate stones, two university lorries, UG0477E and UG0315E were later used to ferry the sand.
A review of the technical report prepared by the university's department of civil engineering attributed the collapse of the wall to low quality of concrete and other engineering factors.
Recent strikes at Makerere University
During the past two fiscal years, the university had three strikes over these issues:
-The university lecturers on February 6, 2008 went on strike, citing lack of teaching materials. They said their salaries and pensions had not been paid in a while. They also protested the diversion of pension funds to pay salaries.
-On November 6, 2007, students of Mitchell Hall staged a mini demonstration, protesting the scarcity of water at their residence.
-The university closed for a month in December 2006, with lecturers complaining of non-payment of top-up allowances.