21 January 2019

Uganda: Shs427b Spent On Ghost Supplies, Government Audit Finds

Kampala — Government has found that almost Shs427b - which is part of the Shs3 trillion domestic debt - is money meant to be paid to non-existent suppliers, according to an audit conducted by Ernst & Young.

The audit, which was secretly commissioned by the Ministry of Finance, indicated that supplies to government ministries, departments and agencies worth shs427b cannot be traced to any supplier yet it is part of the Shs3 trillion domestic debt.

Mr David Bahati, the Finance state minister in charge of Planning, revealed this during a supplier and contractors' meeting in Kampala at the weekend.

He was speaking at a meeting to sensitises suppliers and contractors about the e-procurement system that the Public Procurement and Disposal of Public Assets Authority (PPDA) will partly roll out this year.

"We have learnt that out of Shs3 trillion of domestic arrears, Shs427b which can do so many things, has been inflated. That money cannot be accounted for. There are no invoices and other documents to show that those items were procured," he told suppliers and contractors who attended the PPDA-organised meeting in Kampala last week.

Mr Bahati also said the audit had found that some suppliers had submitted fake supporting documents to back-up their claim for payment of no goods supplied.

Ghost supplies have for long been a challenge to government with a number of people taking advantage of existing loopholes.

However, in an interview on the sidelines of the meeting, Mr Bahiti told Daily Monitor government was trying to make corruption in Uganda a risky affair.

"Those who would be found culpable as a result of the ongoing audit will be punished severely," he said.

Mr Benson Turamye, the PPDA executive director, said most of the un-accounted for money is related to consumables that are easy to manipulated.

The solution, he said, was to create an efficient system such as e-procurement, which will be first piloted on selected service providers and contractors.

"The system will be integrated with the Ministry of Finance budgeting system. So we will be able to track all procurements up to delivery. This will eliminate collusion and corruption," Mr Turamye said.

According to a survey conducted by PPDDA, the e-procurement will be an efficient accountability system, given the increased internet penetration across the country.

Curbing corruption

The e-procurement system, seeks to curb corruption that continues to be a major problem, especially in government ministries, departments and agencies.

Recently, Mr David Bahati, said the e-government procurement system will reduce government procurement costs by 30 per cent.

"The inherent problems in paper-based procurement include inadequate information management, inefficient procedures and high costs of compliance. But we believe the online procurement system will [bring down] costs will drop by 30 per cent," he said.

Bahati also observed that the e-government procurement system will lead to marked improvement in governance due to enhanced transparency and less opportunity for fraud.

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