URC paid staff Shs1b in excess cash – report

Between July 2022 and June 2023, the Uganda Railway Corporation (URC) paid an excess of Shs1.1b to its staff, the December 2023 report by Auditor General (AG) John Muwanga has revealed.

During the period under review, the corporation employed 342 staff, of which 311 employees were verified, 23 staff partially verified, seven not verified at all while one staff did not show up during the verification exercise.

“A comparison of the base pay as per URC payroll registers with the base pay as per salary structure revealed that 43 staff were paid using wrong scales/notches leading to an overpayment of Shs1.1b underpayment of Shs127.4m,” reads part of the report.

According to Paychex, a base pay, commonly referred to as base salary or basic salary, is a fixed amount of money that an employer agrees to pay an employee in exchange for time and services agreed upon before the employee begins working.

By using wrong scales, URC, according to AG Muwanga found itself paying some employees higher than their base pay and others lower.

The corporation, he said spent Shs31.2b on administrative expenses including contract staff salaries, legal expenses, consultancy services and consultancy and engineering design studies indicating a 67.7 percent increment from Shs19.2b that was spent in FY2021/22.

Officials from the URC when contacted yesterday said they are still studying the findings of the AG’s report, and promised to issue a comprehensive statement in response to all the issues raised by Mr Muwanga in his report.

Mr John Linonn Sengendo the URC spokesperson said, “We are still reviewing the AG’s report and will be issuing a detailed response in a few days from now,”

The corporation’s acting managing director who is its accounting officer, Mr David Musoke Bulega when contacted declined to comment, saying that he was in a meeting and asked Daily Monitor to contact him today.

“I cannot speak to you at this time, I am very busy. If you want me to speak, call me tomorrow between 7am and 8am,” he said briefly on the telephone and hang up.

“I established that URC has not paid staff gratuity for the four financial years totalling Shs4b,” Mr Muwanga noted.

In the current FY2023/24, the URC accounting officer, according to Mr Muwanga over-estimated the salaries of 348 staff by Shs1.5b, from the earlier recomputed 16.5b to Shs18.1b.

Losses

URC, according to the report, has continued registering losses, from Shs32.2b last year to Shs35.1b.

The corporation for example had budgeted to raise an Internally Generated Revenue (IGR) of Shs51.23b but only to realise Shs19.3b, inclusive of the revenue earned from operations but not yet collected.

Mr Muwanga further discovered that the URC registered potential loss of unspecified funds to Mango Tree (U), a firm that is operating the Marine Vessel (MV) Pamba. This he said is because the Mango Tree (U) has been operating the vessel, without an operating lease arrangement with URC.

In his 2022 similar report, Mr Muwanga discovered that an agreement between the Government of Uganda and Mango Tree (U) Ltd to rehabilitate and upgrade the Marine Vessel (MV) Pamba without recourse to public funds, was done without following a competitive procurement process.

URC, in 2022 still had no arrangement of monitoring the revenue collected by the operator of the vessel and also the revenue sharing terms which would allow both parties to mutually benefit as required in the agreement.

Government through the Transport state minister on May 18, 2020 signed an agreement with Mango Tree (U) Ltd a Chinese firm, to rehabilitate and upgrade the Marine Vessel (MV) Pamba without recourse to public funds as a PPP.

Mr Muwanga in his report stated that there was no procurement process followed in identifying the company.

“Although the Marine Vessel (MV) Pamba operated during the year, there were no arrangements by URC in respect to monitoring of revenue collected by the operator of the vessel and also the revenue sharing terms which would allow both parties to mutually benefit as required in the agreement,” read part of the AG’s report of December 2022.

He noted that the URC is grappling with staffing gaps, because only 348 positions, out of the required 729 approved positions, had been filled.

“I noted that a total of 404 positions are unfilled. I further noted that 18 employees were recruited for positions not approved in the URC’s structure,” he said.

Mr Sengendo when asked on the staffing gap said, “That has been a public knowledge because URC is about 49 percent staff covered.”

“The capacity is too low given the magnitude of the work we do, we are however trying to close this gap by recruiting more. Government realised the importance of railway and we are optimistic that these gaps will be closed soon,” he said.

Other findings

URC, Mr Muwanga said under-remitted the Pay As You Earn (PAYE) tax to URA up to a tune of Shs1.04b. “URC did not invoice Ministry of Works and Transport (MoWT) an amount of Shs1.423b for the land and offices that the ministry occupies at the URC Station building…….Shs243b is due from Ministry of Finance for compensation of Nsambya Land which was transferred to Uganda Land Commission in 2010.”