Suspicious contracts expose fraud by Kassanda officials

According to the report, Kassanda District officials irregularly sourced contractors for different projects.

It also revealed that the Procurement and Disposal Unit did not follow PPDA procedures and that the district submitted to the PPDA incomplete quarterly reports in which some procurements were deliberately omitted.

“The Engineering Department issued local purchase orders to prequalified providers who had no framework contracts. It was unclear how unit prices were established and there is a risk of the force account mechanism not realising value for money,” the report reads in part.

It added that unfair evaluation in five procurements worth Shs995.6 million resulted in the awarding of contracts to non-compliant bidders.

This newspaper established that the officials contravened the principles of transparency by declining to communicate arithmetic errors in three procurements valued at Shs424.4 million.

Monitor has also established that during the procurement process for the construction of the mini-solar piped water system at Kyabakadde Town Council in Makokoto Sub-county, the evaluated best bidding price was Shs239 million whereas the bidder’s price read at bid opening was Shs223.67 million.

A source in the district technical committee, who declined to be named for fear of reprisal, said while the signed contract price for the project was Shs239 million, the district deliberately paid the contractor only Shs213.87 million.

“The difference was Shs25 million that was not paid to the provider,” the source said.

In the procurement for the rehabilitation of 10 boreholes in Nalutuntu, Kiganda, Bukuya, Kifumbi and Kalwana sub-counties worth Shs66.6 million, it is alleged that there were no performance securities for the contracts.

A source, who declined to be named for fear of reprisal, told Monitor that during the procurement process for the upgrade of Kyansansuwa Health Centre III valued at Shs613.4 million, the evaluation committee deliberately erred and changed the bid price to Shs613.4 million instead of Shs640.1 million that was read while opening the bid.

“Banna Investment Ltd’s read price at bid opening was Shs640.1m but the committee rewrote the bidder’s price to Shs613.4m,” the source said.

Banna Investment Ltd was the contractor for the project.

The findings matched those of the PPDA audit findings. While analysing the bid, they established that the evaluation committee blundered in the calculation when the bid totalled Shs618.1 million, implying the bidder was underpaid Shs4.6 million.

In a separate bid document, which this newspaper has seen, during the procurement process for the drilling and installation of six deep boreholes in selected sites in the district, the price read at bid opening was Shs100.6 million although the evaluated price indicated Shs118.8 million.

It is also alleged that the district failed to appoint contract supervisors and declined to seek the Solicitor General’s approval in all contracts above Shs200 million.

“This led to unjustified contract amendment and suspicious variations leading to unjustified delayed contract completion,” the document stated.

It was also found that the construction of phase two of the Kassanda office block valued at Shs962.5 million has been abandoned with no trace of work done even when more than Shs190 million was cashed to the contractor five months before the auditors came on the ground.

The auditors also observed that documents including works management plans, supervision reports detailing the progress of the assignments, and reports on the direct and indirect costs of the works, including performance and completion certificates for several projects were missing.

“At the time of the audit, the works were incomplete, and there was no activity on the site although the entity had already paid 10 percent advance payment to the contractor Robich Engineering Services Limited and this grossly affected the ability to achieve value for money,” the auditors stated, adding, “The audit established during the inspection that a procurement (Reference Number Kas625/Supls/20-2100007) to supply 2,500 kroiler chicks and poultry feeds by Food Com. Uganda Ltd for five selected groups worth Shs10.7 million were not included in their quarterly submissions.

It was also established that the district’s procurement department diverted from the terms of the contract.

While the contract indicated that advance payment will not apply to the project, the district officials paid an advance of Shs192.5 million, an equivalent of 20 percent of the contract value on December 18, 2020.

“The above irregularities cast doubt on the integrity of the respective procurement processes, the irregularities at contracting, expose the entity to risks of litigation and non-performance thus inhibiting service delivery and achievement of value for money,” the report said.

The auditors cited discrepancies in the procurement of fuel and lubricants worth Shs26.3 million from LK Filling Station and Total Mityana Highway stating that the entity procured the items outside the procurement plan.

This newspaper also saw documents indicating that a contract for Stabex Fuel Station was signed on August 28, 2021, over the same procurement yet there was no evidence from the district to show that they were issued with a bidding document.

The auditors said the procurement implied a lack of transparency and fairness in the procurement processes at the district.

Of all the reviewed bidding documents, the auditors observed that there were inconsistencies in all the issued solicitation documents. There were no terms of reference, bills of quantity, details of technical evaluation, and general conditions of contract in all sampled procurements.

While they were unable to establish how the bidders submitted their bids, the auditors remarked that the district failed to provide for a margin of preference for all open domestic procurements.

“Whereas PPDA issued a solicitation document for works in September 2019 with a provision for environmental, social, health and safety aspects, the solicitation document used by the district did not provide for these aspects,” the report said.

The audit by the PPDA stemmed from a letter addressed to the Inspectorate of Government accusing the district engineer of taking control of the Procurement and Disposal Unit of the district.

The letter, which this newspaper has seen,  stated that the district’s senior procurement officer relocated his office to the engineer’s office to work from there under his close and tight supervision yet there is a procurement office where the two officers of the unit are supposed to work from.

Local government PPDA regulation 2006(13) (1) provides that the accounting officer (CAO), the contracts committee, the procurement and disposal unit, the user department and the evaluation committee etc., shall each act independently in respect to their functions and powers.

“As a result of the senior procurement officer working from the engineer’s office, the team ended up preparing the wrong bid documents, including receiving and opening the bids by the engineering staff, I have raised this concern several times to the CAO but nothing is being done,” the letter reads in part.

The letter further stated that the senior procurement officer deliberately hides all the information about procurement including minutes of the contracts committee, bid documents, reports, and the district was making incomplete payments to contractors even when they have performed well.

“There is systemic corruption in the procurement processes by the accounting officer, the senior procurement officer and the engineering department. There is no transparency, no accountability, no fairness, fraudulent practices, and collusion of engineering staff with the senior procurement office,” it states.

It also alleged conflict of interest in most tenders which it said were awarded to companies whose owners are related or belonged to the engineering staff and the senior procurement officer.

In three procurements worth Shs305.7 million, whereas the contract stated that the provider should submit a 10 percent performance security before the commencement of works, the auditors observed that the district did not obtain these (funds) from the providers.

This reporter also established that the PPDA commissioned a team of auditors to investigate alleged fraud in the district following a whistleblowing report which pointed to critical loopholes in the procurement, human resource, and engineering, including the accounting office (CAO) departments.

Reaction

Efforts to speak to Ms Jesca Nansinjo, the district’s senior procurement officer, Mr Fred Sebyalika, the district engineer, and Mr Donath Eswilu, the chief administration officer (CAO), over the allegations were futile.

At the weekend, Mr John Bosco Kikere Ssewankambo, the Kassanda deputy CAO, confirmed the development, saying the district was frustrated by “unfocussed” contractors who lacked manpower and resources to execute projects timely.

He cited the district administration block which the contractor abandoned due to a lack of manpower to carry out the work.

“The block is now at the roofing level. The first contractor abandoned it because he was overwhelmed with work. We later discovered that the same contractor was running several projects across the country and could not concentrate on doing ours,” Mr Ssewankambo said.

Although he reserved his comments on possible conflicts of interest in the procurement of contractors by the district technocrats, he said particular recommendations of the PPDA report were being worked on.

“On consulting the Solicitor General, we have since been doing it, for example, to seek insurance for the projects which [is] being processed. On alleged fraudulent dealings like the boreholes, I can’t say much on the boreholes, I need to consult,” he added.