The Republic of Uganda Report of the Auditor General on the Financial Statements of Uganda National Roads Authority for the Fina

THE REPUBLIC OF UGANDA

REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF UGANDA NATIONAL ROADS AUTHORITY FOR THE FINANCIAL YEAR ENDED 30TH JUNE 2020

OFFICE OF THE AUDITOR GENERAL UGANDA

TABLE OF CONTENTS

REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF UGANDA NATIONAL ROADS AUTHORITY FOR THE FINANCIAL YEAR ENDED 30TH JUNE, 2020 ...... 3 Opinion ...... 3 Basis for Qualified Opinion ...... 3 1.0 Improperly maintained Receivables Ledgers ...... 3 2.0 Mischarge of Expenditure –UGX 289,157,979,077 ...... 3 Key Audit Matters...... 4 3.0 Implementation of the approved budget ...... 4 Emphasis of Matter ...... 10 4.0 Unbudgeted for domestic arrears- UGX.452,810,845,128 ...... 10 Other Information ...... 11 Management Responsibilities for the Financial Statements ...... 11 Auditor General’s Responsibilities for the audit of the Financial Statements ...... 12 Other Reporting Responsibilities ...... 13 Report on the Audit of Compliance with Legislation ...... 13 5.0 Management of the Authority Fleet ...... 13 6.0 Nugatory Expenditure - Interest on delayed payments to contractors – ...... 19 UGX. 7,309,410,300 ...... 19 7.0 Slow progress of works ...... 19 8.0 Road Maintenance Funds ...... 22 9.0 Inadequate feasibility studies during planning and design of Nakalama- Tirinyi-Mbale Road… ...... 22 10.0 Liquidated damages on Hima-Katunguru road project- UGX 1,873,318,398 ...... 24 11.0 Engineering Audit of a selected sample of Road Development, Bridge, Rehabilitation and maintenance Projects implemented during the year ...... 24 11.1 Background ...... 24 11.2 Inadequate planning ...... 25 11.3 Delays in completion of design reviews ...... 26 11.4 Delays in progress of works ...... 27 11.5 Use of lump sum contracts ...... 27 11.6 Inclusion of contingency in design and build contracts ...... 28 11.7 Unrealistic rates by Contractors ...... 28 11.8 Unenforceable clauses in works contracts ...... 29 11.9 Lack of dispute boards ...... 29 11.10 Inclusion of unnecessary items in BOQs ...... 29 11.11 Inadequacies in work programs...... 30 APPENDICES ...... 32

REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF UGANDA NATIONAL ROADS AUTHORITY FOR THE FINANCIAL YEAR ENDED 30TH JUNE, 2020

THE RT. HON. SPEAKER OF PARLIAMENT

Opinion

I have audited the accompanying financial statements of Uganda National Roads Authority for the year ending 30th June 2020, which comprise the Statement of Financial Position as at 30th June 2020, and the Statement of Financial Performance, Statement of Changes in Equity and Statement of Cash Flows together with other accompanying statements for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In my opinion, except for the possible effect of the matters described in the Basis for Qualified Opinion section of my report, the financial statements of Uganda National Roads Authority for the year ended 30th June 2020 are prepared, in all material respects, in accordance with section 51 of the Public Finance Management Act, 2015 and the Financial Reporting Guide, 2018.

Basis for Qualified Opinion

1.0 Improperly maintained Receivables Ledgers

Receivables totalling to UGX.604,835,635,481 relating to Development and maintenance projects were reported in the financial statements for the year. However, contracts and receivables ledgers were improperly maintained or not maintained for some of the road projects. Without proper ledgers, I was unable to confirm the accuracy and completeness of the figures reported for the advances and recoveries therefrom.

2.0 Mischarge of Expenditure –UGX 289,157,979,077

Expenditure totalling to UGX 289,157,979,077 (UGX 288,713,825,335 from UNRA TSSA and UGX 444,153,742 from UNRA Road Funds) was charged on budget lines to fund activities that were not planned for without authority. The practice undermines the budgetary process and the intensions of the appropriating authority as funds are not utilized for the intended purpose. The accuracy and completeness of the financial statements is compromised, since the figures reported therein do not reflect the actual amounts and outputs for which the funds were expended.

I conducted my audit in accordance with International Standards of Supreme Audit Institutions (ISSAIs). My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Uganda National Roads Authority in accordance with the Constitution of the Republic of Uganda (1995) as amended, the National Audit Act, 2008, the International Organization of 3

Supreme Audit Institutions (INTOSAI) Code of Ethics, the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B) (IESBA Code), and other independence requirements applicable to performing audits of Financial Statements in Uganda. I have fulfilled my other ethical responsibilities in accordance with the IESBA Code, and in accordance with other ethical requirements applicable to performing audits in Uganda.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my qualified opinion.

Key Audit Matters

Key audit matters are those matters, in my professional judgment, were of most significance in my audit of the financial statements of the current period. These matters were addressed in the context of my audit of the financial statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on this matter. In addition to the matters described in the Basis for Qualified for Opinion section of my report, I have determined the matter described below to be a key audit matter communicated in my report.

3.0 Implementation of the approved budget

Every year, Government plans and allocates funds to MDAs for implementation of activities that would enable the country to attain sustainable development. I observed that MDAs have challenges with regard to implementation of planned activities, which negatively affects service delivery and improvement of the people’s wellbeing. As a result, the implementation of the approved budget was considered a key audit matter and during the office-wide planning, I identified risks common with MDAs which include; non-implementation of strategic plans, underperformance of revenue, implementation of off-budget activities, under absorption of funds, insufficient quantification of outputs, partial and non-implementation of outputs, diversion of funds and challenges in budget monitoring and reporting of performance.

Uganda National Roads Authority has a constitutional mandate to manage, maintain and develop the national roads network; to advise the Government on policy matters concerning roads generally, and to assist in the co-ordination and implementation of the policies governing road development and maintenance.

In order to achieve this mandate, the Authority planned to implement and achieve a number of both recurrent and development outputs under various programmes. A review of the entity’s budget revealed that the UNRA had an approved budget of UGX 4,019,068,912,990, out of which UGX 2,580,880,000,000 was released. Table 1 below shows a summary of the key deliverables for the financial year 2019/20.

Table 1: Showing key deliverables for UNRA for the year S/n Key projects Amount spent Percentage of (UGX Bn) expenditure 1 01 Finance and Administration 93.87 4.1 2 0265 Upgrade Atiak - Moyo-Afoji (104km) 6.36 0.3 3 0267 Improvement of Ferry Services 26.77 1.2 4 0952 Design Masaka-Bukakata road 67.34 2.9 5 0957 Design the New Nile Bridge at Jinja 27.57 1.2 1034 Design of Mukono-Katosi-Nyenga 6 (72km) 55.48 2.4 1035 Design Mpigi-Kabulasoka-Maddu (135 7 km) 31.63 1.4 8 1040 Design Kapchorwa-Suam road (77km) 27.55 1.2 1041 Design Kyenjojo-Hoima-Masindi- 9 Kigumba (238km) 46.16 2.0 10 1042 Design Nyendo - Sembabule (48km) 26.06 1.1 11 1176 Hoima-Wanseko Road (83Km) 132.37 5.8 12 1180 Kampala Entebbe Express Highway 12.01 0.5 13 1274 Musita-Lumino-Busia/Majanji Road 45.28 2.0 14 1275 Olwiyo-Gulu-Kitgum Road 5 53.57 2.3 15 1276 Mubende-Kakumiro-Kagadi Road 81.05 3.5 16 1277 Kampala Northern Bypass Phase 2 96.07 4.2 17 1278 Kampala-Jinja Expressway 15.04 0.7 1279 Seeta-Kyaliwajjala-Matugga-Wakiso- 18 Buloba-Nsangi 18.73 0.8 1280 Najjanankumbi-Busabala Road and 19 Nambole-Namilyango-Seeta 14.28 0.6 20 1281 Tirinyi-Pallisa-Kumi/Kamonkoli Road 133.44 5.8 1310 Albertine Region Sustainable 21 Development Project 18.12 0.8 1311 Upgrading Rukungiri-Kihihi- 22 Ishasha/Kanungu Road 18.54 0.8 1312 Upgrading Mbale-Bubulo-Lwakhakha 23 Road 30.12 1.3 1313 North Eastern Road-Corridor Asset 24 Management Project 8.62 0.4 25 1319 Kampala Flyover 43.71 1.9 26 1320 Construction of 66 Selected Bridges 67.41 2.9 1322 Upgrading of Muyembe-Nakapiripirit 27 (92 km) 70.13 3.1 28 1402 Rwenkunye- Apac- Lira-Acholibur road 14.5 0.6 1403 Soroti-Katakwi-Moroto-Lokitonyala 29 road 143.83 6.3 30 1404 Kibuye- Busega- Mpigi 78.27 3.4

31 1490 Luwero- Butalangu 1 0.0 32 1503 Karugutu-Ntoroko Road 0.43 0.0 33 1506 Land Acquisition 413.64 18.1 34 1510 UNRA Retooling Project 74.08 3.2 35 1536 Upgrading of Kitala-Gerenge Road 5.72 0.3 36 1537 Upgrading of Kaya-Yei Road 2 18.05 0.8 1538 Development of Nakaseke-Ssingo- 37 Kituma road 9.02 0.4 38 1543 Kihihi-Butogota-Bohoma Road 23.37 1.0 39 1544 Kisoro-Lake Bunyonyi Road 0.9 0.0 1545 Kisoro-Mgahinga National Park 40 Headquarters Road 1.8 0.1 41 1546 Kisoro-Nkuringo-Rubugiri-Muko Road 1.79 0.1 42 1547 Kebisoni-Kisizi-Muhanga road 23.22 1.0 43 1548 Nansana-Busunju Section I 1.23 0.1 44 1549 Nansana-Busunju II 22.13 1.0 1550 Namunsi-Sironko/Muyembe- 45 Kapchorwa Section I 19.73 0.9 46 1551 Fortportal Kyenjojo Road 28.78 1.3 47 1552 Hoima-Katunguru Road 22.62 1.0 48 1553 Ishaka-Rugazi-Katunguru Road 54.72 2.4 49 1554 Nakalama-Tirinyi-Mbale Road 37.03 1.6 50 1555 Fortportal Hoima Road 22.45 1.0 2285.59 100

UNRA planned to achieve its deliverables through implementation of 43 outputs with a budget of UGX 4,019bn. I sampled 16 outputs worth UGX 1,245bn; representing 55% of the total releases.

From the procedures undertaken, I noted the following (as per Table 2 below).

Table 2: Showing a summary of key findings on the implementation of the entity’s budget

No Observations Recommendations 3.1 Implementation of the strategic plan I advised the Accounting officer to ensure that The overall Government National Development Plan (NDP period evaluation of the II) expired at the end of FY 2019/20. In line with the NDP implementation of the II, the UNRA had a strategic plan for the period 2015/16 - strategic plan is 2019/20, which set out both the long term and short-term undertaken. targets to be achieved during the duration of the strategic

plan.

This being the last year of implementation of the UNRA’s strategic plan, UNRA was expected to undertake an evaluation of the progress made in the achievement of the strategic goals and objectives. However it was observed that UNRA had not undertaken the end line evaluation. Consequently, I was not able to undertake the planned audit procedures to enable me assess the achievements made during the implementation period.

Failure to evaluate performance hinders effective accountability for funds allocated to the entity during the strategic plan period.

The Accounting Officer explained that the Approved UNRA Strategic Plan implementation period run from 2017/18 to 2022/25 so as to align with the implementation period of the NDP II and it’s evaluation is done on annual basis with the last undertaken in the last year of the NDPII and the UNRA Corporate Strategy Implementation Period.

The Accounting Officer further explained that assessment of UNRA’s achievements during the NDP II and UNRA Corporate Strategy Implementation Periods are highlighted in the UNRA Annual Performance Report 2019/20.

Whereas the Accounting Officer indicated the Authority had undertaken evaluations, no evidence was provided to support the assertion.

3.2 Revenue Performance I advised the Accounting Officer to liaise with Section 15(1) of the Public Finance and Management Act relevant authorities and (PFMA) 2015 states that after approval of the annual ensure that the budget by Parliament, the Secretary to Treasury shall issue budgeted funds are fully the annual cash flow plan of Government, based on the released, to enable the procurement plans, work plans and recruitment plans implementation of approved by Parliament. Section 15(2) of the PFMA states planned activities. that the annual cash flow plan issued under subsection (1) shall be the basis for release of funds by the Accountant General to the Accounting Officers. Further, Section 15 (3) requires that an Accounting Officer shall commit the budget of a vote, based on the annual cash flow plan issued under this section. A review of the entity’ revenue performance revealed the following:  The entity had an approved budget of UGX. 4,019,068,912,990 during the year. However, UGX.2,677,574,546,630 (66.6%) was warranted resulting in a budget shortfall of UGX.1,341,494,366,360, which affected 7

implementation of planned activities.  Out of the total receipts for the financial year of UGX. 2,677,574,546,630 the Authority spent UGX. 2,279,371,610,152 representing an absorption level of 85.1% leaving unspent balances of UGX.398,202,936,478, of which the GoU component was returned to the Consolidated Fund while the external financing component remained on the respective UNRA project accounts.

The Accounting Officer explained that the shortfall was due to external funding that was never disbursed because the financing agreement of some projects like Oil Roads had not been signed and procurement delays. The financing Agreement has since been signed and funds utilized.

The Accounting Officer further explained that the external funds could not be fully utilized due to delays in completion of procurement process of some projects like Rwenkunye Apac, Muyembe Nakapiripirit.

3.3 Performance of NTR The Accounting Officer should liaise with According to the the NTR estimates for the financial year MoFPED to ensure that 2019/2020, UNRA projected to collect NTR amounting to realistic revenue targets UGX 12bn. Out of this, only UGX 2,634,160,774 was are set, and the revenue collected, representing a performance of 22% of the collected is in line with target. I also noted a decline of 72.5% in the NTR the approved estimates. collected from the previous year of UGX 9,586,629,574 to UGX. 2,634,160,774.

Shortfalls in NTR collections affect the implementation of planned activities.

The Accounting Officer explained that the NTR target set by MoFPED was high and unrealistic for an entity like UNRA which is not a revenue generating entity.

3.4 Quantification and implementation of outputs and I advised the Accounting activities Officer to ensure that all outputs are sufficiently Paragraph 55 of the budget execution circular for the quantified during the financial year 2019/2020 states that the Accounting Officer budgeting process to is required to submit quarterly performance reports by the facilitate proper 30th day of the first month of the next quarter. These monitoring and reports should indicate the actual performance against the evaluation. planned outputs and performance for each quarter, I also advised the showing the quantity/quality and physical location of the Accounting Officer to reported outputs against expenditure. initiate strategies to 8

ensure that all the I reviewed the implementation of sixteen (16) sampled partially implemented outputs having a total of sixty three (63) activities and activities are rolled over expenditure of UGX.962.438bn. I noted that out of the to the next financial sixteen (16) sampled outputs with a total number of sixty year and subsequently three (63) activities, fifty nine (59) activities had clear set implemented. targets to enable assessment of performance while four (4) activities lacked targets.

I also noted that out of the sixty-three (63) activities, twenty-eight (28) were fully achieved; fourteen (14) were partially achieved; and eighteen (18) were not achieved. Details on the outputs are given in Appendix 1 to this report.

For the activities that lacked targets I observed that, Management reported performance in generic ways such as maintenance of vehicles, purchase of fuel among others.

Failure to plan and report on the quality/quantity of activities implemented renders it difficult to establish the reasonableness of individual activity costs for each planned output which curtails effective accountability when funds are subsequently spent. Further, without clearly and fully quantified activities, I could not ascertain the level of achievement of these activities and whether funds appropriated by Parliament were spent for the intended purpose.

The Accounting Officer explained that the planning and implementation of activities was affected by COVID_19. The Accounting Officer further explained that Management has put in place procedures and measures in planning of activities to mitigate the effects and disruptions caused by COVID 19 Pandemic in implementation of projects. The Pandemic is still on and assessment will be done basing on guidance given by Government. An impact assessment of COVID19 on UNRA projects and operations will be undertaken to support future decisions and planning.

3.5 Diversion/Mischarges of expenditure I advised the Accounting Officer to always The Parliament of Uganda appropriates funds through the streamline the budget budget in accordance with the agreed priorities of the process to ensure that country and this appropriation is tagged to particular sufficient funds are activities and outputs using both account and MTEF codes. allocated to each Paragraph 8.5.2 of the 2017 Treasury Instructions states account and budget that, the implementation of the budget shall strictly follow controls are fully the work plans, procurements, and recruitment plans as adhered to such as 9

approved by parliament. seeking authority for Contrary to this, I noted that funds earmarked for the any reallocations in selected outputs to the tune of UGX 288,713,825,335 accordance with the were irregularly mischarged from the activities for which it regulations was budgeted and spent on other activities without seeking and obtaining the necessary approvals. (Appendix 2 (i)).

Mischarge of expenditure is an indication of Management override of the established budgetary and commitment control procedures. It impacts on the credibility of the budget and, accuracy and completeness of the financial statements, since the figures reported therein do not reflect the actual amounts expended. Also, planned activities remain unexecuted as funds are diverted elsewhere.

The Accounting Officer explained that some activities were accelerated and the allocated funds could not settle all obligations while funds allocated to other activities did not progress and had not been absorbed due to delays in the procurement process, effects of COVID 19 pandemic and the law limiting to 10% reallocation.

Emphasis of Matter

Without qualifying my opinion further, I draw attention to the following matter presented in the financial statements that, in my judgement, is of such importance and fundamental to users’ understanding of the financial statements:

4.0 Unbudgeted for domestic arrears- UGX.452,810,845,128

Section 13(10) (a) (iv) of the Public Finance Management Act, 2015 states that the annual budget shall indicate a plan for the Government debt and financial liabilities for the financial year to which the annual budget relates.

Review of the approved budget estimates and the statement of Appropriation account (based on nature of expenditure) revealed that UNRA budgeted for UGX 20,000,000,000 in respect of domestic arrears. The amount was warranted and released during the year. However, it was observed that domestic arrears paid during the year totalled to UGX.472,810,845,128 resulting in unappropriated expenditure of UGX452,810,845,128. There was also no evidence that supplementary funding was obtained to settle the outstanding domestic arrears.

Unbudgeted expenditure leads to diversion of funds.

The Accounting Officer explained that commitments of ongoing multiyear projects are presented as Domestic Arrears to comply with Accounting period. The funding of commitments for ongoing projects referred to as domestic arrears is always appropriated under relevant line items within the current budget. Whereas Management further explained the arrears were provided for, the funds were deducted from the current year operations to cover the arrears.

I advised the Accounting Officer to:

 Ensure adherence to the commitment control system to limit accumulation of domestic arrears and seek for Parliamentary authority to reallocate funds to settle the domestic arrears to avoid diversion of funds.

 Endeavour to come up with a debt settlement plan with the various creditors to avoid possible litigation and the associated costs.

Other Information

The Accounting Officer is responsible for the other information. The other information comprises the statement of responsibilities of the Accounting Officer and the commentaries by the Head of Accounts and the Accounting Officer, and other supplementary information. The other information does not include the financial statements and my auditors’ report thereon. My opinion on the financial statements does not cover the other information and I do not express an audit opinion or any form of assurance conclusion thereon.

In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially consistent with the financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard.

Management Responsibilities for the Financial Statements

The Accounting officer is responsible for the preparation and fair presentation of these financial statements in accordance with Section 51 of the Public Finance Management Act, 2015, and the Financial Reporting Guide, 2018 and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error.

In preparing the financial statements, the Accounting Officer is responsible for assessing UNRA’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless the entity’s management either intend to liquidate the Authority or to cease operations, or have no realistic alternative but to do so.

The Accounting Officer is responsible for overseeing the Authority’s financial reporting process.

Auditor General’s Responsibilities for the audit of the Financial Statements

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISSAIs will always detect a material misstatement, when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users, taken on the basis of these financial statements.

As part of an audit in accordance with ISSAIs, I exercise professional judgement and maintain professional scepticism throughout the audit. I also:

 Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control.  Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.

 Conclude on the appropriateness of Accounting Officer’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Authority’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the Authority to cease to continue as a going concern.

 Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

I communicate with the Accounting Officer regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

I also provide the Accounting Officer with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards.

From the matters communicated with the Accounting Officer, I determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I describe these matters in my auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Reporting Responsibilities

In accordance with Section 19 (1) of the National Audit Act, 2008, I report to you, based on my work described on the audit of Financial Statements, that; except for the matters raised in compliance with legislation section below, and whose effect has been considered in forming my opinion on the financial statements, the activities, financial transactions and information reflected in the financial statements that have come to my notice during the audit, are in all material respects, in compliance with the authorities which govern them.

Report on the Audit of Compliance with Legislation

The material findings in respect of the compliance criteria for the applicable subject matters are as follows;

5.0 Management of the Authority Fleet

Over the years, there has been increasing demand for accountability and better management of public resources by various stakeholders in Uganda, such as: the Executive arm of Government, Parliament, Citizenry, Donors, and Civil Society, among others that prompted the Office of the Auditor General (OAG) to select fleet management as one of the key audit matters for the audit year 2020.

Subsequently, the office developed procedures in order to assess the adequacy of government fleet management system in the delivery of public service, and to identify any impediments and make recommendations for improvement. Specifically, the audit included ascertaining whether government vehicles were/are;

 Acquired in compliance with Government vehicle acquisition guidelines; 13

 Are comprehensively recorded in the assets register to ensure their proper management;  Are adequately allocated, operated and utilized to enable delivery of public service;  Are properly and regularly maintained to achieve optimal performance, increased useful lives and reduced running costs; and  Are disposed in compliance with PPDA guidelines, and disposal proceeds properly accounted for.

The study took a scope of three financial years: 2017/18-2019/20. From the procedures undertaken, I noted the following key observations;

Key Observations Audit Recommendation 5.1 Acquisition of motor vehicles I advised the Accounting officer 5.1.1 Funding of fleet to liaise with the During the three (3) financial years: 2017/18-2019/20; UNRA Ministry of Finance planned to spend UGX.11,241,846,416 on acquisition of vehicles for the funding from government funding. A total of UGX.8,150,862,854 was necessary to scale warranted and released by the Treasury for this purpose, and up the fleet size the Authority the funds in the acquisition of 38 vehicles over the required for three (3) year period. effective delivery of the entity’s Comparison of the budgets with the actual funding revealed mandate. shortfalls of UGX.3,090,983,562 (27%) implying that the entity could not procure all the vehicles as planned, which may negatively impact on its operations.

The Accounting Officer explained that a needs analysis of fleet requirement for the Authority was undertaken. The Authority requested for funding which was never obtained. UNRA explored other options and suggested them to Ministry of Finance which resulted into approval of Vehicle Leasing model that is currently under procurement.

5.1.2 Non-compliance with Government Ban on Acquisition of I advised the Accounting Officer Motor Vehicles to always adhere to According to the Circular letter Ref; BDP/86/107/03 and dated issued guidelines 15th May 2019 from the Permanent Secretary and Secretary to and/or seek the Treasury to all Accounting Officers, Government issued a authority before freeze order on purchase of vehicles by all MDAs during FY deviating from the 2019/20 with the exception of 5 Votes, which included; Office of set guidelines. the President, State House; Ministry of Defence and Veteran Affairs; Ministry of Foreign Affairs; and Uganda Revenue Authority. Further guidance from the Ministry of Public Service (MoPS) 14

through a Circular letter Ref; ADM 99/205/01 and dated 21st August 2019 provided that clearance would only be given for procurement of vehicles under on-going donor funded projects. It was noted that the UNRA acquired two (2) vehicles at a total cost of UGX 677,849,549 during the FY 2019/20 using GoU funds contrary to the issued guidelines. There was no evidence of a waiver issued to the entity by PS/ST allowing acquisition of vehicles.

Non-compliance with the Government ban on acquisition of motor vehicles undermines the intended Government objective of controlling expenditure on purchase of vehicles.

Although the Accounting Officer explained that the clearance for purchase of these vehicles was obtained from Ministry of Public Service, I was not provided with the clearance letter to confirm

5.1.3 Unplanned acquisition of motor vehicles I advised the Accounting Officer Paragraph 8.6.2 of the Treasury Instructions (Tis), 2017 requires to ensure that the implementation of the budget to follow the work plans, needs assessment procurement and recruitment plans approved by Parliament. is undertaken and vehicles planned for However, examination of the submitted procurement plans for procurement are the last three financial years revealed that out of the 38 vehicles included in the procured two (2) motor vehicles purchased in the FY 2019/2020 approved work plan with a total cost of UGX. 677,849,549 were not in the annual and procurement work plan and procurement plan. The anomalies were attributed plans in accordance to the failure by Management to enforce compliance with the with the financial existing financial and procurement guidelines. and procurement guidelines. Funds utilized for the purchase of these vehicles could have been diverted from other planned activities.

Although the Accounting officer explained that the procurement of vehicles was in Road Fund work plan and procurement Plan of UNRA. The availed work plan and procurement plan did not indicate plans for procurement of these vehicles.

5.2 Motor vehicle recording I advised the Accounting Officer 5.2.1 Un-updated Asset Management Module in the Financial to liaise with the Management system Accountant General and ensure the Paragraph 10.13.4 of the Tis, 2017 requires all fixed assets IFMS asset module acquisitions to be captured in the fixed assets module of the is regularly updated Government Computerised Financial Management Information to enable accurate System (GFMIS). recording of fixed assets in the I noted that all vehicles acquired over the 3 years under review financial 15

were not captured in the fixed assets module of the GFMIS. All statements, and the vehicles acquired at a cost of UGX. 8,150,862,854 over the maintenance of a period under review were not posted onto the Asset comprehensive Management module in the Integrated Financial Management assets register. system (IFMS) as at the end of the financial year 2019/2020.

Non-recording of the assets in the assets management module in the IFMS may lead to misstatement of assets recorded in the financial statements, and may cause challenges in reconciliation of the fixed assets register using system information.

The Accounting Officer explained that the function of updating Assets in IFMS Asset Module is not yet enabled. Historical information of Assets was submitted to Ministry of Finance for uploading into the IFMS. UNRA operates Assets and inventory Management System that runs Asset management processes including production of Fixed Assets Register.

5.3 Drivers’ Competences for adequate operation of entity fleet I advised the Accounting Officer to, going forward Section 14 of part F-I of public standing Orders, 2010 provides arrange the that to encourage and sustain the highest level of care and trainings for the responsibility for Government vehicles on the part of individual drivers, and also drivers, the following shall apply: - ensure enforcement of the procedures  Undergo a driving test by the Chief Mechanical Engineer put in place to prior to assumption of duty; assess drivers’  Periodic training including defensive driving at a recognized competences and Training Institute; fitness.  Periodic testing every three years on traffic regulations and an annual medical check-up including eye testing.

A review of staff records revealed that the Authority had eighty- five (85) drivers. Further review of records on driver’s competence revealed the following matters;

i. There was no evidence of annual medical examination being done to obtain their fitness status. This may put the lives of the officials they drive in danger in case of any medical challenge that may hamper their ability to drive.

ii. It is a recruitment requirement for all prospective drivers to undergo a driving test conducted by the Chief Mechanical Engineer prior to assumption of duty; this was not evident in UNRA records.

The Authority does not comply with the requirements for

periodic assessment of drivers’ competence thus pausing a danger to the officials they drive.

The Accounting Officer explained that:

• Prior to hiring, all Fleet Assistants undergo a driving practical test, which they must pass to meet conditions of hire • Eye Testing is done at the renewal of the driving permits • Between October and November 2017, a total of 158 Fleet Assistants were trained in defensive driving by Prestige Driving School at Gulu, Hoima, Mbarara, Luweero, Mbale, Soroti and Bugolobi. • The remaining 37 were to be trained in FY 2019/2020 but due to the COVID 19 pandemic this programme was disrupted. Subject to funding, a refresher for all Fleet Assistants will be organized in the future. • In May 2018, 34 Fleet Assistants were trained in Occupational Safety and Health. This is a critical training designed for all UNRA staff. • The remaining Fleet Assistants would be trained as and when we resume rolling the OSH Training. • All drivers have medical cover and ensure mandatory testing • Management would consider the undertaking an annual assessment to ascertain fitness to work.

5.4 Vehicle maintenance

5.4.1 Adequacy of Vehicle Maintenance Funding I advised the Accounting Officer Paragraph 16.9.1 of the TIs, 2017 requires the Accounting to ensure that the Officer to prepare an annual budget for asset maintenance, and vehicle assess the functionality, utilization, and physical and financial maintenance costs performance of assets held. are kept at the minimum. A review of the approved work plan and budget, revealed that the budget for vehicle maintenance for 3 years (20017/2018, 2018/2019 and 2019/2020) totalled to UGX.5,000,000,000. However, review of expenditures was for only two financial years (2018/2019 and 2019/2020) due to lack of information about vehicle maintenance for the year 2017/2018. Therefore out of the vehicle maintenance budget for the two (2) FYs 2018/2019 and 2019/2020 of UGX 4,000,000,000 UNRA realised and spent a total of UGX. 3,479,899,701 reflecting a funding shortfall to the tune of UGX.520,100,299, which is 13% of the budgeted vehicle maintenance funds.(table 2 below)

Table2: showing Funding for maintenance

FY Vehicle No. of No. of Amount Averag Variance Maintenance operat operat spent e (A-C) Budget (A) ional ional (C) spendi entity entity ng per motor motor vehicl Vehicl cycles e es (B) (C/B) 2017/18 1,000,000,000 - - - - - 2018/19 2,000,000,000 220 46 1,629,899 7,408,6 370,100,2 ,701 35 99 2019/20 2,000,000,000 220 46 1,850,000 8,409,0 150,000,0 ,000 90 00 Totals 5,000,000,00 3,479,89 15,817 520,100, 0 9,701 ,725 299

The annual average vehicle maintenance cost per vehicle increased from UGX.7,408,635 in FY 2018/19 to UGX.8,409,090 in FY 2019/20.

The Accounting Officer explained that UNRA has old fleet with a life of 5 years and above which is susceptible to break down that necessitates regular maintenance hence increased expenditure. This concern was discussed with Ministry of Finance and agreed on a different approach of Vehicle leasing where maintenance will be the responsibility of the lessor. The procurement of Vehicles under operating lease is ongoing and old vehicles will be disposed gradually.

5.5 Disposal of vehicles

5.5.1 Non-compliance with disposal conditions I advised the Paragraph 15.11.1 of the TIs, 2017 requires that where it is Accounting officer considered that vehicles have reached the end of their useful to evaluate the life; are beyond economical repair or are unserviceable for any fleet mix to other reason; or have become redundant through obsolescence; adequately make shall be retained until a sufficient quantity is accumulated to use of the available merit the convening of a Board of Survey to inspect them, and it funds. For example, shall be the duty of such Board to determine the action to be smaller vehicles taken, including the decision to board them off. with lower capacities may be UNRA had a total of 395 vehicles. On review of the Board of purchased for survey reports for the period under review, it was noted that out officers who do not of 395 vehicles in the assets register, 341 vehicles had exceeded have field activities the recommended 5 years useful life, and 170 of these vehicles instead of had their mileage above the recommended 250,000km, hence purchasing high were all due for disposal. See summary below: capacity vehicles.

Showing number of vehicles in use with respective years and mileage Years in use Mileage (Number of vehicles) (Number of vehicles) 0-5 yrs 5-10 yrs Above 10 Below Above yrs 250,000km 250,000km 54 217 124 225 170

Continued usage of old vehicles results into high costs of maintenance and uneconomical fuel consumption.

The Accounting Officer explained that UNRA lacks funding to purchase new vehicles and in order to keep operational, old vehicles could not be disposed without replacement. The Board of survey exercise is ongoing in preparation for disposal of vehicles when the procurement of new vehicles under leasing model is completed.

6.0 Nugatory Expenditure - Interest on delayed payments to contractors – UGX. 7,309,410,300

I observed that UNRA made payments amounting to UGX 7,309,410,300 (appendix 3) that arose out of penalties for the court cases and interest on delayed payments of advances and IPCs invoices from various contractors.

Funds that were budgeted and allocated for planned activities were diverted towards payments of these fines and court penalties. The expenses on interest and penalties are considered nugatory.

The Accounting officer explained that the Authority has been experiencing inadequate funding leading to its inability to settle certificates of approved works within the contractual period. Contractors invoke the clause in the contract and claim interest on unpaid Certificates.

I advised the Accounting Officer to strengthen the risk management function to facilitate early identification and mitigation of risks of loss associated with management of contracted works.

7.0 Slow progress of works

7.1 Slow progress of work on Kampala flyover construction and Road upgrading project

The contract agreement for Kampala flyover construction and Road upgrading project; Lot-1 (Package 1: Clock Tower Flyover and Package 2: Nsambya - Mukwano Road) was 19

signed on 17th September 2018 with Shimizu-Konoike joint venture as the contractor for the accepted contract amount of the equivalent of JYP 2,289,324,131, USD 43,778,555.82 and UGX 61,502,640,727. The official commencement date for the project was 4th May 2019 and completion date of 28th December 2021 thus the total contract time agreed of 970 days.

Section 20.1 of the general conditions of the contract indicates that if the contractor considers himself to be entitled to any extension of the time for completion and/or any additional payment, in connection with the contract, the contractor shall give notice to the Engineer not later than 28 days.

Review of the Monthly progress and quality control report No. 17 for September 2020 indicated that by the end of the September 2020 the overall progress of the project works including the general items and the provisional sums was estimated to be 11.11% against the planned progress of 39.5%, the progress of physical works was estimated to be 4.94% and the total contract time that had elapsed was 53.2%. Financial progress was estimated at 21.24% (including the advance payment) against the planned 50%.

Further review of the progress report revealed that the contractor has mobilised very limited equipment for the road works, for instance, the screwed steel pile driving equipment, graders, rollers, tipper trucks and other equipment have not been mobilised yet by the end of September 2020. The contractor’s ability to mobilise the required resources is questioned and it will further slowdown the works progress.

This significant slow progress of the works has culminated into contractor’s claims and notices; to-date the contractor has claimed for extension of time of 385 days. On his part, the contractor has claimed the need for extensions to be due to abnormal rainfall, late utility relocation, late land acquisition, late availability of access to site, late submission of project designs by the engineer and effect of COVID 19 on contractors working hours.

Slow progress of works inconveniences the city dwellers that ply those routes where construction is taking place and will result in escalation of project costs.

The Accounting Officer explained that the contractor has given notices for delays and submitted his claims for Extension of Time (EoT) in accordance with the provisions of the Contract. These delays are attributed to delayed mobilization of equipment, delayed relocation of utilities from the Right of Way, inclement weather and Covid-19 outbreak among others. The revised work program is being prepared by the Contractor for monitoring progress of works in accordance with the Contract. The Contractor will also be reminded about the need for urgently mobilize the outstanding key road construction equipment, materials and manpower.

I advised the Accounting Officer to;

 Ensure that the contractor is offered full access to the site through timely compensation of the Project affected persons and timely submission of project designs to the contractor so as to avoid claims and notices to claim.

 Compel the contractor to mobilize all the necessary equipment for the project works.

7.2 Delayed capacity improvement of the Kampala Northern By-Pass

The contract agreement with a private firm worth Euro 67,394,566.56 (excluding contingencies and VAT) for Capacity Improvement of the Kampala Northern By-Pass was signed on 7th April 2014 with a commencement date of 14th July 2014, and contract period of 36 months to 14th July 2017. The contract period has been revised a number of times, the latest being the extension of time up to 22nd October 2021, an extra 51 months, with an estimated revised contract price of Euro 129,827,888.

The main reasons for the extension of times were the delayed access to site at various locations, delayed relocation of utilities obstructing the planned works, the addition and increased scope of works and quantities and limited equipment deployment in the early period of the project. The monthly progress report of September 2020 indicated that works were estimated to be at 77.4%The construction that had been planned to take 36 month (3years) has so far taken 78 months (6 and half years), a time escalation of 217%, and still on going.

Delayed completion of works inconveniences surrounding business community and denies the intended beneficiaries timely use of the infrastructure and may result in escalation of project costs. The projects costs have escalated from Euro 67,394,566.56 to Euro 129,827,888 (92.7% increment).

The accounting officer explained that there were challenges that were experienced during the land acquisition process that arose from; disputed compensation amounts by PAPs, family disputes over ownership, absentee landlords, injurious affection, design improvements and the need to acquire way leaves for the relocation of utilities. As of October 2019, the Contractor had access to all the six interchanges ie Sentema, Hoima, Gayaza, Kyebando, Ntinda and Naalya and work is progressing at all the sites.

The increased scope of quantities were due to the numerous gaps of the design that were identified during the design review process and a revision of the design was proposed that was found necessary for the proper completion and functioning of the bypass road.

I advised the Accounting Officer to ensure that the contractor and the consultant expedite the completion of the construction works.

8.0 Road Maintenance Funds

8.1 Ineligible expenditure - UGX. 444,153,742

Paragraph 9 (a) of the performance agreement signed between UNRA and URF states that unless the Fund otherwise agrees, the Designated Agency shall apply the Finance Sum only for Road Maintenance. The Designated Agency shall ensure that the whole amount of the Finance Sum is utilized during the Financial Year and applied exclusively for Road Maintenance in accordance with the Annual Road Maintenance Programme.

Review of the expenditure details relating to URF funding indicated that UNRA spent a total of UGX 444,153,742 on activities that were unrelated to road maintenance contrary to the requirements. Appendix 2 (ii) refers. Use of URF funds on ineligible activities frustrates the implementation of the planned activities under the URF approved annual road maintenance work plan.

The Accounting Officer indicated that expenditure was part of the Operational Expenses approved by the Road Fund in the Annual Workplan of FY 2019/2020. However, audit established that the activities financed under these expenditures were not related with Comment [KN1]: Confirm this insertion. In road rehabilitation as financed by Uganda road Fund order for the issue to make sense, I presume that verification is what revealed this.

I advised the Accounting Officer to avoid utilising funds on activities that are not On a look at the appendix however I find that the financed by the Uganda Road fund. funds were used to buy tyres. I don’t know if we have sufficient evidence to prove that the tyres were not for vehicles used in road rehabilitation. 9.0 Inadequate feasibility studies during planning and design of Nakalama- Comment [CM2]: There was no specific Tirinyi-Mbale Road provision in the agreement relating to the use of the funds for vehicle repairs or tyres. UNRA entered into a contract with Dott Services for rehabilitation of Nakalama-Tirinyi Mbale road under contract number UNRA/WORKS/2013-14/00025/01/06 at a contract sum of UGX 135,371,669,415. The contract was to commence on 23rd April 2018 and end on 22nd May 2020. Review of the project documents, the BOQ and payment certificates revealed that by the time the project was at 67% completion (financial completion), the executed quantities for items in the BOQ like earthworks, compaction, rock fill, materials like crushed stone, labour and others exceeded the planned quantities some by over 200%. Table 5 below refers.

Table 5: Differences in original quantities and those on the project

ORIGINAL QUANTITY SO NET % Item bill no QUANTITIES FAR DIFFERENCE DIFFERENCE

14.05 (c) operate vehicles specified for travel distance in 120,000 446,890 326,890 272.41 excess of average 3000km per month (km)

14.13 communication(b) 18 21.419 3 18.99 33 TOTAL BILL AMOUNT 1,054,344,000 3,009,389,297 1,955,045,297 185.43 36 EARTH WORKS 0 36.01 EXCAVATIONS 14348 14687.96 340 2.37 36.02(D) ROCK FILL PROCESSING AND 1299 6895.46 5,596 430.83 COMPACTION

36.03 ROAD BED COMPACTION 15084 23971.69 8,888 58.92

37.02 (A) NATURAL GRAVEL 7000 8940.29 1,940 27.72 CLASS G30 81. labour 6,274,000 8,720,641 2,446,641 39.00 Materials

91.03 crushed stone 75 11,928.45 11,853 15804.60 aggregates (ton) 91.04 sand (ton) 40 156.34 116 290.85 91.1 cutback bitumen ltrs 975 27,779.07 26,804 2749.14 Equipment 0 100.08 motor grader(hrs) 200 254.9 55 27.45 100.01 wheeled roller 150 286.75 137 91.17 100.13 self-propelled water 200 207.5 8 3.75 tanker

This was an indicator that proper planning and feasibility studies were not carried out during the design phase of the road leading to increased use of quantities and thus more funds.

This may consequently lead to contract price variations /amendments. More so, there were no instructions and approval of the additional quantities from the contract manager. There is also a risk that these quantities may not be factual as no evidence of approval from the contract manager was found.

The Accounting Officer explained that the contract is an admeasurement contract where during the time of payment, the contractor is paid basing on the actual quantity of work performed. This is the reason for the variances stated above. And all the IPC’s have been approved by the contract manager.

I advised the Accounting Officer to carry out proper preliminary design and feasibility studies in order to minimize variations in quantities.

10.0 Liquidated damages on Hima-Katunguru road project- UGX 1,873,318,398

GCC 49.1 of the contract for the rehabilitation of Hima – Katunguru road project states that; the contractor shall pay liquidated damages to the employer at the rate per day stated in the SCC for each day that the completion date is later than the intended completion date. It was emphasized in the special conditions (SCC, GCC 49.1) that the liquidated damages for the whole of the works are 0.05% per day.

Review of project correspondences of the rehabilitation of Hima Katunguru road by China Railway No 3 Engineering group revealed that the contract expired on 22nd Sept 2019, but the contractor completed the works on 6th Nov 2019 and liquidated damages amounting to UGX 1,873,318,398 as a result of delay in works completion were not charged to the contractor.

Failure to charge the liquidated damages is a loss to Government, and the contractors may not be motivated to work in accordance with contract terms.

The Accounting Officer explained that a letter was written to the Resident Engineer requesting him to invoke clause 8.7 and deduct liquidated damage from IPC19. I advised the Accounting Officer to expedite the recovery of the liquidated damages from the contractors

11.0 Engineering Audit of a selected sample of Road Development, Bridge, Rehabilitation and maintenance Projects implemented during the year

11.1 Background For the financial year 2019/20, a total of 64 projects (Development, rehabilitation and bridge projects) with a total contract sum/value of UGX 12,523,857,730,000 were under implementation by UNRA.

A sample of thirteen (13) projects (development, rehabilitation and bridge projects) with a contract sum/value of UGX 2,988,365,180,000 (representing 23.86% of the projects) were selected for audit. The breakdown of the projects across the different categories is presented in Table 13 below,

Table 13: Engineering projects selected for audit: S/No Contract road name/Contractor Contract Price (UGX,M) Package 1: Masindi(Kisanja)-Park junction, Packwach (Tangi 804,643.23 1 Junction)-Paraa-Buliisa (147km)/ CCCC Package 3: Buhimba-Nalweyo-Bulamagi and Bulumagi-Igayaza- 658,012.95 2 Kakumiro (93 Km)/ China Wu Yi Co. Ltd 3 Bulima- Kabwoya/ China Railway No 5 Engineering Group Co. Ltd 141,941.00 Kyenjojo-Kabwoya/ Shengli Engineering Construction (Group) Co 214,563.00 4 Ltd of Shengli Oilfield 5 Akisim – Moroto/ China Railway No.3 Engineering Group Co. Ltd 248,000.00 6 Mubende-Kakumiro-Kagadi Road/CCCC 484,887.00 7 Masaka-Bukakata/ Arab contractors 165,325.00 8 FortPortal- Hima/ China Wu Yi Co. Ltd 94,838 9 Hima – Katunguru/ China Railway no. 3 83,258 Design and Build of Odroo Bridge on Arua-Biliafe-Otrevu road, 56,113 Ayugi Bridge on Atiak-Adjumani-Moyo-Yumbe-Manibe road, Wariki Bridge on Logiri-Bondo road, Ceri, Adidi and Opio Bridges on Pakele-Pabbo road./ Chongqing International Construction 10 Corporation (CICO) Reconstruction of Washed Out and Failed Bridges in Northern 18,222 Uganda Under Design and Build. Lot 1: Design and Build of Aji 11 and Ora bridges including 9.2km access road/ Terrain Services Ltd Reconstruction of Washed Out and Failed Bridges in Northern 11,682 Uganda Under Design and Build. Lot 2: Design and Build of Enyau 12 Bridge/ Terrain Services Ltd Construction of Multi Cell Box Culvert at Opot along Amuria- 6,880 Obalanga-Abim Road/ Kasese Nail and Wood in JV with Hands 13 Engineering TOTAL 2,988,365.18

Below is a summary of the key findings and observations resulting from the engineering audit. The details of the findings are presented in a separate engineering audit report.

11.2 Inadequate planning

Several projects selected for audit were observed to have been initiated without adequate planning. These translated into major design changes during implementation, multiple extensions of time for some projects, delays in design reviews, variations in quantities during implementation, cost and time extensions. For instance;

 Relocation of facilities were underestimated for Kyenjojo-Kabwoya road project by over 127%  In extensive consultation with Uganda Wildlife Authority (UWA) and National Forestry Authority (NFA) during concept design for Masindi-Park junction-Tangi road project through Murchison falls National Park resulting in reduction of road width in the park section which may result in a potential nugatory expenditure of USD 4,884,766.10  Underestimation of quantities by UGX 16bn (11.95% of the original contract) for Bulima-Kabwoya road project. In addition, for the same project, there was an omission of about 0.8Km of swamp sections of 4m average depth resulting in four times the requirement for swamp treatment.  Underestimation of quantities for Masaka-Bukakata road project due to inadequacies in geotechnical investigations  Absence of detailed design at contract commencement for Hima-Katunguru rehabilitation project

The Accounting Officer responded that consultations are being made with utility companies to estimate relocations prior to issuance of bid documents. She stated that consultations were made with relevant MDAs such as UWA, NEMA and NFA. She further indicated that development of bills of quantities at design stage is being supervised by a Manager quantity surveying before procurement of works contracts to minimize estimation errors. I commend the adopted approach to reduce increases in scope during project implementation due to quantities estimation errors.

I advised the Accounting officer to consult the key stakeholders during concept design and not wait for review recommendations during the ESIA. In addition to adopting measures to ensure adequate planning for the projects to minimize design gaps that would impact on the service life of the infrastructure projects..

11.3 Delays in completion of design reviews

Design review is a key component of construction supervision for which any delay affects implementation of the projects. However, delays were observed for several engineering projects, such as the following;

 For kyenjojo-kabwoya project, a first design review was delayed by 3 months while the final review delayed by 9 months.  For Akisim-Moroto road section, the first review was delayed by 3 months while the final review delayed by 9 months.  For Bulima-Kabwoya project, while the review was scheduled for 6 months, it delayed by over 24 months.  For masaka-Bukakata road project, the design review delayed by over 60 months (5 years) with multiple reviews leading to a net increase in project cost of UGX 16.3bn.  Fort portal-Hima road design drawings were delayed by over a year.

 For Hima-Katunguru project , there was delay in issuance of final design drawings by over 12 months.  For the design and build of lot 3 bridges projects reviewed; the draft and final design that was to be submitted in 12 and 20 weeks respectively, was submitted in 16 and 32 weeks respectively.

I advised the Accounting Officer to consider charging damages for consultants that fail to deliver design reviews on time due to their impact on overall project in respect of completion time and claims for prolongation which could be avoided among others.

11.4 Delays in progress of works

Delays were noted in failure to complete the projects within the contractually stipulated time. The following examples pertain:

 For Bulima-Kabwoya road project that was initially scheduled for 30 months, after 52 months the project has achieved 97% completion.  Masaka-Bukakata road project had a 13.9% physical progress lag.  A delay of over 44 days on Hima Katunguru road project (UGX 660,000,000 delay damages) was noted.

I advised the Accounting Officer to charge liquidated damages for delays beyond the project completion dates. For those projects within project timelines, the progress lags need to be reduced to ensure timely completion.

11.5 Use of lump sum contracts

Several projects were implemented as lump-sum contracts. This was common for all the design and build projects. Clause 35 (1) of the PPDA regulations 2014 states that “a procuring and disposing entity shall use a lump sum contract for buildings and other forms of construction where the works are well defined and are unlikely to change in quantity or specification, and where encountering difficult or unforeseen site conditions, such as hidden foundation problems, is unlikely”.

The Accounting Officer explained that the choice in using Lump sum contracts was due to advantages like minimising risks for the client, reduction in owner supervision, etc.

I advised the Accounting Officer that in extending all the risks to the contractor, Lump sum contracts normally have higher contract prices due to unforeseen conditions that in some cases never arise. This form should be used where there is a clearly defined scope.

11.6 Inclusion of contingency in design and build contracts

Five of the thirteen bridges audited were design and build and had a 10% inclusion as contingency.

The Accounting Officer explained that the contingency was added to the contract to cater for unforeseen events/risks to the Employer as is best practice for civil works projects.

I advised that in design and build method of projects delivery, it is expected that the employer fully understands the project output required and therefore his requirements must be comprehensively defined to achieve those outputs. This means money is locked in the project in anticipation of variations. Therefore there was no need to increase contract sum by 10% contingency as Clause 20.1 of FIDIC yellow book stipulates clearly how risks due to employer are handled.

11.7 Unrealistic rates by Contractors

Clause 5 (1) of the PPDA rules and methods for procurement 2014 requires the accounting officer to use all appropriate sources of information so as to determine the market price of a procurement. Some of the proposed sources are;

 Prices obtained on previous similar bids or contracts, taking into account any difference in the quantities purchased  Prices published or advised by potential providers; and  A build-up of estimates of prices of components of the works,

I noted that Kyenjojo-Kigumba road project had unrealistic rates for several items including accommodation for the engineer, vehicles, concrete works and earthworks, the Lot 3 of design and build bridges project also had unrealistic rates for excavation, concrete pipes, reinforcement and concrete for structures.

The Accounting Officer explained that rates for key cost drivers for the projects are checked at evaluation stage and for unrealistic rates; bidders are requested to provide a cost build-up. The Accounting Officer further indicated that market assessments are also undertaken before arriving at the contract sum.

I advised the Accounting Officer to have comprehensive checks undertaken on bids for contractors during the evaluation process to ensure that unrealistically costed items are examined and addressed early prior to award of contract.

11.8 Unenforceable clauses in works contracts

Review of the different contracts indicated some clauses that were not enforceable despite their usefulness to UNRA. For instance;

 UNRA could not charge damages for delayed handover of priority sections along Kyenjojo-Kabwoya project, Buhimba-Nalweyo project (package 3),  An erroneous clause in the Hima-Katunguru road project lead to UNRA meeting all overheads for the disputes review board invoices including the Contractor’s part contribution. This led to a payment of UGX 18,155,663.91 above the limit.

The Accounting Officer explained that a claim for the delay damages was not enforced due to an undefined completion time for the priority sections. The Accounting Officer also indicated that an attempt had been made to recover the overpayment.

I advised her to check the consistence of contract clauses to eliminate loss of potential damages or unrecoverable overpayments.

11.9 Lack of dispute boards

Two road projects audited namely Akisim-Moroto project (under Defects Liability Period) and Fort Portal-Hima project under construction, did not have fully constituted dispute boards as required i.e. 90 days after commencement. The boards are necessary to resolve timely any disagreements between UNRA and the Contractors that arise during contract implementation.

The Accounting Officer explained that the delays were due to the Contractor’s objection and preferred particular Dispute Boards.

I advised the Accounting Officer to complete the process for constituting Dispute Boards for ongoing projects and always ensure timely appointments.

11.10 Inclusion of unnecessary items in BOQs

Several items were found in project Bills of Quantities that were considered unnecessary for the scope of works under consideration or redundant due to contrary provisions. This was especially noted for laboratory supplies that were not necessary for the project under implementation and requirements to purchase cars for supervision teams while the transport arrangements were already catered for separately. The following refer:

 Laboratory supplies worth USD 34,526.2 on Laboratory equipment for Asphalt Concrete roads while the road under implementation was Double Bituminous Surface Treatment (DBST). This was found on Kyenjojo-Kabwoya road project. 29

 Inclusion of UGX 370,000,000 provisional sum for vehicle purchase for employer’s use yet the supervision team already had a facilitation provision. This was found on the contract for construction of Multi-cell box culvert at Opot along Amuria-Obalanga-Abim road

 Provisional sum of UGX 200,000,000 to provide a vehicle for the employer. This was found on the design and build contract for Enyau bridge.  Provisional sum to provide a vehicle that was not bought under lot 1 (design and build of Aji and Ora bridges).

These sums ultimately led to increased contract sums.

The Accounting officer explained that the laboratory equipment would be useful in establishing a laboratory for UNRA. The accounting officer further added that the vehicles were not bought because the supervision was done by the in-house team which already had transport facilitation.

I advised the Accounting officer to remove items that increase contract sums whose function is already catered for under other items that are more favorable. Besides, a separate procurement could also be considered for the supplies if needed.

11.11 Inadequacies in work programs

I noted that work programs for the projects assessed were either out of date or having gaps in their constitution. They missed the core requirements needed for being operational. The following inadequacies were generally noted among the work programs:  The critical path was not defined in relation to the actual resources.  Work allocation was not consistent with the resources.  Production rates and standard rates of equipment were not included in the work program  The cash flow forecasts presented by the contractor were not linked to the work program.  Quantities of work were not linked to the equipment inventory/productivities. The Accounting Officer explained that repeated communication had been made to the contractor to make good.

I advised the Accounting Officer contractor to enforce this requirement as it is necessary in resolution disputes regarding prolongation costs in case they arise. An updated work program makes the delivery of the contract on time easier.

John F.S. Muwanga AUDITOR GENERAL

KAMPALA

28th December 2020

APPENDICES

Appendix 1

Appendix 2: Showing key outputs and activities and the level of implementation Output Planned Target for the Funds UGX (‘000’) Achieved Variance Causes for the Audit Output Remarks Financial year Target by variances Conclusion Financial year end 0952 Design Masaka-Bukakata road

01 Monitoring and 12 monitoring and Budgeted amount: 225,233 10 2 10 out of 12 Partially Output was partially Capacity Building Support supervision reports External Financing: 0 reports prepared achieved achieved. Revised budget: 225,233 M&S reports had no Reallocations: 0 standard format. Only Payment of PAYE and Amount released: 168,916 1 0 N/A Fully achieved 10 out of 12 reports NSSF to staff Amount spent: 207,021 provided under the Project Implementation Unit

80 National Road 17 km equivalents Budgeted amount: 12.53 4.47 Increased water Partially Output was partially Construction upgraded on 30,323,056 levels, which achieved achieved due to delays /Rehabilitation (Bitumen Masaka-Bukakata road. External Financing: caused flooding in in progress of works. Standard) 70,131,912 some sections Revised budget: 30,278,227 (Lambu Spur and Reallocations: 44,828.940 Bukakata swamp) Amount spent in the Amount released: 14,285,555 and caused delays performance report is Amount spent: 30,951,147 in 30,271,251, different progress of works. from the amount spent as per the BIG reports- 30,951,147.505 Rehabilitation of 5.88Km 0 5.88 Procurement for Not achieved equivalent for Masaka civil works town roads contractor was still ongoing as at close of FY 2019/20 1040 Design Kapchorwa-Suam road (77km) Output Planned Target for the Funds UGX (‘000’) Achieved Variance Causes for the Audit Output Remarks Financial year Target by variances Conclusion Financial year end 80 National Road Upgrade of 19km of the Budgeted amount: 7,150,000 9.05 9.95 Delay in Partially Output was partially Construction/Rehabilitatio road External Financing: acquisition of ROW achieved achieved due to land n (Bitumen Standard) 114,756,904 and heavy rains disputes which affected Revised budget: 6,660,000 the progress of works. Reallocations: 910,000 Amount spent in the Amount released: 3,580,000 performance report is Amount spent: 6,595,306 6,575,742, different from the amount spent as per the BIG reports- 6,595,306.025

1176 Hoima-Wanseko Road (83Km)

01 Monitoring and Salaries of project staff Budgeted amount: 3,070,600 1 0 N/A Fully achieved Output was partially Capacity Building Support paid. External Financing: 0 achieved. Monitoring and Revised budget: 3,070,600 N/A Not able to Not able to assess Not able to supervision of projects. Reallocations: 0 assess since there were assess Amount released: 2,471,950 no clear targets Amount spent: 3,070,428 Procurement of fuel for N/A Not able to Not able to assess Not able to vehicles. assess since there were assess no clear targets

Maintenance of vehicles. N/A Not able to Not able to assess Not able to assess since there were assess no clear targets 48 reports drafted 48 0 N/A Fully achieved

80 National Road Upgrade of 149km of oil Budgeted amount: 117.67 31.33 Delays in payment Partially Output was partially Construction/Rehabilitatio roads 129,300,000 of contractors achieved achieved due to delays n (Bitumen Standard) External Financing: in loan securing which 717,538,112 slowed down the Revised budget: 129,300,000 progress of works Reallocations: 0

Output Planned Target for the Funds UGX (‘000’) Achieved Variance Causes for the Audit Output Remarks Financial year Target by variances Conclusion Financial year end Amount released: 27,300,000 Amount spent: 130,709,976

1278 Kampala-Jinja Expressway

80 National Road Rehabilitation of a Budgeted amount: 9 -3.12 Extra land take Fully achieved Output was fully Construction/Rehabilitatio 5.88km distance 13,350,000 achieved. n (Bitumen Standard) External Financing: 372,534,876 Revised budget: 12,015,000 Reallocations: 1,300,035 Amount released: 10,540,772 Amount spent: 12,024,866

Rehabilitation of 2.14km 2.14 0 N/A Fully achieved road distance and procurement of a civil works contractor

1281 Tirinyi-Pallisa-Kumi/Kamonkoli Road 80 National Road 37 km equivalents on Budgeted amount: 60.10 -23.1 Extra land take Fully achieved Output was fully Construction/Rehabilitatio Tirinyi - Pallisa - 41,800,000 achieved. n (Bitumen Standard) Kumi/ Kamonkoli road External Financing: upgraded. 122,008,504 Reporting on the output Revised budget: 41,700,000 was not consistent. Reallocations: 100,000 Total kms acquired on Amount released: 34,442,788 both sections from Amount spent: 42,124,007 Tirinyi to Kamonkoli are 80km which is not in line with the 60km attained within the financial year under review

Output Planned Target for the Funds UGX (‘000’) Achieved Variance Causes for the Audit Output Remarks Financial year Target by variances Conclusion Financial year end Amount spent in the performance report is 41,700,000, different from the amount spent as per the BIG reports- 42,124,006.916

1313 North Eastern Road-Corridor Asset Management Project

80 National Road 69 km equivalents on Budgeted amount: 3,273,400 0 69 Non-compliance Not achieved Output was not Construction/Rehabilitatio Tororo - Mbale - External Financing: by the contractor implemented. n (Bitumen Standard) Soroti - Dokolo - Lira - 129,196,838 to environment Works on this output Kamdini road Revised budget: 2,946,060 and social were suspended due to Rehabilitated/ Reallocations: 327,340 safeguards that non-compliance by the reconstructed. Amount released: 2,246,060 led to the contractor to Amount spent: 2,972,481.796 suspension of environmental and social works. safeguards 1319 Kampala Flyover 74 Major Bridges 24% of construction Budgeted amount: 0 3.55% 20.45 Delays in Partially Output was partially works for Kampala External Financing: relocation of achieved achieved due to delays flyover completed 99,131,909 utilities in relocation of utilities. Revised budget: 21,252,298 The targets are not Reallocations: 21,252,298 consistent as reported in Amount released: the policy statement and 21,252,297.931 performance reports. Amount spent: 21,235,903 1320 Construction of 66 Selected Bridges 74 Major Bridges 25% construction works Budgeted amount: 32 34 Delays in Partially Output was partially on 66 bridges 72,300,000 procurement achieved achieved External Financing: 0 processes and Amount spent in the

Output Planned Target for the Funds UGX (‘000’) Achieved Variance Causes for the Audit Output Remarks Financial year Target by variances Conclusion Financial year end Revised budget: 67,306,547 covid 19 performance report is Reallocations: 5,297,501 67,306,547, different Amount released: 52,306,526 from the amount spent Amount spent: 67,466,683 as per the BIG reports- 67,466,683 1402 Rwenkunye- Apac- Lira-Acholibur road 80 National Road Advance payment to Budgeted amount: N/A Not able to Procurement of Partially Output was partially Construction/Rehabilitatio contractor for 16,000,000 assess contractor for achieved achieved. n (Bitumen Standard) mobilization paid. External Financing: Migyera-Kafu was Procurement of the civil 100,657,016 called off works contractors had Revised budget: 14,400,000 not been concluded by Reallocations: 1,600,000 the end of the Financial Amount released: 14,400,000 year. Amount spent: 14,637,421 Amount spent in the performance report is 14,400,000, different from the amount spent 3 km-equivalent 0 3 Procurement of Not achieved as per the BIG reports- constructed on the civil works 14,637,421.406 Rwenkunye-Apac-Lira- contractor had not Archolibur road. been concluded by the end of the Financial year.

2.94Km equivalent for 0 2.94 Procurement of Not achieved Migera Kafu the civil works rehabilitated. contractors had not been concluded by the end of the Financial year. 1403 Soroti-Katakwi-Moroto-Lokitonyala road

Output Planned Target for the Funds UGX (‘000’) Achieved Variance Causes for the Audit Output Remarks Financial year Target by variances Conclusion Financial year end 80 National Road 30 km equivalents on Budgeted amount: 19.6 10.4 Procurement of Partially Output was partially Construction/Rehabilitatio Soroti-Katakwi- 137,500,000 civil works achieved achieved. n (Bitumen Standard) Akism - Moroto - External Financing: 0 contractor for Lokitanyala upgraded Revised budget: 123,750,000 moroto - Reallocations: 13,750,000 lokitanyala was Amount released: 99,469,624 still ongoing by Amount spent: 123,631,938 close of FY Amount spent in the 2019/20. performance report is 123,749,999, different from the amount spent as per the BIG reports- 123,631,937.692 1404 Kibuye- Busega- Mpigi 80 National Road 7 km equivalents on Budgeted amount: 0 0 7 Lack of an Not achieved Output was not Construction/Rehabilitatio Busega-Mpigi road External Financing: 208,420 approved design implemented due to lack n (Bitumen Standard) upgraded Revised budget: 400,162 and alignment of an approved design Reallocations: 400,162 and alignment Amount released: 400,162 Amount spent: 400,162

1506 Land Acquisition 04 51 71 Acquisition of 0.4 Hectares of land Budgeted amount: 2.06 -1.66 land debt was Fully achieved Output was partially Land by Government acquired 408,681,655 carried forward achieved. External Financing: 0 from 2018/19 Revised budget: 408,681,655 exceeding the The target was Reallocations: 0 initial target exceeded to 1,721 0.4 Hectares of land Amount released: N/A Not able to This land was Fully achieved hectares of land due to acquired 207,176,507 assess acquired under a majority of land debts Amount spent: 408,720,957 Olwiyo Gulu road. being carried forward from FY 2018/2019 12.14 Hectares of land 0 12.14 Land was not Not achieved acquired acquired due to an Over 80% of the ongoing court case acquired land has no

Output Planned Target for the Funds UGX (‘000’) Achieved Variance Causes for the Audit Output Remarks Financial year Target by variances Conclusion Financial year end 56.66 Hectares of land 160.13 -103.47 The plan had only Fully achieved titles yet due to lengthy acquired considered lot 1 processes involved in land acquisition land subdivision. however, resources were Delays in PAPs doubled to avail payments and land land for lot 2 as disputes affected well which the achievement of the contractor output required. 0.40 Hectares of land 16.02 -15.62 Land debt was Fully achieved acquired brought forward from financial year 2018/19 28.33 Hectares of land 39.16 -10.83 Land debt was Fully achieved acquired brought forward from financial year 2018/19 0.4 Hectares of land N/A Not able to This land was Fully achieved acquired assess acquired under Mpigi Madu Sembabule road project 0.4 Hectares of land 22.65 -22.25 This land Fully achieved acquired represents both Sembabule Vila Mmaria and Mpigi Madu Sembabule; there was land debt carried forward from 2018/19 0.81 Hectares of land 0 0.81 Residual claims on Not achieved acquired this land acquisition were still being compensated

Output Planned Target for the Funds UGX (‘000’) Achieved Variance Causes for the Audit Output Remarks Financial year Target by variances Conclusion Financial year end 40.47 Hectares of land 136.77 -96.3 Previous Fully achieved acquired acquisition was within Kampala where there were a lot of disputes that did not allow for prompt payment; payments within FY 2019/20 were mostly in Mukono where there were less disputes. Projection of land was based on past experience and thus an underestimate. 0.4 Hectares of land 5.79 -5.39 There was extra Fully achieved acquired land take between Km0+000 - Km5+000 3.24 Hectares of land 0.106 3.134 Part of the land Partially acquired intended to be achieved acquired was Electoral Commission and Uganda Police which did not submit required documentation on time.

2.02 Hectares of land 0 2.02 Delay in finalizing Not achieved acquired design delayed start of Land Acquisition

Output Planned Target for the Funds UGX (‘000’) Achieved Variance Causes for the Audit Output Remarks Financial year Target by variances Conclusion Financial year end 0.81 Hectares of land 0 0.81 Detailed design Not achieved acquired not yet ready 242.82 Hectares of land 632.6 -389.78 Land take Fully achieved acquired projected was increased to cater for the additional roads. 60.70 Hectares of land 0 60.7 There were Not achieved acquired administrative delays in both designs and methodology of valuation assessments 20.23 Hectares of land 0 20.23 RAP report not Not achieved acquired implemented 28.33 Hectares of land 51.38 -23.05 There was land Fully achieved acquired debt carried forward from FY 2018/19 48.56 Hectares of land 49.19 -0.63 Land acquired as Fully achieved acquired planned but within minimum variance

0.81 Hectares of land 10.5 -9.69 There was land Fully achieved acquired debt carried forward from FY 2018/19. Additional land was also from supplementary report prepared and implemented during 2019/20 48.56 Hectares of land 0 48.56 RAP report not Not achieved acquired implemented

Output Planned Target for the Funds UGX (‘000’) Achieved Variance Causes for the Audit Output Remarks Financial year Target by variances Conclusion Financial year end 121.41 Hectares of land 0 121.41 RAP report not Not achieved acquired implemented 28.33 Hectares of land 0 28.33 Land not yet Not achieved acquired acquired for this road section. Reported land acquired relates to Busega Mpigi section 40.47 Hectares of land 0 40.47 Land was acquired Not achieved acquired as planned but it is not part of the project codes

0.81 Hectares of land 1.55 -0.74 Project was Fully achieved acquired substantially completed; most payments were covering debt from FY 2018/19

1277 Kampala Northern Bypass Phase 2 04 51 80 National Road 3 km equivalent on Budgeted amount: 2.04 0.96 Reduction in the Partially Output was partially Construction/Rehabilitatio Kampala - Northern 75,000,000 workforce and achieved achieved n (Bitumen Standard) Bypass External Financing: 0 working hours Amount spent in the upgraded. Revised budget: 68,000,000 because of performance report is Reallocations: 7,000,000 encamping due to 68,000,000, different Amount released: 29,282,719 Covid -19 from the amount spent Amount spent: 70,941,155 pandemic. as per the BIG reports- 70,941,155 1042 Design Nyendo - Sembabule (48km)

Appendix 2(i): Mischarge of expenditure-UGX. 288,713,825,335

Project Project Name Diverted Project Name Amount Code to Code Mischarged 265 Atiak-Moyo Road 1402 Rwenkunye - Apac -Lira - 29,670,000 Acholibur road 1555 Fortportal Hima road 6,300,000,000

267 Improvement of Ferry 1510 UNRA Retooling Project 769,162,940 Services RM01 Road maintenance in stations 12,407,107,385

952 Masaka-Bukakata 1040 Kapchorwa-Suam road (77km) 196,139,369 road 1311 Rukungiri-Kihihi- 17,273,100 Ishaka/Kanungu

1035 Mpigi-Kabulassoke 1042 Design Nyendo - Sembabule 6,538,988,043 (135km) (48km) 1176 Hoima-Wanseko (83km) 1,364,503,271 1277 Kampala Northern Bypass 320,591,250 Phase 2 1403 Soroti - Katakwi-Moroto- 87,166,885 Lokiutonyala 1510 UNRA Retooling Project 100,930,872 1536 Upgrading of Kitala-Gerenge 185,635,710 Project RM01 Road maintenance 108,897,303

1040 Design Kapchorwa- 952 Masaka-Bukakata road 734,859,053 Suam road (77km) 1034 Mukono_katosi - Nyenga 239,252,579 (72km) 1276 Mubende Kakumiro-Kagadi 159,041,641 1311 Rukungiri-Kihihi- 75,095,105 Ishaka/Kanungu

1041 Design Kyenjojo- 1312 Mbale-Bubulo-Lwakhakha 27,319,864 Hoima-Masindi- Kigumba (238km) 1551 Fortportal Kyenjojo road 1,060,228,895 1555 Fortportal Hima road 218,865,813

1042 Design Nyendo - 1035 Mpigi-Kabulassoke (135km) 15,627,000 Sembabule (48km) RM01 Road maintenance 35,999,999

1176 Hoima-Wanseko 957 Design the New Nile Bridge at 237,313,782 (83km) Jinja 1180 Kampala Entebbe Express 109,840,959 Highway 1319 Kampala Flyover Project 819,449,375 1446 Masindi-Bugungu via Murchison 31,593,721,521 Falls National Park (80km) 1506 Project Land compensation 24,422,953 RM01 Road maintenance 3,492,398,670

1274 Musita-Lumino-Busia 265 Atiak-Moyo Road 2,348,182,161 (104km) 1275 Olwiyo-Gulu-Kitgum (70.3km) 63,604,164 1276 Mubende Kakumiro-Kagadi 615,814,681 1402 Rwenkunye - Apac -Lira - 772,616,330 Acholibur road RM01 Road maintenance 1,892,051,638

1275 Olwiyo-Gulu-Kitgum 1176 Hoima-Wanseko (83km) 15,039,060 (70.3km) RM01 Road maintenance 2,174,991,153

1276 Mubende Kakumiro- 1506 Project Land compensation 37,037,000 Kagadi 1551 Fortportal Kyenjojo road 842,979,794 RM01 Road maintenance 25,034,036

1277 Kampala Northern 1278 Kampala-Jinja Expressway 998,055,340 Bypass Phase 2

1278 Kampala-Jinja 1176 Hoima-Wanseko (83km) 385,352,993 Expressway RM01 Road maintenance 1,825,883,811

1279 Seeta-Kyaliwajjala- 1275 Olwiyo-Gulu-Kitgum (70.3km) 12,615,982,691 Matugga-Wakiso- Buloba-Nsangi 1276 Mubende Kakumiro-Kagadi 5,384,017,309 RM01 Road maintenance 747,936,694

1280 Najjanankumbi- 1034 Mukono_katosi - Nyenga 5,899,867,000 Busabala Road and (72km) Nambole-Namilyango- Seeta 1176 Hoima-Wanseko (83km) 7,600,133,000 44

1320 Construct Selected 66 Bridges 61,717,000 RM01 Road maintenance 913,572,364

1281 Tirinyi-Pallisa- 1551 Fortportal Kyenjojo road 892,920,000 Kumi/Kamonkoli Road

1311 Upgrading Rukungiri- 1278 Kampala-Jinja Expressway 2,261,025,715 Kihihi- Ishasha/Kanungu Road 1551 Fortportal Kyenjojo road 495,181,760 RM01 Road maintenance 90,360,117

1312 Upgrading Mbale- 1311 Rukungiri-Kihihi- 136,659,750 Bubulo-Lwakhakha Ishaka/Kanungu Road

1313 North Eastern Road- 1276 Mubende Kakumiro-Kagadi 383,662,157 Corridor Asset Management Project 1278 Kampala-Jinja Expressway 175,113,748

1319 Kampala Flyover 1034 Mukono_katosi - Nyenga 1,941,545,149 (72km) 1278 Kampala-Jinja Expressway 5,626,939,772 1311 Rukungiri-Kihihi- 1,210,521,919 Ishaka/Kanungu 1312 Mbale-Bubulo-Lwakhakha 1,722,707,270 1320 Construct Selected 66 Bridges 5,104,169,504 1551 Fortportal Kyenjojo road 602,454,272

1322 Upgrading of 1278 Kampala-Jinja Expressway 17,567,933 Muyembe-Nakapiripirit (92 km) 1403 Soroti - Katakwi-Moroto- 4,676,968,121 Lokiutonyala 1551 Fortportal Kyenjojo road 500,000,000 1555 Fortportal Hima road 3,969,644,362 RM01 Road maintenance 353,387,517

1402 Rwenkunye- Apac- 1278 Kampala-Jinja Expressway 218,282,106 Lira-Acholibur road 1403 Soroti - Katakwi-Moroto- 13,500,000,000 Lokiutonyala 45

RM01 Road maintenance 900,000,000

1403 Soroti-Katakwi- 952 Masaka-Bukakata road 14,395,000 Moroto-Lokitonyala road 1034 Mukono_katosi - Nyenga 5,687,429,181 (72km) 1056 Transport Corridor Project 1,966,805,152 1311 Rukungiri-Kihihi- 4,505,231,137 Ishaka/Kanungu 1551 Fortportal Kyenjojo road 778,641,780 1552 Hoima-Katunguru road 3,546,102,760

1404 Kibuye- Busega- Mpigi 1278 Kampala-Jinja Expressway 309,152,550

1490 Luwero- Butalangu 1552 Hoima-Katunguru road 72,100,896 1555 Fortportal Hima road 536,771,008 RM01 Road maintenance 291,128,096

1503 Karugutu-Ntoroko RM01 Road maintenance 1,260,000,000 Road

1506 Land Acquisition 1278 Kampala-Jinja Expressway 76,240,336

1510 UNRA Retooling 1034 Mukono_katosi - Nyenga 165,904,909 Project (72km) RM01 Road maintenance 14,516,543,153

1536 Upgrading of Kitala- 267 Improvement of Ferry Services 691,305,580 Gerenge Road 1278 Kampala-Jinja Expressway 320,159,307

1537 Upgrading of Kaya-Yei 1275 Olwiyo-Gulu-Kitgum (70.3km) 8,425,266,754 Road 1506 Project Land compensation 1,341,608,465 1551 Fortportal Kyenjojo road 8,212,032,916 RM01 Road maintenance 90,122,265

1538 Development of 1034 Mukono_katosi - Nyenga 4,041,998,602 Nakaseke-Ssingo- (72km) Kituma road 1276 Mubende Kakumiro-Kagadi 2,246,807,088

1553 Ishaka-Rugazi-Katunguru road 2,730,864,310 RM01 Road maintenance 144,685,945

1543 Kihihi-Butogota- 265 Atiak-Moyo Road 16,817,000 Bohoma Road 1040 Kapchorwa-Suam road (77km) 63,382,000 1041 Kigumba – Bulima-Masindi – 71,732,000 Hoima – Kabwoya road (238km) 1176 Hoima-Wanseko (83km) 54,428,530 1274 Musita-Lumino-Busia (104km) 27,707,000 1281 Tirinyi-Pallisa-Kumi/Kamonkoli 58,870,000 1311 Rukungiri-Kihihi- 92,760,000 Ishaka/Kanungu 1312 Mbale-Bubulo-Lwakhakha 28,355,000 1322 Muyembe-Nakapiripirit 38,200,000 1403 Soroti - Katakwi-Moroto- 22,524,005,000 Lokiutonyala 1506 Project Land compensation 150,978,208 1510 UNRA Retooling Project 31,155,000 1553 Ishaka-Rugazi-Katunguru road 30,560,000 RM01 Road maintenance 2,351,330,151

1544 Kisoro-Lake Bunyonyi RM01 Road maintenance 900,000,000 Road

1545 Kisoro-Mgahinga 1277 Kampala Northern Bypass 1,800,000,000 National Park Phase 2 Headquarters Road

1546 Kisoro-Nkuringo- 1040 Kapchorwa-Suam road (77km) 433,134,746 Rubugiri-Muko Road 1277 Kampala Northern Bypass 1,029,270,645 Phase 2 1278 Kampala-Jinja Expressway 123,299,611 RM01 Road maintenance 434,783,355

1547 Kebisoni-Kisizi- 1552 Hoima-Katunguru road 19,746,397,899 Muhanga road 1555 Fortportal Hima road 1,673,000,000 RM01 Road maintenance 1,957,456,884

1548 Nansana-Busunju 952 Masaka-Bukakata road 18,895,000 Section I 1278 Kampala-Jinja Expressway 93,311,575 1549 Nansana-Busunju II 43,830,000

1549 Nansana-Busunju II 1035 Mpigi-Kabulassoke (135km) 466,778,412 1278 Kampala-Jinja Expressway 3,949,598,339 1403 Soroti - Katakwi-Moroto- 1,035,026,436 Lokiutonyala 1490 Luwero- Butalangu 403,692,817 1510 UNRA Retooling Project 100,000,000

1550 Namunsi-Sironko/ 1278 Kampala-Jinja Expressway 1,052,205,410 Muyembe-Kapchorwa Section I 1281 Tirinyi-Pallisa-Kumi/Kamonkoli 2,241,363,614 RM01 Road maintenance 3,981,839,838

1551 Fortportal Kyenjojo 1278 Kampala-Jinja Expressway 204,157,496 road 1403 Soroti - Katakwi-Moroto- 148,359,290 Lokiutonyala 1553 Ishaka-Rugazi-Katunguru road 117,560,085

1553 Ishaka-Rugazi- 1310 Albertine Region Sustainable 28,625,000 Katunguru road Dev't 1403 Soroti - Katakwi-Moroto- 304,489,027 Lokiutonyala RM01 Road maintenance 78,091,473

1554 Nakalama-Tirinyi- 1274 Musita-Lumino-Busia (104km) 1,493,798,576 Mbale road 1510 UNRA Retooling Project 40,189,117 RM01 Road maintenance 34,610,883

TOTAL 288,713,825,335 SUM

Appendix 2(ii): Mischarge and diversion on URF Maintenance Funds

Invoice Description Item code Correct code Payment Distribution Supplier Item code Number charged to be Date Amount charged RM01020080 City tyres partial Maintenance - Maintenance- 23-Jun-20 196,744,068 City Tyres 228001 839 payment of Inv Civil Vehicles CTSCR11854 supply of plant and vehicle tyres RM01020080 City tyres partial Maintenance - Maintenance- 23-Jun-20 35,413,932 City Tyres 228001 839 payment of Inv Civil Vehicles CTSCR11854 supply of plant and vehicle tyres RM01022010 Payment in Cleaning and Allowance 4-Nov-19 170,000 ALOYSIUS 224004 00533 respect of sanitation MUGALU advance for OPTA transferring records of Accounts to Namugongo

RM01092003 Ultimate images Welfare and Advertising and 13-Mar-20 356,949 ULTIMATE 221009 0122 Inv 402 for Entertainment public relations IMAGES photography and video coverage

RM01020060 City Oil Inv Maintenance - Fuel and 23-Jun-20 178,840,677 City Oil 228001 833 CTLC097 Provision Civil lubrications of lubricants

RM01082012 Yawe- 1NOA URF Axle load Ferry services 10-Dec-19 115,000 JOSEPH 45105 00077 1SDA Allowances YAWE for Trouble shooting problem of intermittent power supply for Kyoga 2 Ferry RM01082012 Ssekidde- 10NOA URF Axle load Ferry services 23-Dec-19 1,015,000 RICHARD 45105 00250 1SDA Allows for SSEKIDDE inspection team to undertake seaworthiness for all UNRA Ferries RM01082002 Owokuhisa- 5NOA Ferry services Monitoring and 25-Feb-20 1,025,000 NOEL 45106 00653 1SDA Allows for Capacity OWOKUHIS Central and Building A Eastern region Support civil projects inspection and supervision

RM01082011 Nyanzi- 2NOA URF Axle load GoU finance 15-Nov-19 420,000 RONALD 45105 00453 1SDA Allowance and NYANZI for facilitation for adminsitration UNRA/16/1 peer audits 002 RM01082012 Oloya- 3NOA Ferry services Monitoring and 23-Dec-19 315,000 FRANCIS 45106 00243 1SDA Allows for Capacity OLOYA training of UNRA Building Staff on Support maintenance of crane lifting equipment RM01082060 Tumwebaze- Ferry services GoU finance 23-Jun-20 14,206,922 REUBEN 45106 00319 Payment in and TUMWEBAZ respect of adminsitration E Airticket refund BYARUHAN for 3rd Global GA ministerial conference on Road Safety in Sweden 17th-20th Feb 2020 USD [email protected] RM01072060 14NOA 1SDA URF Axle load Unra support 26-Jun-20 2,825,000 NAMAYANJ 45105 00862 Travel for services A ESSY georeferencing of bottlenecks on Road Network RM01082011 Turyasingura- URF Axle load Unra support 11-Nov-19 400,000 TIMOTHY 45105 00259 2NOA Allows for services TURYASIN survey works at GURA Rwentobo UNRA Road Camp RM01072060 14NOA 1SDA URF Axle load Unra support 26-Jun-20 855,000 PAUL 45105 00865 Travel for services SSETIMBA georeferencing of EUGENE bottlenecks on Road Network RM01082012 Mafabi- 1NOA URF Axle load Ferry services 10-Dec-19 220,000 JOSHUA 45105 00076 1SDA Allowances MAFABI for Trouble shooting problem of intermittent power supply for Kyoga 2 Ferry RM01022004 Adebua- Payment URF Axle load Monitoring and 4-May-20 2,025,000 Adebua 45105 00099 in respect of Capacity Samuel pending allowance Building 761681 for Travel for Support supply, installation, monitoring, maintenance and support of tracking system

North, North East and Eastern FEB 2020 RM01082060 Byaruhanga- ravel Ferry services GoU finance 17-Jun-20 9,206,194 REUBEN 45106 0033 abroad allowances and TUMWEBAZ for 3rd Global adminsitration E Ministerial BYARUHAN Conference on GA Road Safety in Sweden 17th-20th Feb 2020 (Paid USD 2,450@ 3,757.63-Perdiem and inland travel; pending airticket and visa USD 4067 Total 444,153,742

Appendix 3 Nugatory expenditure: Interest on delayed payments

S/No Project /Description /Purpose Amount (UGX)

1 Term maintenance of Iganga Bulopa Kamuli 265,004,832 2 Term maintenance of Kamuli Kaliro 161,596,572 3 Term maintenance of Muyembe Namalu 75,914,907 4 Supply, delivery and commissioning of a landing craft ferry for Sigulu Islands 185,514,734 5 SPENCON JV STIRLING- INTEREST ON DELAYED PAYMENTS - NAMANVE 13,908,448 INDUSTRIAL PARK ACCESS ROADS 6 WHT Spencon - Stirling Joint Venture- Interest on delayed payment(F) $4,095.23@ 15,206,441 3,713.21 7 China Wuyi Interest on Ipc 05-07 Nansana Busunju 18,998,260 8 The Arab Contractors Interest IPC 01L for Lot 1 & Interest IPC 01L for Lot2 -Tirinyi - 33,765,381 Pallisa Kumi kamonkoli code 1281 9 China State Construction Engineering Corporation-Interest on delayed payments in 38,164,697 respect to IPC No.13-Bumbobi-Lwakhakha road 10 Interest on delayed payment of IPC 02-Civil works on Mbarara bypass access road to 43,380,763 Nyakakoni junction 11 SPENCON JV STIRLING- INTEREST ON DELAYED PAYMENTS - NAMANVE 77,269,156 INDUSTRIAL PARK ACCESS ROADS 12 CHINA RAILWAY N0. 5 ENGINEERING GROUP CO. LIMITED-IPC No.21B-Interest on 78,401,352 delayed payment in respect to Bulima-Kabwoya civil works 13 China Wu Yi's Interest IPC 13B USD 22,091.94 & 18B USD 4,039.50 +charges USD 35 96,976,228 @ 3,706.13 Kyenjojo Fort Portal 14 The Arab Contractors Interest IPC 01L for Lot 1 & Interest IPC 01L for Lot2 -Tirinyi - 187,585,449 Pallisa Kumi kamonkoli code 1281 15 China State Construction Engineering Corporation-Interest on delayed payments in 212,026,096 respect to IPC No.13-Bumbobi-Lwakhakha road 16 Interest on delayed payment of IPC 02-Civil works on Mbarara bypass access road to 241,004,238 Nyakakoni junction 17 Spencon - Stirling Joint Venture- Interest on delayed payment(F) $64,158.57 +$35 @ 243,935,573 3,800 18 IPC 13-Interest on delayed payment-USD 62,089.50+USD 35@4000-Civil works on 248,498,000 Bumbobi Lwakhakha 19 ENERGO'S Interest on delayed payment Final payment Certificate Mpigi Kanoni 441,492,090 20 China Communications Construction Co. Domestic arrears IPC 28 balance, interest IPC 458,472,996 23 to 27 and price adjustment IPC 25 to 27 USD 120,615.79 + $ 35 @ 3,800 works on Kampala Expressway 21 China Wu Yi's Interest IPC 13B UGX 306,256,402 & 18B UGX 183,030,044. Kyenjojo 489,286,446 Fort Portal 22 China Wu Yi Interest Certificate 3( 15,465,604 ) and Interest Certificate 2( 632,343,666 616,878,062 ) Fortportal Hima Road 23 Interest cert no5L-Mukono Kayunga Njeru 671,958,371 24 Interest certifiate no5-USD 205,710+USD [email protected] Mukono Kayunga Njeru 772,401,707 25 CCCC Interest 1 USD 232,283.32 + $ 35 @3,800 Kamdin Gulu 882,809,616 26 China Communications Construction Co. Domestic arrears IPC 28 balance, interest IPC 101,997,060 23 to 27 and price adjustment IPC 25 - 27 for works on Kampala Entebbe Expressway 27 The Arab Contractors lot 1 IPCs 11F,12F,13F,14F & Interest 01F and lot 2 IPCs 166,845,192 11F,12F,13F and Interest 01F Total USD 2,323,026.58 Plus bank charges USD35 @ 52

3706.13 - Code 1281 Tirinyi Pallisa Kumi Kamonkoli Road 28 CRN3 Hima Katunguru Forex IPC 12 interest, IPC 12,13,14,15, interest on IPC 12 is 149,221,667 UGX 121,217,815 and USD 7,556.09 29 CHINA WU YI's IPC 19L,20L,21L & 21BL UGX 795,106,549 Civil works Kyenjojo-Fort 54,425,219 Portal road interest on IPC 14 AND 15 30 term maintenance of unpaved roads lot 14, Panyimuri-Erusi-Goli-Paidha (61km), 251,005,143 Paidha-Anyavu(65Km) and Anyavu- Vurra (27Km) Total 7,309,410,300