The ministry of Local Government diverted Shs3.5b from projects co-financed with the African Development Bank (AfDB) to clear taxes for cars of district chairpersons, an audit of projects by the Auditor General John Muwanga has revealed.
The monies were diverted from two projects, the Community Agricultural Infrastructure Improvement Programme (CAIIP II) for rehabilitating community access roads in 65 sub-counties in 15 districts in northern and eastern Uganda, and the Markets and Trade Improvement Project (Phase II) for rehabilitating existing dilapidated markets in Kabale, Mbarara, Masaka, Kasese, Arua, Soroti, Busia and Entebbe.
The audit revealed that out of Shs2.9b that was released for CAIIP II, Shs1.4b was diverted to clearing taxes. Another Shs2b was diverted out of the Shs3.6b that was released during the same period for the markets project without approvals from ministry of Finance.
“Such a practice undermines the intentions of the appropriating authority, results into under-performance on the part of the project…,” Mr Muwanga noted in the audit seen by this newspaper.
Mr Muwanga advised the ministry’s top bosses to be compelled to “refund the monies to allow implementation of project activities” within the timelines agreed upon with AfDB.
The ministry’s Permanent Secretary, Mr Ben Kumumanya did not pick or return our calls for comment on the matter.
The audit also revealed low absorption of funds and poor performance on the projects. According to the audit Shs42b was approved as the project expenditure for CAIIP II during the previous financial year 2015/16 of which only Shs37b was released.
Local government authorities defended that the low absorption of funds was mainly due to delays in completion of the last batch of community access roads which formed the bulk of funding under the budget, as a result of heavy rains and difficult terrain.