URC maintains its worst-performing record, fails to explain UGX 47bn loans

Kampala. Uganda Railways Corporation -URC has not only consistently maintained its reputation among the worst performing public bodies in which billions of taxpayers money get lost but has also added unaccounted foreign loans to the losses it inflicts on Ugandans.

A report by the Auditor General has revealed unexplained loans accessed by the URC and domestic arrears all totaling 46.99 billion Shillings.

The report accessed by Uganda Radio Network- URN was presented by Auditor General John Muwanga to the Speaker of Parliament Rebecca Kadaga on Thursday.

URC is a corporate body reporting to the Ministry of Works and Transport under the Uganda Railways Corporation Act (1992). It is mandated with the construction, operation and maintenance of railway and marine services both in and outside Uganda, for the carriage of passengers and goods.

  Out of the 46.99 billion Shillings, Auditor General John Muwanga notes that the Corporation during the financial year 2019/2020 had un-supported loans from foreign Governments amounting to 16.51 billion Shillings.

  He similarly reveals interest payable amounting to 9.51 billion Shillings which was reported by the Corporation as outstanding without the necessary supporting documentation.

  “I further noted that the corporation reported unsupported sundry creditors and other trade receivables of 9.753 billion and 11.21 billion Shillings respectively. I noted shortfalls in Non-Tax Revenue -NTR collections and Government releases of 86 billion Shillings (86% of target) and 45.7 billion Shillings (15% of the target) respectively,” further reads the audit report which qualified the accounts of the Corporation due to several irregularities.

  Auditor General John Muwanga also says that most of the planned outputs of the Corporation in the annual cumulative performance reports were reported in generic form, thus making proper assessment of performance difficult for him.

  “I noted that the Corporation did not assess for impairment of the assets despite the existence of impairment indicators; thus overstating non-current assets and understating expenditure. In addition, the corporation had long outstanding receivables to a tune of 1 billion Shillings relating to withholding Tax (WHT), casting doubt on its recoverability. I also noted unauthorized excess expenditure to a tune of 4.43 billion Shillings over and above the budgeted amount of 3.5billion Shillings,” he adds.

On top of these irregularities, Muwanga also reveals that the Corporation lacked land titles for land worth 91.83 billion Shillings as evidence of URC’s right to own and use the property.

  Muwanga says that the absence of land titles has resulted in individuals and institutions encroaching on the land and unlawfully putting up developments.

The entity also awarded procurements worth 2.08 billion Shillings to suppliers who did not meet the qualification criteria and also incurred excess spending on maintenance of vehicles over two financial years.

According to the audit report, the Corporation has 48 locomotives and only 11 locomotive engines were found in the asset register. Muwanga says that no inventory lists for the locomotives were maintained showing status of operation, engine capacities and location.

He also notes that there were no fuel registers for the locomotives and neither did the corporation maintain logbooks for each vehicle, and locomotive.

In his previous audit report, Muwanga noted URC and other public enterprises as the worst performing and costing taxpayers heavily in losses. He then recommended that these would be better managed under public-private partnerships.

  “There is a need for government to improve on supervision and monitoring of these entities by introducing performance-based contracts with clear targets. In addition, the government could also explore public-private partnerships,” Muwanga then said.

Besides URC, the other enterprises the Auditor General then queries were Uganda Electricity Transmission Company Limited and Civil Aviation Authority (CAA).