KAMPALA—The Ministry of Trade, Industry and Cooperatives (MTIC) says it’s decision to renovate Farmers House, a government owned premises saves the taxpayers exorbitant rent charges from private landlords of upto UGX 7 billion per annum.
Speaking to PML Daily on Thursday, Irene Kiiza, a Senior Public Relations Officer, Ministry of Trade, Industry and Cooperatives said the UGX 5 billion
in the 2021/2022 supplementary budget approved for renting of office space were re-purposed for renovation to achieve sufficient premises for the ministry and it’s departments.
“Farmers House, is a government building managed by Uganda Property Holdings and renovating it is far better than renting premises from the private people because it saves government lots of money,” Kiiza said.
She added that renovating Farmers House continues to save the government a whopping UGX.7 billion in rent per annum.
According to documents seen by this website, the Ministry of Trade, Industry and Cooperatives requested for supplementary budget to the Ministry of Finance, Planning, and Economic Development (MoFPED) in the first quarter of FY 2021/2022—citing critical unfunded priorities including revamping cooperatives, improvement of the staff working conditions by securing accommodation at a cost of UGX. 5billions among others.
Whereas the ministry sought to urgently secure accommodation to improve the livelihood and working conditions of the staff, MoFPED made the actual release of the funds at the end of the financial year in April 2022 in the fourth quarter.
This means, no procurement process for accommodation premises could be undertaken in such a short time, the Ministry of Trade said in a defense— reasoning that the development implied that it was constrained by time to carry out all necessary activities required to facilitate the procurement and expenditure of the funds before expiry of the financial year.
“When I looked at the options of renting, especially for the premises that had been shortlisted, they were very expensive. It would have required me to pay Shs7 billion with all my ministries, departments and agencies. At the moment, I pay Shs334 million per annum,” Geraldine Ssali, told a parliamentary committee on trade.
“Having considered the above options, management felt it prudent to renovate the dilapidated Ministry Offices / Farmer’s House owned fully by the Government of Uganda under Uganda Property Holdings Ltd an institution which is under The President’s Office. This was based on the premises that the Ministry was only paying a small and affordable service charge of UGX 11,800,000/= per month to Uganda Property Holdings Limited. It was financially viable for the Ministry to stay in its traditional home since the building has always been the traditional home of the Cooperators in Uganda and still achieve improved working conditions to it’s staff,” she added.
Ssali denies any wrongdoing— maintaining that she did not violate the law in expending the funds since she got clearance from the Ministry of Finance.
“Spending annually UGX 5,083,864,788/= in rent every year, representing an increase of non-wage cost by 127.27% and 2.3 times the cost of the Ministry’s wage bill alone. The increase in rent would not therefore be viable, nor sustainable in the face of budget cuts and rationalisation of government agencies to save public resources,” the ministry says, adding:
“In drawing from the requirement of great skill and competences expected of an Accounting Officer, it would only be a wise decision to renovate as opposed to incur an annual expenditure of UGX 5,083,864,788/= rent every year.”
Documents on record of the Parliamentary committee show that the Attorney General certified the procurement process and cleared the contract for renovation.
“The monies for renovation were not used for the benefit of the public officer or for the benefit of a third party but for the benefit of Government as certified by the Attorney General,” says Ms. Ssali—dissimisng talk that funds were diverted since as there was an administrative request by the Ministry for a virement of funds from Rent to Renovation to the Ministry of Finance, Planning and Economic Development which application was approved by the ministry of finance to support the renovation works.
“The Renovation works and the expenses made thereunder were legally spent and no such cases of diversion of funds would legally rise as the funds were spent as per their intended purpose.
It is also critical to note that the contractor for the renovation issued MTIC with a performance security as required by the contract, issued by Cairo Bank Uganda Ltd.
The contract for renovations was also properly cleared by the Attorney General as required by law.”
“The Accounting Officer properly exercised her great degree of skill, competence and diligence in choosing to renovate as opposed to the expensive annual recurrent rent as expected under Section 45(2) of the Public Finance Management Act 2015.”
“Whereas Section 45(2) of the Public Finance Management Act 2015 requires an Accounting Officer to exercise a great degree of skill and care, it is prudent that the accounting officer should be enabled to exercise a great degree of skill and diligence as opposed to being distressed for an activity wherein she conducted herself with a great degree of skill expected of an Accounting Officer under the law.”
“The Accounting Officer should also be equipped with human resource from the Accountant General’s office that is well equipped with sufficient accounting skills and competencies, in addition to honesty expected of Accountants as professionals to avoid further unnecessary audit queries.”
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