: Shs3 Billion Missing As Defence Sells Off UPDF Helicopter

Uganda: Shs3 Billion Missing As Defence Sells Off UPDF Helicopter

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The Monitor (Kampala)

14 August 2008
Posted to the web 14 August 2008

Yasiin Mugerwa

An estimated $1.9 million (about Shs3.06 billion) that could have been obtained from what has been described as a controversial sale of an army helicopter cannot be traced, it emerged yesterday.

At a stormy meeting with officials in the Ministry of Defence, MPs on the Public Accounts Committee (Pac) heard that in June 2002 an army aircraft valued at $1.9 million was boarded off at $1 million (about Shs1.6 billion) through unclear circumstances.

"A detailed analysis of the [aircraft] sale was, however, not provided for audit and I could therefore not ascertain what was sold and what expected proceeds were," the Auditor General's report for the year ended June 2003 reads in part.

Even though there is undisputable evidence that the aircraft was sold off to an unnamed international firm, the MPs , heard that the transaction was never captured in the Ministry of Defence accounts.

Pushed to explain the whereabouts of the $1 million obtained from the sale, the Defence acting permanent secretary, Ms Rosette Byengoma, said; "We sold it at $1 million because it had turned into a scrap and not an aircraft as such and the valuation was done by Swipco."

However, asked to present evidence that the proceeds were taken to the Consolidated fund, Ms Byengoma said the missing $1 million was banked on the Classified Account in the Bank of Uganda. "I request that you give us one week to provide accountability," Ms Byengoma pleaded.

However, Mr Nandala Mafabi (FDC, Budadiri West) who also chairs the committee said; "This is stealing government money. This was no scrap but an aircraft which needed to be boarded off and there was nothing classified as far as this money was concerned."

The committee became even more suspicious after Ms Byangoma explained that after the money was taken to Bank of Uganda, it was later withdrawn and used by the Ministry of Defence to buy classified items. However, she could neither produce authority from Secretary to the Treasury nor the Parliamentary approval to use such funds in question.

But while addressing a news conference after the meeting, Mr Mafabi said officials in the Ministry of Defence have been given one week to either produce a receipt for $1 million from the Accountant General or face disciplinary action on charges amounting to stealing government funds.

"Whoever took this $1 million is going to pay back," Mr Mafabi said. "We cannot accept what these officials are telling us because this was a helicopter valued at about $2 million."

MPs heard that it was further noted that aircraft parts worth Euros 1.5 million were sold to unnamed private company in June 2002. The accounting officer then stated that he [Brig Nobel Mayombo (RIP)] advertised the [aircraft deal] for two years but didn't get a buyer. He then decided to eventually sell it off to the highest bidder.

"It was noted that the proceeds (Euros 1.5 million) were not receipted and banked as revenue, instead they were banked in the foreign exchange account with Bank of Uganda where it was utilised without authority from the Secretary to the Treasury," the AG report adds in part.

In a related development, MPs heard that the Ministry of Defence also entered into a contract with a local company to lease an aircraft to carry out services in Congo. The AG further explained that during one of its flights the aircraft was shot at and damaged. The local company made a claim of $797,700 which was later reduced after negotiations to $638,160.

But according to the AG, noted from the Solicitor General however that the Ministry of Defence breached the contract by not taking out additional insurance when the aircraft was operating in zones of higher danger as required by the contract, and that this could have averted the expenses.

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"Ministry officials didn't participate in the inspection of the damages incurred by the local company, according to the Civil Aviation Authority report, there was no way such aircraft could have been flown to Entebbe in such a state," Mr Mafabi said.

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