The Republic of Uganda

Transcription

1 The Republic of Uganda A VALUE FOR MONEY AUDIT REPORT ON REHABILITATION AND MAINTENANCE OF FEEDER ROADS IN UGANDA: A CASE STUDY OF HOIMA, KUMI, MASINDI, MUKONO AND WAKISO DISTRICTS Prepared by Office of the Auditor General P.O. Box 7083 Kampala FEBRUARY, 2012

2 TABLE OF CONTENTS LIST OF TABLES, FIGURES AND PICTURES... iv LIST OF ABBREVIATIONS... v EXECUTIVE SUMMARY... vi CHAPTER INTRODUCTION Background to the audit Motivation Description of the audit area... 2 CHAPTER AUDIT METHODOLOGY Sampling Data collection methods Data analysis... 8 CHAPTER SYSTEMS AND PROCESS DESCRIPTION ROLES AND RESPONSIBILITIES OF KEY PLAYERS PROCESS DESCRIPTION CHAPTER FINDINGS, CONCLUSIONS AND RECOMMENDATIONS PLANNING AND BUDGETING Use of RAMPS in planning and budgeting Preparation of work plans for rehabilitation and maintenance of feeder roads Use of Annual District Road Work plans in execution of works EXECUTION OF REHABILIATION AND MAINTENANCE WORKS Implementation of road works as per work plan schedules ii

3 4.2.2 Adherence to Procurement laws, regulations and guidelines Availability of essential road equipment Funding of district feeder roads rehabilitation and maintenance works Inspection and supervision of road works Monitoring and Evaluation of rehabilitation and maintenance of road works Appendices I - VII...III iii

4 LIST OF TABLES, FIGURES AND PICTURES Pages Table 1: Funding of feeder roads in the sampled districts 15 Table 2: Ranking of roads in various road conditions 22 Table 3: Roads ranked in various conditions in order of priority interventions 26 Table 4: Roads rehabilitated/maintained without RAMP recommendations 27 Table 5: Roads rehabilitated/maintained without RAMP recommendations 28 Table 6: District compliance levels with RAMP recommendations 29 Table 7 (a): Average District Project delays 37 Table 7 (b): District delays (days) in the procurement process 38 Table 8: Amount spent on delayed road projects 39 Table 9: District Procurement Compliance levels 42 Table 10: District equipment inventory levels and status 46 Table 11: Releases to Regional Mechanical Workshops by URF and MoW&T 47 Table 12: District feeder road budgets, releases, expenditure and absorption rates 50 Table 13: District and departmental average delays in receipt of funds 51 Table 14: Planned and actual quarterly M & E visits conducted 57 Table 15: District actual expenditure on M & E activities 58 Picture.1: On-going rehabilitation works on Mukongoro-Kamacha-Bukedea Road, Kumi District 36 Pictures.2 & 3: Old and abandoned culverts at Mukura-Ngora road in Kumi district 37 Pictures 4 & 5: Old and grounded equipment in Mukono district 46 Picture.6: Unsatisfactory road works 55 iv

5 LIST OF ABBREVIATIONS AFOSAI E CAO DE DP IPFs INTOSAI MOFPED MOLG MoLG MoW&T OAG PRDP PS RAMPS UGX UNRA URF African Organization of Supreme Audit Institutions (English Speaking) Chief Administrative Officer District Engineer District Planner Indicative Planning Figures International Organization of Supreme Audit Institutions Ministry of Finance Planning and Economic Development Ministry of Local Government Ministry of Local Governments Ministry of Works and Transport Office of the Auditor General Peace Recovery and Development Plan Permanent Secretary Rehabilitation and Maintenance Planning System Ugandan Shilling Currency Uganda National Roads Authority Uganda Road Fund v

6 EXECUTIVE SUMMARY Background The Ministry of Local Government is charged with the responsibility of providing strategic management and oversight functions to district authorities, such as: policy formulation, regulation, planning and monitoring of district performance in many government programmes, such as: area of the maintenance and rehabilitation of feeder roads. District authorities are responsible for the maintenance and rehabilitation of feeder roads in their respective geographical locations. A total of Shs.18.8 billion was spent on the maintenance and rehabilitation of feeder roads in the five (5) districts selected for the study for four the financial years covering the period from 2007/2008 to 2010/2011. Despite substantial investment by the Government, the status of the feeder roads in the districts remained undesirable. Many roads have potholes, overgrown grass on road shoulders, broken culverts and clogged drainage systems. It is against this background that the Office of the Auditor General decided to conduct a Value for Money audit to ascertain the challenges facing the management of feeder roads and to analyze their underlying causes; and finally, to make recommendations to address them. Audit Scope The audit focused on the aspects of whether the rehabilitation and maintenance of feeder roads by district authorities in Uganda were adequately planned and budgeted for, implemented timely and satisfactory quality of works attained in the four financial years from 2007/2008 to 2010/2011. A case study was conducted in five district authorities, namely: Hoima, Masindi, Kumi, Mukono and Wakiso. vi

7 Key Audit Findings The following audit findings were noted:- Use of RAMPS in Planning and Budgeting It was observed that, 65% (13 roads) of the twenty roads selected in the five districts visited under the case study had RAMPs recommendations made. Out of the 13 roads with RAMPS recommendations made, only 62% (8 roads) had the recommendations adhered to. Non preparation of RAMP and non adherence to RAMP recommendations during rehabilitation and maintenance of some roads, led to non-scientific cost estimates being used in the planning process. Implementation of Road works as per Work plan Schedules It was established that only 3 (15%) roads in the districts of Hoima, Mukono and Wakiso out of the 20 selected roads from the five districts were completed as per work plan schedule. Seventeen (85%) roads were not maintained as per work plan schedules. As a result of the delayed road works, the public did not receive the intended benefits in time despite government (districts) spending a total of shs.3,168,711,204 on projects Adherence to Procurement Laws, Regulations and Guidelines A sample of 20 roads selected in the five districts was subjected to assessment criteria to test if all the procurement procedures were followed in the procurement cycle. It was noted that out of an average of 84 procurement procedures, only 49 were complied with, resulting in an average district compliance level of only 58% in all the districts visited. Non-compliance with procurement procedures delayed the procurement process, which, subsequently, affected the timely implementation of road works. Availability of Essential Road Equipment It was established that none of the five districts visited had a full set of essential road equipment as required. The district inventory of the road equipment ranged between 33% (5 out of 15) for Hoima district to 87% (13 out of 15) for Masindi and Mukono districts. The failure by government to allocate the requisite number of road equipment to districts, coupled with constant equipment breakdown denied districts the minimum capacity required to rehabilitate and maintain their planned feeder road works using the relatively cheap option of force on account as compared to outsourcing. vii

8 Monitoring and Evaluation of Rehabilitation and Maintenance of Road works It was established that all the five districts visited did not have M&E work plans showing scheduled M&E visits to be carried out and, consequently, quarterly M&E visits pertaining to rehabilitation and maintenance of feeder roads were not conducted as expected. Only 21 out of 80 (26%) of expected reports for technical monitoring and 7 out of 80 (9%) expected reports for political monitoring teams were availed to audit. The quality of the road works executed were neither monitored nor evaluated as expected and, as a result, no immediate corrective actions were taken, thus affecting the attainment of satisfactory works. Key Recommendations: Use of RAMPS in Planning and Budgeting In order to attain proper planning, which is in accordance with District Road Works Planning Manuals, districts, in conjunction with URF and MoW&T, should encourage continuous use of scientific methods to determine the cost of rehabilitation and maintenance of feeder roads. The District Engineers (Des) who lack knowledge and skills in the use of scientific methods of determining rehabilitation and maintenance costs should be trained. Implementation of Road works as per Work plan Schedules The implementation of rehabilitation and maintenance of feeder roads activities should be according to work plan schedules so as to ensure timely delivery of intended services. Uganda Road Fund (U.R.F) together with the Ministry of Finance, Planning and Economic Development (MoFPED) should ensure that funds for rehabilitation and maintenance of feeder roads are released in time to enable districts to execute their road works in accordance with their work plan schedules. Adherence to Procurement Laws, Regulations and Guidelines Districts should fully comply with all the provisions in the Public Procurement and Disposal of Pubic Assets Authority (PPDA) Act, local government regulations and guidelines to ensure proper identification, planning, budgeting and execution of rehabilitation and maintenance activities in an economic and efficient manner. viii

9 District Procurement and Disposal Units (PDUs) should give proper procurement guidance in accordance with PPDA Act to district engineering departments on matters concerning procurement of road contractors. Availability of Essential Road Equipment Government should prioritize the allocation of a full set of road equipment to districts, which will enable them to carry out their planned rehabilitation and maintenance activities. District engineering departments should always conduct timely repair assessment reviews of their road equipment and communicate their repair needs to regional mechanical workshops in a timely manner. Monitoring and Evaluation of Rehabilitation and Maintenance of Road works Districts should ensure that M&E activities are planned, budgeted for and implemented as per work plan schedules. District engineering departments should ensure that the recommendations made by M&E teams are implemented and follow-ups made to attain satisfactory road works. ix

10 CHAPTER INTRODUCTION 1.1 Background to the Audit The Ministry of Local Government is charged with the responsibility of providing strategic management and oversight functions to district authorities, such as: policy formulation, regulation, planning and monitoring of district performance in many government programmes, such as: the maintenance and rehabilitation of feeder roads. District authorities are responsible for the maintenance and rehabilitation of feeder roads in their respective geographical locations. In executing the above responsibilities districts are facilitated mainly through Central Government Grants and various programmes set up by Government through which funds are channelled to rehabilitate and maintain roads. These programmes include: Poverty Alleviation Funds (PAF), which was later substituted for the Uganda Road Fund (URF) in the financial year 2009/2010; Local Government Development Programme (LGDP), which was also later substituted for the Local Government Management Support Development Programme (LGMSD); Peace Recovery and Development Plan (PRDP); Equalization grants and development partners (donors) such as: Danish International development agency (DANIDA) 1.2 Motivation The Government of Uganda has identified rural feeder roads as an area with a great potential for eradicating rural mass poverty 1. The feeder roads network is presently estimated to comprise 22,500 km of mainly unpaved roads 2. Over 60% of the road network in Uganda is extremely bad, rendering some of it impassable. This affects the transportation of goods and services to markets 3. A total of shs.18.8 billion was spent on the maintenance and rehabilitation of feeder roads in the five (5) districts selected for the study for the four financial years covering the period from 2007/2008 to 2010/2011. Despite substantial investment by the Government, the status of the feeder roads in the districts remained undesirable Uganda Road Fund Performance statement on road maintenance plan and expenditure programme (Page 54) 3 Document sans-titre- State of District Feeder Roads in Uganda 1

11 Many roads have potholes, overgrown grass on road shoulders, broken culverts and poor drainage. The attainment of development initiatives, such as: Millennium Development Goals (MDG) of ending poverty and hunger, universal education for all by 2015, gender equality, child health, maternal health, combating HIV/AIDS and environmental sustainability; without a proper feeder road network in local authorities remains hampered. It is against this background that the Office of the Auditor General decided to conduct a Value for Money audit to ascertain the challenges facing the management feeder roads and to analyze their underlying causes; and, finally, to make recommendations to address them. 1.3 DESCRIPTION OF THE AUDIT AREA Mandate The mandate of Local Governments in Uganda is derived from Chapter Eleven (Local Governments) of the Constitution of Uganda (1995) which provides the principles and structures of local governments, their finances, human functions and general administrative functions. This mandate is further amplified in the Local Government Act Cap 243 (LGA, 2007) Section 30 which gives the functions, powers and services of a district to plan and administer service delivery to the citizens. On the other hand, the Ministry of Local Governments (MoLG) is mandated by the Local Government Act Cap 243 (LGA, 2007) Sections to carry out a number of responsibilities as follows:- To inspect, monitor, and where necessary offer technical advice/assistance, support supervision and training to all Local Governments. To coordinate and advise Local Governments for purposes of harmonization and advocacy. To act as a Liaison/Linkage Ministry with respect to other Central Government Ministries and Departments, Parastatals, Private Sector, Regional and International Organizations. 2

12 To research, analyze, develop and formulate national policies on all taxes, fees, levies, rates for Local Governments. Line ministries and other state organs and in this particular case, Ministry of Works and Transport and URF, are also mandated under section 98 of the Local Government Act Cap 243 (LGA, 2007) to inspect and monitor local governments Vision The Vision of the Ministry of Local Government is To have a democratic, participatory, decentralized local government system that can sustain development and deliver services efficiently and effectively to the people Mission The Mission of the Ministry of Local Government is To coordinate, support and advocate for Local Governments for sustainable, efficient and effective service delivery in the decentralized system of governance Objectives/Functions Ministry of Local Government: The Objectives of the Ministry of Local Government are to: Ensure that local governments deliver services to the population in an efficient and effective manner; Ensure compliance with statutory requirements, national standards and policies by local governments; Build the capacity of local government councils, necessary for efficient and effective service delivery. Districts: The detailed functions of the district authorities are specified in the second schedule, part 1 of the Local Government Act Cap 243 (LGA, 2007), which include the provision of services in areas, such as: Medical & Health, Education, Water and Roads. On the provision of the road services, which is the subject matter of this audit, section 4 of the schedule specifically provides that the construction, rehabilitation and 3

13 maintenance of roads, which are not under Central Government, is a responsibility of Local Governments (Districts) Funding The funding of the district feeder roads activities is mainly through Central Government Grants and from various programmes set up to rehabilitate and maintain feeder roads. These include: Poverty Alleviation Funds (PAF), which was substituted for the Uganda Road Fund (URF) in the FY 2008/2009, the Local Government Development Programme (LGDP), which was also substituted for the Local Government Management Support Development Programme (LGMSD) in FY 2009/10, Peace Recovery and Development Plan (PRDP), Equalization grants and development partners such as Danish International Development Agency (DANIDA). Table 1: Showing funding of feeder roads to the sampled districts, for the years 2007/2008 to 2010/2011 DITRICT AMOUNT (SHS) 2007/ / / /11 TOTAL Hoima 510,431, ,218,077 1,173,793, ,388,997 2,688,832,160 Kumi 485,703,697 1,584,826,390 1,107,791, ,894,148 3,973,216,191 Masindi 406,760, ,481,568 1,729,244, ,613,548 3,425,100,102 Mukono 509,630, ,883,521 1,482,552, ,711,886 3,161,778,586 Wakiso 1,039,786, ,557,932 1,288,530,875 2,457,916,533 5,585,791,750 TOTAL 2,952,312,463 3,736,967,488 6,781,913,726 5,363,525,112 18,834,718,789 Source: Audited accounts for respective districts for the years 2007/2008 to 2010/2011 The funding for the district/feeder roads rehabilitation and maintenance in the selected districts increased by 55% from UGX 2.95 billion in FY 2007/2008 to UGX 5.36 billion in the FY 2010/2011 as reflected in the above table. 4

14 1.3.6 Organization Structure MoLG The ministry of Local Government is responsible for the inspection, monitoring and coordination of all activities in district authorities as laid out in part IX of the Local Government Act Politically, the MoLG is headed by a Cabinet Minister, assisted by one (1) Minister of State. The Permanent Secretary (PS) is the overall technical supervisor and accounting officer of the Ministry. Below the PS are two (2) Directors namely: the Director of Local Governments Administration and the Director Local Government Inspection. Districts Politically, Local Council Five (LC 5) Chairpersons are the heads of the Districts assisted by Secretaries of Standing Committees of the District Council (DC). Technically the Chief Administrative Officer (CAO) is the Chief Executive Officer (CEO) of the District assisted by the Deputy CAO. There are various heads of departments including: head of works and technical services, head of natural resources, head of finance, head of production and head of education. The works and technical services department is the one responsible for rehabilitation and maintenance of feeder roads. Details are shown in Appendix I 1.4 Audit Objectives The overall audit objective of the study was to assess whether district authorities in Uganda rehabilitated and maintained feeder roads economically, efficiently and effectively. The specific objectives of the audit were:- I. To assess whether districts adequately planned and budgeted for feeder roads rehabilitation and maintenance activities. II. To assess whether planned activities were implemented on time. III. To assess whether works for rehabilitation and maintenance of feeder roads were inspected and supervised. IV. To assess whether works for rehabilitation and maintenance of feeder roads were monitored and evaluated. 5

15 1.5 Audit Scope The audit focused on the aspects of whether rehabilitation and maintenance of feeder roads by district authorities in Uganda were adequately planned and budgeted for, implemented timely and satisfactory quality of works attained for four financial years from 2007/2008 to 2010/2011. A case study was conducted in five district authorities namely; Hoima, Masindi, Kumi, Mukono and Wakiso. 6

16 CHAPTER AUDIT METHODOLOGY The audit was conducted in accordance with the International Organization of Supreme Audit Institutions (INTOSAI) performance auditing standards and guidelines as set out in the VFM audit manual of the Office of the Auditor General. Those standards require that the audit should be planned in a manner which ensures that an audit of high quality is carried out in an economic, efficient and effective way and in a timely manner. 2.1 Sampling The selection was based on levels of funding as per U.R.F releases to districts and high risks as laid out in the previous annual report of the Auditor General for the years under review. Four (4) highly funded roads on rehabilitation and maintenance were selected from each district. For the years 2007/2008 to 2010/2011, documentary reviews were made to ascertain whether the rehabilitation and maintenance works were executed as planned. Physical inspection was conducted on selected roads that had been rehabilitated and maintained in the FY 2010/2011 to ascertain their status. 2.2 Data Collection Methods Various methods were used for collecting data from the field and these included: document review, interviews and physical inspections. Interviews Officials from the MoLG namely: the Director of Local government inspection, the Commissioner, Urban inspection and the Commissioner, district inspection. At the district level, the CAO, DE, District Planners, CFOs and Heads of PDUs were interviewed during the audit with the a view of assessing how districts plan, execute and control the quality of feeder roads rehabilitation and maintenance works. Documentary Review Various documents were reviewed in respect of feeder roads covering aspects of rehabilitation and maintenance as per Appendix II 7

17 Physical Inspection Field visits were carried out in five sampled districts from which one road in the most current FY (FY 2010/11) in each district was randomly selected with the aim of acquainting ourselves with the status of feeder roads as well as to appreciate the challenges affecting the execution of road works. The visits were also intended to gather more information so as to substantiate the data obtained from interview and documentary reviews and to observe execution on the ground. 2.3 Data Analysis The team analyzed work plans, budgets, procurement documents, supervision and inspection reports and monitoring and evaluation reports. Actual commitments for the roads activities were analyzed to assess the trend of road rehabilitation & maintenance. Expenditure on the different roads in the districts was also analyzed with a view of understanding the frequency of rehabilitation and maintenance on individual roads. The availability and condition of the road equipment at the districts was also analyzed. 8

18 CHAPTER SYSTEMS AND PROCESS DESCRIPTION 3.1 ROLES AND RESPONSIBILITIES OF KEY PLAYERS Ministry of Local Government (MoLG) The Ministry is mandated to carry out the following responsibilities in line with district/feeder roads maintenance and rehabilitation as specified in the Local Government Act, Cap 243:- To inspect, monitor, and where necessary offer technical advice/assistance, support supervision and training to all Local Governments. To act as liaison/linkage ministry with respect to other Central Government ministries and departments, parastatals, private sector, regional and international organizations. Chief Administrative Officer (C.A.O) The C.A.O carries out a number of responsibilities as follows: Is the Accounting Officer of the district Preparation of annual work plan for the department as the chairperson of the technical committee Responsible for road maintenance and rehabilitation Expend all monies for road maintenance and rehabilitation as and when available Report on quarterly basis to the line ministry and other funders as required Account, monitor and ensure value for money District Engineer The District Engineer carries out a number of responsibilities as follows: Carry out annual inventory of district roads Budget for interventions as spelt out in road inventory Prepare terms of reference i.e. getting Bills of Quantities (B.O.Q) and drawings Submit B.O.Qs and designs to the Procurement and Disposal Unit (PDU) for Bidding process Evaluate bids in the Evaluations committee as a technical member Contract supervision including certification of work done 9

19 Prepares interim and final payment certificates, defects liability and environment restoration certificates Commissioning completed projects Maintenance of infrastructure put in place to save the investment District Planner The District planner carries out a number of responsibilities as follows: Integrates departmental work plans into the overall district annual work plan Links departmental budgets and work plans with the overall district budget Monitors budget performance Chief Finance Officer The C.F.O carries out a number of responsibilities as follows: Preparation of district budgets Payment of funds Maintenance of contracts/commitments register Head of Procurement and Disposal Unit Prepares district procurement plans Prepares contract documents Is secretary to the contracts committee 3.2 PROCESS DESCRIPTION Planning and Budgeting Planning A three year development plan is drawn by the planning unit of every district authority covering all sectors where sector heads, including District Engineer, submit their proposals annually. Anticipated revenues and expenditures should be developed in line with the Local Government objectives, amongst which are the maintenance and rehabilitation of the district/feeder roads. Development plans for all districts are integrated into the MoLG budget which is in turn submitted to the MoFPED for financing. To come up with the annual proposals, a situation analysis on the road inventory of feeder roads is conducted by the engineering department annually to assess the condition of the road structures (bridges, culverts and their head walls), road surface, 10

20 shoulders and drainages. Findings are fed into software known as the Rehabilitation and Maintenance Planning System (RAMPS) issued by the Ministry of Works (M.o.W). The System has road codes and all cost variables for maintenance and rehabilitation of a road. Assessment is automatically made and roads are ranked in priority intervention as shown in Table No.2 below. Table 2: Table showing how roads are ranked in various conditions and in the order of priority interventions Rank Condition Priority Intervention 1 Good Routine maintenance 2 Fair Periodic maintenance 3 Bad Rehabilitation 4 Worse Construction Source: RAMPS Manual The system further computes the estimated costs to be incurred on every road condition. The recommendations of the system are compared to the issued Indicative Planning Figures (I.P.Fs) by MOFPED upon which the annual district road workplan is derived depending on the available funds. Beginning with the FY 2010/11, the use of RAMPS was replaced with programming tables. District engineers conduct physical surveys and according to their experience and judgment determine the cost of interventions on the rehabilitation and maintenance of roads. Budgeting A regional budget framework workshop is conducted in the month of December and in that workshop, the MOFPED issues Indicative Planning Figures (IPFs) to each district indicating the funds the central government is to release to it in the following financial year. The Finance,planning and administration departments of district authorities draft a budget call circular to be issued to each sector head instructing them to revise and tailor their work plans to the IPFs given. Focus is put on the IPFs together with the assessment report of the engineering department when drawing the budget to ascertain what should be given priority. 11

21 The budget framework paper is prepared by the Technical Planning Committee in January and a copy submitted to the Ministry of Finance, Planning & Economic Development. In April, a detailed budget is prepared and presented to council for approval by 15 th June of every financial year by district budget desk and secretary finance committee respectively. Funding Feeder Roads Rehabilitation and Maintenance Activities The approved budget is submitted to the MOFPED Funding to districts for feeder roads for rehabilitation and maintenance is channelled through the URF, the Peace Recovery Development Programme (PRDP) and the Local Government Management Service Delivery Programme (LGMSDP) on a quarterly basis after signing a performance agreement with URF. These are supplemented by funds raised through local revenues and grants from development partners/donors. Distribution of district road funds to district authorities is determined using the formula 4 below: A=U+P+S Where: A=Allocation to district X U=Uniform allocation =20% of Total allocation available/number of districts P=Population allocation = 60% of Total allocation available (District Population/National population) S=Surface area allocation = 20% of Total allocation available (District surface area/national surface area) Upon receipt of the funds, the engineering department distributes the funds in the various categories of routine and periodic maintenance and rehabilitation of feeder roads as per approved Annual District Road WorkPlan (ADRWP). 4 Annual Uganda Road Fund Performance statement 2010/2011 page 48 and

22 At the end of every quarter, the district engineer is required to submit a report on the works executed, which serves as a yardstick for subsequent funding. Procurement After approving the annual budget, a detailed survey is carried out by the engineering department to prepare B.O.Qs which form part of the bidding documents. The engineering department submits to the P.D.U a requisition form and statement of requirements which details all the interventions to be executed as shown in the procurement cycle in Appendix III. The procurement of contractors for the maintenance and rehabilitation of feeder roads is done by the District Contracts Committee in line with the Public Procurement and Disposal of Public Assets Act, (PPDA) 2003 which regulates the procurement and disposal of public assets. The Local Governments Public Procurement and Disposal of Public Assets Guidelines and regulations, 2008 further amplifies the above Act. Execution of Works The planned interventions of routine maintenance, periodic maintenance and rehabilitation are executed by the successful bidder. The Procurement Disposal Unit (PDU) in the district is required to maintain contract documents for each feeder road worked upon detailing payment, progress of works, certificates of works issued, negotiations, awards, variations and agreements. The contractor submits a request for payment for the works completed to the engineer who evaluates the work done by the contractor and when found satisfactory, he/she issues an engineer s certificate on works completed. Payments to a contractor are computed net of retention and other statutory deduction, such as: withholding tax and advance recoveries, if any. The road remains in the care of the contractor till the expiry of the defects liability period as stipulated in the contract terms and conditions. Retention fees are paid back to the contractor and the road handed over to the district for commissioning in case of rehabilitation. After commissioning, the districts are expected to maintain the roads. Sometimes districts with road equipment units comprising: Motor grader, wheel loader, Pick Up, Tracks-cavator (Truck loader), tractor, dump truck, concrete mixer 13

23 can directly carry out maintenance and rehabilitation of feeder roads under force account. Inspection and Supervision of Road Works The engineering department inspects and supervises the contractors during the execution of works and makes quarterly progress reports and road status reports to the works committee of the district, sector ministries, URF and other development partners, in cases where donor funds were used. These serve as a condition to access subsequent funding from the MoFPED and donors. Monitoring and Evaluation Monitoring and Evaluation (M&E) is done by both technical staff and political heads. The technical staff conduct M&E activities in the district on a quarterly basis and it is referred to as Multi sectoral monitoring, which is conducted by various Heads of departments on all district sectors, including works. The political M&E exercise is conducted on a quarterly basis by the district chairperson and councillors who are guided by the district engineer as a technical person. Reports are prepared by the district planner, in case of a technical M & E, and by the Secretary to the technical services committee, in case of a political M & E. The reports are discussed in the District Council and recommendations made to the engineering department for implementation. 14

24 CHAPTER FINDINGS, CONCLUSIONS AND RECOMMENDATIONS 4.1 PLANNING AND BUDGETING Use of RAMPS in Planning and Budgeting According to the District Road Works Planning Manual Vol.1, the planning and budgeting of the rehabilitation and maintenance of Feeder roads in the districts should be triggered by a situation analysis on the road inventory conducted by the engineering departments annually to assess the condition of the roads structures (bridges, culverts and their head walls), road surface, shoulders and drainages per 100 meters of every road under survey. The findings of the situation analysis are fed into software known as Rehabilitation and Maintenance Planning System (RAMPS) issued by the Ministry of Works (MoW). The System has road codes and cost variables for maintenance and rehabilitation of roads. Assessment is automatically made and roads ranked in priority intervention as indicated in the table below. Table 3: Table showing how roads are ranked in various conditions in order of priority interventions Rank Condition Priority Intervention 1 Good Routine maintenance 2 Fair Periodic maintenance 3 Bad Rehabilitation 4 Worse Construction Source: RAMPS Manual The system further computes estimated costs to be incurred on every road condition. The recommendations of the system on works interventions and costs are used in the Evaluation, Prioritization and Selection of the district road works to be undertaken in a given Financial Year. It was observed that, 65% (13 roads) of the twenty roads selected in the five districts visited under the case study had RAMPs recommendations made. Out of the 13 roads with RAMPS recommendations made, only 62% (8 roads) had the recommendations implemented. Although one Road in Mukono district (Bugereka Nakyeke Kasawo) had RAMP recommendations made, it was not rehabilitated due to lack of funds in 15

25 the FY 2007/08. Four roads were rehabilitated and maintained at a cost of Shs 513,372,056 without adhering to RAMPS recommendations as indicated below: Table.4: Showing Roads rehabilitated/maintained without adhering to RAMP recommendations S/N ROAD NAME DISTRICT AMOUNT (SHS) RAMPS RECOMMENDATION 1 Muteme -Mukabara Hoima 65,550,000 Periodic maintenance of 10 Kms at a cost of Shs.44.9 Million 2 Bulima - Byebega Masindi 152,502,006 Rehabilitation of 17.7 Kms. 3 Kigumba - Masindi 50,000, Kms of periodic Apodorwa -Mboira maintenance at a cost of Shs.75 Million. 4 Ibaralibi - Masindi 245,320,050 Rehabilitation of Alimugonza 24.3Kms at a cost of Shs.240 Million. ACTUAL WORK PLAN Rehabilitation works at a cost of Shs.65.5 Million Rehabilitation of Only 15.5 Kms Machine rehabilitation at a cost of Shs.50 Million Periodic maintenance at a cost of Shs.250 Million Total 513,372,056 Source: Annual District Road Work plans and Contract documents 35% (7 roads) of the roads visited, which were rehabilitated and maintained at a cost of Ushs.1,083,740,323 had no RAMPS recommendations made. Most cases were noted in the financial year 2010/2011 when the districts abandoned the use of RAMPS, save for Kumi district, and adopted programming tables on the recommendation of the Uganda Road Fund (URF) as indicated in Table No.5. No explanation was given by the affected districts for not making RAMPS recommendations prior to the FY 2010/

26 Table.5: Showing Roads rehabilitated/maintained without RAMP recommendations S/N DISTRICT ROAD NAME COST OF REHABILITATION/ MAINTENANCE (SHS) FINANCIAL YEAR 1 Mukono Kigorobya Sseta -Sezibwa 276,000, /11 2 Mukono Wagala -Najjembe 399,834, /10 3 Hoima Kigorobya Icukira Kitoba (12Kms) 55,200, /11 4 Hoima Kitooba - Kyabasengye 193,515, /09 5 Hoima Kyabesengya-Kaboijana 43,125, /10 6 Masindi Kitamba Kijunjubwa (22.2Kms) 200,000, /11 7 Wakiso Nsangi Buloba(4.70KM) 315,900, /11 Buloba Kakiri (13.90KM) TOTAL 1,483,574,573 Source: Annual District Road Work plans and Contract documents It was also noted that the recommendations of programming tables did not include operational costs such as fuel and allowances for inspection, supervision and M & E, but only included direct charges related to interventions. As a result, the budgeted rehabilitation and maintenance costs did not match with those recommended by the programming tables. Management explained that URF was not funding operational costs and they could not therefore include it in the programming tables. Kumi district had the highest level of compliance with RAMP recommendations, whereby all the four selected roads in the district utilized RAMP recommendations followed by Wakiso district. This was attributed to the high staffing levels in the engineering departments of the two districts. Hoima district did not fully comply with the RAMP recommendations. Out of the four selected roads in the district, only one had RAMP recommendations, which were not utilized. The details of district compliance levels are shown in the Table No.6. 17

27 Table.6: Showing district compliance levels with RAMP recommendations. District Roads RAMPS Recommendations No RAMPS planned Recommendations adhered to recommendations made Number Percentage Number Percentage Number Percentage of of of Roads Roads Roads Mukono % 1 50% 2 50% Hoima % 0 0% 3 75% Masindi % 0 0% 1 25% Wakiso % 3 100% 1 25% Kumi % 4 100% 0 0% TOTAL/ % 8 62 % 7 35% AVERAGE Source: Annual District Road Work plans Failure to utilize RAMPs recommendations, where they were prepared, and the failure to prepare RAMPS recommendations on some roads in the rehabilitation and maintenance of roads during the years 2007/2008, 2008/2009 and 2009/2010, was attributed to laxity by the respective District Engineers (DE), who failed to submit RAMPS recommendations to the District Technical Planning Committees (DTPC). However, according to the District Accounting Officers, in the FY 2010/2011, the use of RAMPS was abandoned following instructions by URF to start preparing DAWPS using programming tables. Management Response: Hoima district Management explained that all its requests to URF were based on RAMPS (This explanation could not be verified as documents were not provided to the audit team). 18

28 Masindi district Management explained that it was using RAMPS till the coming of URF when they shifted to programming tables. The management of the district further explained that there was irrational allocation of funds to various stakeholders when it comes to the rehabilitation and maintenance of roads. For example, the standard cost of rehabilitating the same kilometer of road differs with institutions: UNRA applied a standard cost per kilometer of Shs.36 million, Shs.25 million by MoW&T and Shs.13 million by MoLG (Districts). They called for harmization of the rates applied. Wakiso district Management explained that they complied with the use of RAMPS up to the FY 2007/08, but the programme developed software problems and the district trained focal person left the district. URF introduced a simpler format based on road condition and available funds against work plans approved by the Council. Mukono district Management explained that they were not using RAMPS, but it was instead using programming tables. The management of the district, however, agreed that RAMPS is more scientific and better since it could generate road conditions more accurately. Generally, all districts admitted that RAMPS recommendations, sometimes, were not utilized due to the inadequate funding released to the districts, which could not cover all the ranges of the bad roads in the districts. The management of Uganda Road Fund explained that it had never issued any instructions refraining districts from using RAMPS, however, it instructed that the results of RAMPS can be reported in the Annual District Road Work Plans to URF using a more compatible software with URF system and, as a result, it advised the districts to use Microsoft excel Computer programme, (Programming Tables). URF further explained that the newly emerging districts had not procured RAMPS, and the alternative option was to advise them to use the Tables. 19

29 Non preparation of RAMP and non utilization of RAMP recommendations during the rehabilitation and maintenance of some roads led to non-scientific cost estimates being used in the planning process. Districts did not comply with the planning guidelines for the rehabilitation and maintenance of district roads and as a result Shs.1,483,574,573 spent on the rehabilitation and maintenance of 7 roads, which had no RAMP recommendations could not be relied on for accuracy and the districts might not have received value for money on the amount spent. Additionally, the use of programming tables, which are basically dependent on the engineer s personal judgment, is likely to give non-scientific costs. Conclusion Districts did not fully comply with the requirement of considering RAMPS recommendations during the planning and budgeting for the rehabilitation and maintenance of the roads. The costs of the rehabilitation and maintenance on some roads were not scientifically derived and this casts doubt on their correctness in the district budgets. Recommendations In order to attain proper planning, which is in accordance with District Road Works Planning Manuals, districts, in conjunction with URF and MoW&T, should encourage continuous use of scientific methods to determine the cost of the rehabilitation and maintenance of feeder roads. The DEs who lack knowledge and skills in the use of scientific methods of determining rehabilitation and maintenance costs should be trained. URF should expand its mandate to offering technical backstopping to DLGE engineers in areas where they are not competent enough. URF should also ensure that the funds released to districts for the rehabilitation and maintenance of feeder include a portion of operational costs to enable districts to plan and budget for those activities effectively. 20

30 Districts should harmonize the requirements of RAMPS with those of the programming tables to ensure that the two are used complement each other for proper planning and communication of results. In future, URF, UNRA, MoW&T, MoLG and other key stakeholders in the road sector should explore a possibility of developing more comprehensive and standard software, which would enable planning, budgeting, implementation and reporting of road works in the sector Preparation of Work plans for the Rehabilitation and Maintenance of Feeder Roads According to Local Government Finance and Accounting Regulations, 2007 Sections 18 (1), the chief executive shall ensure prompt production of annual plans and budgets for the council. Section 18 (3) of the same regulations, requires that budget estimates shall be based on the objectives to be achieved for the financial year and during implementation efforts shall be made to achieve the agreed objectives or targets, as the programme of the council. Accordingly, annual district work plans for the rehabilitation and maintenance of feeder roads should be prepared in accordance with approved budgets. Details of interventions and activities for the different operations of routine and periodic maintenance, rehabilitation and spot repairs are disclosed in both the annual work plan and the approved budget. From the five districts visited under the case study, only Masindi district prepared annual work plans in accordance with the approved budgets. It was noted that in the four districts work plans were prepared and they indicated the interventions and activities to be carried out, which were not indicated in the approved budgets. The budgets only indicated absolute costs of the interventions without specifying the activities and costs on each road. Notes to the budgets detailing interventions, activities and costs on each road were not prepared and attached to the budgets. During interviews management explained that the notes to the budgets were not prepared being an oversight on their side. In the absence of detailed notes to the budget, it was difficult to compare the rehabilitation and maintenance activities specified in the work plans with those in the budgets. Preparation of annual work plans which are not in accordance with the 21

31 budget provisions could lead to the execution of non priority works outside the budgeted resources. Management Response Wakiso district Management agreed that the budgets did not capture all the details of works on the roads, but were (details) reflected in the Bills of Quantities (BOQs). It was not a practice to attach detailed notes of road interventions to budgets. Kumi district Management admitted that the notes to the budgets were not prepared, but explained that both the budgets and work plans are approved by the Council, hence reducing the fear that the two might be conflicting. Hoima district Management explained that they had all the summaries in the budgets naming all the roads and estimated costs (This explanation could not be verified as documents were not provided to the audit team). Mukono district Management explained that the details of road works are indicated in the work plans. Management attributed the preparation of budgets without detailed notes to the absence of a district Investment Plan. Conclusion Activities for the rehabilitation and maintenance of feeder roads in the districts were not specified in the budgets, in form of notes to the budgets. In such circumstances, we could not establish that the activities planned and budgeted for were the ones appearing in the work plans. 22

32 Recommendations District Planning Committees should ensure that work plans for the rehabilitation and maintenance of roads are prepared from detailed activities supporting the budget provisions. The District Planning Committees should ensure that notes to the budget are prepared and attached to the budgets clearly indicating the interventions and activities to be carried out Use of Annual District Road Work plans in the Execution of Works According to the District Road Works: Administrative and Operational Guidelines Vol. 5, districts should develop the Annual District Road Work plans (ADRWPs) to identify maintainable road links and select and prioritize the road works. Vol.1 of the District Road Works: Planning manual, Section D3 further gives detailed instructions for the preparation of ADRWP. The actual interventions and activities for the rehabilitation and maintenance of feeder roads should be in accordance with those in the approved ADRWP. It was noted that 17 out of 20 (85%) road works in the five districts sampled were executed as per ADRWP. Wakiso, Kumi and Masindi districts fully executed their works, on the selected four roads per district, as per ADRWP. In Mukono district, the road works on the Bugereka Nakyeke Kasawo road, which were planned for the financial year 2007/2008, were not executed due to lack of funds as explained by the DE. The district had three roads maintained as per ADRWP. In Hoima district only two roads were maintained as per ADRWP. Muteme Mukabara road was planned for rehabilitation at a cost of Shs.65, 550,000 in the financial year 2007/2008, but the actual works executed were for periodic maintenance. There was no reason given by management as to why works on the road were executed outside the approved plan and the ADRWP was not revised accordingly. The cost of the actual execution of the works could also not be ascertained due to the failure of the district management to avail records pertaining to the payments. Additionally, the annual work plan for the financial year 2008/2009 was not availed for audit and all efforts to access it were rendered futile. 23

33 Execution of interventions and activities outside the approved ADRWP creates pressure on district budgets. Management response Management clarified that the Muteme Mukabara road was not planned for rehabilitation as indicated in the report. The road was planned for in the FY 2007/08 for periodic maintenance under PAF. (This explanation could not be verified as documents were not provided to the audit team). Conclusion Districts did not in some instances fully adhere to the work plans during the execution of interventions and activities in the rehabilitation and maintenance of feeder roads and this led to the execution of road works outside the planned interventions and activities. Recommendation District Road engineers should ensure that only works for the rehabilitation and maintenance of feeder roads appearing in the approved annual work plans are executed. 4.2 EXECUTION OF REHABILIATION AND MAINTENANCE WORKS Implementation of Road works as per Work plan Schedules According to the district road works planning manual, the implementation of feeder roads rehabilitation and maintenance works should comply with the work plan schedules detailed in the work plan, which clearly define the interventions/activities to be undertaken. It was established that only works on the 3 (15%) roads in the districts of Hoima, Mukono and Wakiso out of the 20 selected roads in the five districts, were completed as per work plan schedule. Works on seventeen (85%) roads were not implemented as per work plan schedules. The analysis of annual district work plan schedules, respective payment vouchers, contract documents and progress reports revealed that there were delays in the implementation of works, which ranged from one month to two years, Appendix IV, refers. For example, the rehabilitation of Bullima Byebega road in Masindi district delayed for one year and seven months; and at the time of 24

34 audit (July 2011), the rehabilitation of Kigumba Apodorwa Mboira road in the same district had been abandoned since the financial year 2008/2009. It should, however, be noted that some roads in Hoima and Wakiso districts were completed as per work plan schedules. They include: Kigorobya Icukira Kitoba in Hoima district and Kitanda Sayi Kiwebwa in Wakiso district. The average district performance indicated that Masindi and Kumi districts experienced the highest delays of 22 and 9 months, respectively, in all the four roads selected for scrutiny in the districts. Picture.1: showing on-going rehabilitation works on Mukongoro-Kamacha- Bukedea Road, Kumi District. Wokers executing road works Source: Picture taken by OAG staff In a related development, works on Mukura-Ngora road in Kumi district delayed for 1 ½ years as at the time of audit inspection (June 2011). The culverts were delivered and abandoned by the road sides and the old ones had not been replaced as shown in the photographs below: 25

35 Pictures.2 & 3: Showing old and abandoned culverts at Mukura-Ngora road in Kumi district Old culverts not replaced. Abandoned culverts Source: Picture taken by OAG staff Hoima district was the best performing district with an average delay of 1 month followed by Wakiso (3 months) and Mukono district (5 months) as indicated in Table No.7 (a) below: Table.7 (a): Showing average district project delays District Road Roads not % of roads not District Average planned implemented as per completed as delay work plan schedule per schedule (Months) Hoima ¾ Kumi Masindi Mukono Wakiso Total/Average Source: District annual work plans, payment vouchers, payment certificates & progress reports 26

36 The delay in implementing the road works was attributed to delayed release of funds from MOFPED and URF, insufficient funding, inadequate capacity of contractors (i.e. human, equipment and financial capacity) to implement works as agreed, machine breakdown and delays in the procurement process, as explained by the district officials during interviews. Scrutiny of the contract documents, which were taken through a procurement cycle, showed that there were delays at different procurement stages. Kumi district experienced the highest average delay of 76 days compared to Hoima district with an average delay of 15 days in the procurement process as summarized in Table No.7 (b) and detailed in Appendix III (b). In Wakiso district no procurement records were provided for analysis. Table No.7 (b) showing district delays (days) in the procurement process DISTRICTS FINANCIAL YEAR HOIMA KUMI MUKONO 2007/08 NA NA NA 2008/09 NA / / AVERAGE DELAY (DAYS) NA: Procurement files for the sampled roads were not availed Source: District Procumbent records As a result of the delayed road works, the public did not receive the intended benefits in time despite the government (districts) expenditure of a total of shs.3,168,711,204 on projects as shown in Appendix IV. These delays attracted payment of liquidated damages of Shs.326,868,894 in accordance with the General Conditions of Contracts (GCC), which provided for a payment of liquidated damages of 0.5% of the contract price per day up to a maximum of 10% of the contract price as detailed in Appendix V. The districts did not recover the damages as summarized in Table No. 8 below: 27

37 Table.8: Showing amounts spent on delayed road projects S/N DISTRICT COST OF DELAYED ROAD PROJECTS (SHS) RECOVERABLE LIQUIDATED DAMAGES (SHS) 1 Hoima 61,276,533 6,127,653 2 Kumi 1,141,825, ,182,531 3 Masindi 795,809,543 74,580,954 4 Mukono 549,832,250 69,980,999 5 Wakiso 619,967,574 61,996,757 Total 3,168,711, ,868,894 Source: District Contract documents, payment vouchers and payment certificates Management response Masindi district Management explained that works on the Bulima-Byebega road were undertaken by two contractors: Minimax Limited and Empa associated Limited who begun the works at different times. The works were completed within a period of 8 months by both contractors. Management further explained that there was no delay on the Kitamba-Kijujubwa road and the only delay was experienced at Ibaralibi-Alimugnza road. The works on this road commenced on 22 nd January 2010 and were expected to end on 30 th June 2010, but were extended for one month to 30 th July Due to delayed clearance of the use of closing year balances by the Accountant General, the works on the road resumed on 1 st October 2010 and ended on 31 st December 2010 (This explanation could not be verified as documents were not provided to the audit team). Wakiso district Management explained that the district had generally been on schedule except in isolated cases like when there were delays in approval by the relevant authorities, such as Solicitor General. Management further explained that the recovery of liquidated damages had not been enforced because in most cases the delay was not attributed to the contractors. 28

38 Contractors sometimes delay due to scarce, and at times, inferior quality of road plant available for hire. Kumi district Management explained that the district had planned for the rehabilitation of roads, including low cost sealing of one road. However, the modalities for implementation of low cost sealing were not concluded by the Ministry of Works and Transport by close of the financial year. The District then opted to use the money meant for low cost sealing to rehabilitate Atoot Kodike road section C. It was at this point then that the contract to rehabilitate Atoot Kodike road section C was awarded hence the delay. There was also understaffing in the PDU, which has been addressed by recruiting one more staff. For Mukongoro Kamacha- Bukedea Road, at the time of audit, gravelling and culvert installation was complete. However, stone pitching which is the last activity after swamp filling was underway at some areas of the road as shown in picture 1 P (Page 36) of the OAG s report, but the road section was in use. For Mukura Ngora-road, the photograph of the abandoned culverts seem to have been taken before June The said culverts have since been installed. However, management has had challenges with the contractor who claims to have completed the work whereas he has not. The contractor has been directed to complete the works. Meanwhile, the Accounting Officer has referred the matter to the Solicitor General for legal advice. Mukono district Management explained that the delay was due to inadequate equipment on the side of the contractors. No explanation was given from Hoima district in regard to the delays in implementation of road works. 29

39 Conclusion Delayed completion of road works hampered the delivery of services, thus affecting the socio-economic activities and transportation of agricultural inputs and produce from the country side. Recommendations The implementation of the activities of the rehabilitation and maintenance of feeder roads should be in accordance with the work plan schedules so as to ensure timely delivery of intended services. URF together with MOFPED should ensure that the funds for the rehabilitation and maintenance of feeder roads are released as per district approved budgets and in time to enable districts to execute their roads works in accordance with work plan schedules and budgets. District Contracts Committees should critically evaluate the contractors capacity and previous performance to ensure that only competent contractors are awarded contracts. District Procurement and Disposal Units (PDUs) should ensure that the procurement process is managed in accordance with the PPDA regulations and in a timely manner. Districts should consider applying General Conditions of Contracts (GCC), which govern the timely execution of contracts such that any delay in completion of the road project will attract the payment of liquidated damages by the contractors. Districts should ensure that the approvals required from 3 rd parties, such as the Solicitor General, are obtained on time to avoid jeopardising project progress Adherence to Procurement Laws, Regulations and Guidelines According to the Public Procurement and Disposal of public Assets Act, (PPDA) 2003, the Local Governments (Public Procurement and Disposal of Public Assets) Regulations and Guidelines, the procurement and management of contracts require public entities to prepare procurement plans, obtain procurement requisitions from user departments, confirm the availability of funds, review contract specifications, select methods of procurement and evaluate bids, prepare and approve bidding 30

40 documents, advertise for the services and invite bids, receive and open bids, review evaluation reports, award and communicate contracts, ensure that awards are accepted, ensure that contracts are signed, ensure that contract performance is managed and monitored, ensure that payments to contractors are net of retention fees, statutory deductions and advances and contracts evaluated at the end. A sample of 20 roads selected in the five districts was subjected to assessment criteria to test if all the aforementioned procedures were followed in the procurement cycle. Compliance levels were noted for each of the contracts awarded on the selected roads in the districts. On average 84 procurement procedures were to be implemented per district on the 4 roads selected in accordance with the PPDA procurement cycle and regulations. Out of the average 84 procedures, only 49 were complied with resulting in an average district compliance level of only 58% in all the districts visited. Wakiso district performed well with 95% level of compliance followed by Mukono (72%). Hoima was the worst performing district with a compliance level of only 34%. Table.9 shows district compliance levels. Table.9: Showing district procurement compliance levels District Procurement activities to be implemented as per Activities complied with. Percentage compliance PPDA cycle and regulations Wakiso % Mukono % Kumi % Masindi % Hoima % Average % Source: District procurement records Non compliance to procurement laws, regulations and guidelines was noted in the following areas: Audit established that procurement plans were not availed to audit in 3 out of 5 districts of Mukono, Hoima and Masindi for the FY 2007/2008. Through the interviews conducted with the Heads of PDUs in all the five districts visited, it was confirmed that the engineering departments delayed in submitting 31

41 the procurement requisitions (filled with clear specifications of works and statement of requirements) to the PDU for initialization of the procurement process. It was also confirmed that the approval of contracts by the Office of the Solicitor General sometimes delayed. For example, the approval of the contract for the rehabilitation of the Mukongoro-Kamaca-Bukedea road in Kumi district in the FY 2010/2011 was delayed by 42 days. There was no documentary evidence to show that the districts managed contract in accordance to the PPDA regulations. Through interviews with Heads of PDUs and engineering departments in all the five districts visited, the above anomalies were attributed to under-staffing levels in their departments. However, scrutiny of the district staffing levels as per Appendix VII revealed that districts were not highly understaffed. Mukono and Masindi districts were fully staffed. Audit attributed the causes of the aforementioned anomalies to laxity of staff in following PPDA guidelines. Without procurement plans in place, procurements were made haphazardly outside the approved budgets and work plans and also in contradiction with PPDA regulations. Non-compliance to procurement procedures delayed the procurement process, which, subsequently, affected the timely implementation of road works. Also, the failure to manage, monitor, supervise and evaluate contracts, left the defects on road works undetected and contractors with poor track record continued to be awarded contracts. Management response Mukono district Management explained that the procurement plans were in place with its PDU and copies would be sent for verification. (Copies not sent for verification) Kumi district Management attributed the non-compliance to the procurement procedures to understaffing, especially in the Engineering Department, which leads to delays in submitting procurement requisitions to PDU for initiation of the 32

42 procurement Process. However, the district has recruited two engineering assistants in a bid to bridge the existing staffing gap. There was also understaffing in the PDU which has been addressed by recruiting one more member of staff. Heads of Departments have also been trained in Procurement management to address the knowledge and skills gaps. They agreed to implement the recommendations raised in the OAG s report. Hoima district Management explained that at that time (2007/08) the user departments used to submit their requests for procurement which were consistent with the approved budgets and work plans and this was the basis for kick starting the procurement process. Currently they have a Procurement and Disposal Unit (PDU) and the annual procurement plans are compiled. (Copies not sent for verification.) Masindi district Management agreed with the finding in the report during the exit meeting, although it did not respond in writing. Conclusion Districts did not fully comply with the PPDA Act, local government regulations and guidelines and in the circumstance, this caused poor identification of priorities, planning, budgeting and execution of the rehabilitation and maintenance activities in an economic an efficient manner. Recommendations Districts should fully comply with all the provisions in the PPDA Act, and the local government regulations and guidelines to ensure proper identification, planning, budgeting and execution of the rehabilitation and maintenance activities. The district PDUs should give proper procurement guidance, in accordance with the PPDA Act, to district engineering departments on matters concerning the procurement of road contractors. 33

43 The district engineering departments should always follow guidelines given to them and should always prepare and submit their procurement requisitions in time to allow the district PDUs to prepare procurement plans in time Availability of Essential Road Equipment According to the local government policy on districts road equipment, districts are supposed to have a full set of essential road equipment, which includes: a motor grader, a wheel loader, a pick up, an excavator (truck loader), a tractor, a dump truck, a water bouser, motor cycles, a pedestrian roller, a motor roller, a concrete mixer, and a bulldozer. It was established that none of the five districts visited had a full set of essential road equipment as required. The district inventory of the road equipment ranged between 33% (5 out of 15) for Hoima district to 87% (13 out of 15) for Masindi and Mukono districts. Further inquiry into the status of the equipment available revealed that only 54% of the road equipment was in fair running condition and 46% were old, broken down or grounded. Masindi district was the most affected with 11 out of 13 (85%) road equipment grounded and broken down followed by Mukono district which had 7 out 13 (54%) equipment grounded. Wakiso district was the only district with all its 11 (100%) equipment in running condition because the equipment were newly acquired compared to those of the other districts. A summary of the district equipment inventory levels and status is shown in Table.10 below and district details in Appendix VI attached. 34

44 Table.10: Showing district equipment inventory levels and status District Required Number of % Road Equipments % of equipment in Old and % of old and Number of road Equipment in running running condition grounded grounded district road equipment (A) equipments present Present (B/A)]*100 status (D) (E)=[(D)/(B)]*100 equipment (F) (G)=[(F)/(B)]*100 (B) Hoima Wakiso Kumi Masindi Mukono Overall Source: District roads equipment inventory and physical inspection Pictures 4 & 5: showing old and grounded equipment in Mukono district Source: Pictures taken by OAG staff Through interviews with the district management teams, it was explained that districts were supposed to carry out the minor maintenances on road equipment while the regional mechanical workshops (Bugembe, Gulu and Mbarara) were 35

45 supposed to carry out major maintenance on road equipment. This was also confirmed by the review of the Ministry of Works Scheme for the maintenance of district and urban roads guidelines 5 for maintenance of equipment, which set up the regional mechanical workshops. Furthermore, management explained that due to meagre resources at the districts, they were failing to carry out minor maintenances which later resulted into major breakdown hence requiring major maintenance from regional mechanical workshops. Additionally, audit noted that districts were not adequately maintaining their road equipment to keep them in a good running condition. In all the five districts visited during the study there was no evidence to show that pre and post repair assessments were carried out since there were no reports available on file. This was further compounded by the failure by the districts to send their broken down equipment for repairs at the regional mechanical workshops despite the release of funds by the URF for the repair of equipment. It was further established that despite the release of shs.7,167,018,457 in the FYs 2009/10 and 2010/11 alone to the regional mechanical workshops at Bugembe and Mbarara, district road equipment still remained in a poor state as shown in Table.11 below. Table.11: Showing releases to Regional Mechanical Workshops by URF and MoW&T FINANCIAL YEAR MECHANICAL WORKSHOPS TOTAL AMOUNT RELEASED (SHS) BUGEMBE MBARARA 2009/10 293,426,400 3,626,874,300 3,920,300, /11 1,380,085,457 1,866,632,300 3,246,717,757 TOTAL 1,673,511,857 5,493,506,600 7,167,018,457 Source: Cash books and bank statements at Regional Mechanical Workshops During inspection of the regional workshops, it was observed that a number of district equipment had taken long at the workshops. On average district equipment had 5 MoW&T Scheme for maintaining district and Urban roads using equipment and road gangs, 2011 page 9 36

46 taken sixteen (16) months at both workshops without being repaired at the time of inspection. Details of the time taken to repair equipment are as indicated in Appendix VIII. District officials cited the following as reasons for not sending their road equipment to the regional mechanical workshops laxity by the regional workshops to effect timely repairs, coupled with fears of vandalising their equipments due to the long time it takes to repair them. For example, it took more than one year to repair a roller from Masindi district by Bugembe workshop. However, it was also noted that the districts did not communicate to the regional mechanical workshops of their road equipment breakdowns. The Managers of both mechanical workshops, during interview, attributed the delay in repairing the district equipment to insufficient funds released, which do not allow them to work on all road equipment diagnosed for repair. They also explained that they have to prioritize which equipment to repair first and sometimes succumb to political pressure. They again noted that the long procurement process does not allow them purchase spares in time. The contracts committee at ministry headquarters delay to award contracts. They also noted that sometimes funds are released late and sometimes at the closure of the financial year. They further explained that districts do not report equipment break down in time and that the equipment are poorly handled resulting into major repairs, which require a lot of funds and time. The failure by government to allocate the requisite number of road equipment to districts, coupled with constant equipment break down denied districts the minimum capacity required to rehabilitate and maintain their planned feeder road works using the relatively cheap option of force on account as compared to outsourcing. Conclusion Without a full set of road equipment and their appropriate maintenance, districts have failed to rehabilitate and maintain feeder roads and meet their obligation of providing appropriate feeder road networks for the economic development of their communities. 37

47 Recommendations Government should prioritize the allocation of a full set of road equipment to districts, which will enable them to carry out their planned rehabilitation and maintenance activities. District engineering departments should always conduct timely repair assessment reviews of their road equipment and communicate their repair needs to the regional mechanical workshops in a timely manner. The regional mechanical workshops should inturn ensure that the district road equipment sent to them for repairs are repaired in time. Government should prioritize the funding of the budgetary requirements of mechanical workshops to enable them support districts in their efforts to rehabilitate and maintain feeder roads in their areas of jurisdiction. The Ministry of Works and Transport should develop strategies that will enable expeditious award of contracts for the supply of spare parts to regional mechanical workshops. Districts should ensure that the equipment operators are given the necessary skills that will enable them to handle road equipment properly to avoid unnecessary breakdown. Management response All districts explained that their road equipment were acquired as far back as 1993 and were old resulting into constant breakdown and high maintenance costs. They agreed that there were delays in repairing road equipment due to the challenges faced in procuring spare parts by regional workshops. URF noted that districts could service their equipment through regional mechanical workshops, but the workshops delay to repair them. MoLG noted that the districts lack personnel to properly handle equipment and this has caused a challenge in their maintenance. 38

48 4.2.4 Funding of District Feeder Roads Rehabilitation and Maintenance Works The funding of districts feeder roads rehabilitation and maintenance works is provided mainly by central government grants, which are supplemented by local revenues and grants from development partners. After signing performance agreements with URF, MOFPED is required to release funds on a quarterly basis to districts to enable them to implement their road works in time. At the end of every quarter, districts are required to prepare quarterly progress reports showing the progress of works which in turn serves as a pre-requisite for subsequent funding. It was noted that over the period under review, a total of Shs.20,636,221,784 was budgeted for the rehabilitation and maintenance of feeder roads in the five districts selected for audit. Out of the budgeted funding, a total of shs.18,834,718,789 (91%) was released to the districts, leading to a funding gap of shs.1,781,502,995. Further analysis of the district actual expenditure indicated that only shs.14, 965,652,222 was spent by the districts over the period, which gives an absorption rate of only 79% despite the budget-release performance of 91%. This showed that districts did not have the capacity to absorb all the funds released to them as shown in Table.12. Table.12: Showing District feeder road budgets, releases, expenditure and absorption rates District Annual budget (A) Actual release by M.o.F.P.E.D (B) Under/(over funding) (C)=(A) (B) Actual expenditure/ Absorption Wakiso 6,596,830,790 5,585,791,750 1,011,039,040 5,213,650,931 93% Masindi 4,335,226,070 3,425,100, ,125,968 3,087,167,825 90% (D) Actual absorption (%) (E)=(D)/(B) Hoima 2,774,206,609 2,688,832,160 85,374,449 2,265,932,616 84% Mukono 3,162,883,000 3,161,778,586 18,895,586 2,330,296,800 74% Kumi 3,767,075,315 3,973,216,191 (206,140,876) 2,068,604,050 52% Total 20,636,221,784 18,834,718,789 1,781,502,995 14,965,652,222 79% Source: Audited final accounts and General fund account bank statements for respective districts. 39

49 From the table above, Wakiso district had the highest absorption rate of 93% while Kumi district had the least absorption rate of 52% despite the over funding of its budget by over shs.206,140,876. Through interviews with the district management teams and document review, the challenge of under absorption was attributed to delayed release of funds from funding agencies and from district general accounts to works departmental accounts. It took Hoima district 49 days, on average, to receive funding from the Central Government, Kumi (38), Mukono (28) and Wakiso (42). Audit also noted that the districts delayed to remit funds to district works departmental accounts. In Mukono district, it took 17 days, on average, for the works department to receive funds from the district general fund account, Kumi (12), Hoima (9) and Wakiso (8). No records were provided for audit in Masindi and Hoima districts for the FYs 2007/08 and 2008/09. The summary of both delays is indicated in Table No.13. Table No.13 showing district and departmental average delays in receipt of funds FINANCIAL YEAR DISTRICTS Hoima Kumi Masindi Mukono Wakiso DST DPT DST DPT DST DPT DST DPT DST DPT 2007/08 N/A N/A N/A 8 N/A N/A 8 12 N/A /09 N/A N/A 20 7 N/A N/A / N/A N/A / N/A N/A Average Delay (days) N/A N/A Source: District Cash releases and Bank Statements N/A: Dates not extracted due to lack of records DST: Delays from Finance to districts DPT: Delays from district General Account to works Departmental accounts 40

50 The district management teams further attributed the low absorption of funds to the prolonged and delayed procurement process due to understaffing in some districts in the PDUs and laxity in others. They also cited inadequate capacity on the part of some contractors, who sometimes obtained multiple contracts in different districts, led to work overloads beyond their capacity. Audit also noted that districts did not strictly observe their work plan schedules, leading to the accumulation of road funds that remained unspent at the closure of FYs. The delayed release of funds affected their ability to rehabilitate and maintain their budgeted roads in time. There is a risk of misusing of un-absorbed funds if unspent balances on district works account are not returned to the consolidated funds as required by law. Management response The Accounting officers explained that they were under obligation to transfer funds within two weeks of receipt of funds. Funds are transferred as soon as they are received except in a few cases of non accountability. They also explained that some delays in the transfer of funds are caused by delayed cash release details. The Accounting officers further explained that the low absorption of funds was attributed to the understaffing in Engineering Departments and PDUs and the situation was exacerbated by the districts inability to attract and retain critical staff in engineering department. Conclusion Districts did not receive all their budgeted funds with the exception of Kumi and they also did not absorb all the funds released to them. Due to untimely release of funds to districts and the low absorption rates, the status of roads in the districts has remained undesirable and, as a result, the socio-economic development of the communities is hampered, leading to the continued existence of poverty and low standard of living among the populace. 41

51 Recommendations The Ministry of Finance, Planning and Economic Development should ensure timely release of funds, with cash release details, to district to enable them rehabilitate and maintain their feeder roads as per their work plan schedules. District Accounting Officers should ensure timely transfer of funds to the works departmental accounts. Districts should strictly observe their work plan schedules in the execution of the rehabilitation and maintenance of road works to avoid funds keeping redundant on district accounts. The district PDUs should improve their staffing levels and ensure that the procurement process is streamlined to cut out delays. The district contracts committees should ensure that competent firms/contractors, with outstanding capacity to handle district road works, are awarded contracts. 4.3 INSPECTION, SUPERVISION, MONITORING AND EVALUATION OF ROAD WORKS Inspection and Supervision of Road works According to the district road works implementation and monitoring manual Vol. 3, the engineering department is required to inspect and supervise all road works during execution to verify progress and report on the quality and quantity of works executed. The district engineer should visit the works at least once a week while the district inspector of works should visit and inspect the works at least twice a week as laid out in the Ministry of Works Scheme for maintenance of district and urban roads guidelines 6 on road maintenance It was established that all the five districts had no evidence that they had carried out the supervision and inspection activities as required. Only three (3) inspection reports were availed for audit in Mukono district and two (2) in Wakiso district as evidence of actual visits made for supervision and inspection over the four years reviewed. 6 MoW&T Scheme for maintaining district and urban roads 2011, page 24 42

52 Hoima district lacked a district engineer and a works supervisor whereas Kumi district lacked a works supervisor and a senior engineering assistant in charge of mechanics. Through interviews with district management teams, the above irregularity was attributed to several factors, namely: Oversight for not documenting the findings of the inspection and supervision activities carried out by the engineering department. Understaffing of the engineering departments; but Hoima and Kumi districts being the mostly affected. Inadequate transport facilities such as motor cycles and pick-up trucks to reach the field to carry out effective supervision and inspection of rehabilitation and maintenance activities. Lack of effective inspection and supervision of road works by the district engineering departments led to a number of defects going undetected, such as; clogged drainages, inadequate murram, poorly installed culverts and reduced road width thus; affecting the quality of works. This also affected the timely execution of works as contractors were not frequently inspected and defects corrected on time. For example, the drainage system on Wagala Najjembe road in Mukono district had not been opened up and the vegetation had started affecting the road banks as shown in the photograph below: 43

53 Picture.6: Showing unsatisfactory road works Drainage system covered with grass on Wagala Najjembe road in Mukono district Road width being washed away at Ntoma swamp on Kitamba-Kijujubwa road, Masindi district Source: Pictures taken by OAG staff Management response Districts explained that they were not adequately inspecting and supervising road works due to limited vehicles and motorcycles as well as understaffing challenges faced in the engineering department. They also explained that there has been laxity in the documentation of supervision activities and in record keeping. Conclusion In some cases, the rehabilitation and maintenance of feeder roads was not executed as per work plan schedules due to inadequate inspection and supervision of road works. Recommendations The district engineering departments should ensure that the supervision and inspection of road works activities are carried out as per work plans and implementation and monitoring manuals. The district engineering departments should ensure that the findings of supervision and inspections are properly documented and recommendations therein implemented to ensure that corrective measures are taken. 44

54 Districts should avail transport facilities to the district engineering departments to enable them to carry out timely inspection and supervisory activities Monitoring and Evaluation of the Rehabilitation and Maintenance of Road Works According to Local Government Act, 2007, Section 30 (6), a local government shall monitor the provision of government services or the implementation of projects in the area. Also according to Ministry of Works Scheme for maintenance of district and urban roads guidelines 7, Monitoring and Evaluation (M&E) activities should be carried out by both the district technical and political teams: Multi-sectoral monitoring, on a quarterly basis. These activities are required to be conducted with the aim of assessing performance in terms of output, quality and costs of works so as to enable the generation of M&E reports. These are in turn submitted to the district management for action and follow. It was established that all the five districts did not have M &E work plans showing scheduled M&E visits; consequently, the quarterly M&E visits to the rehabilitation and maintenance projects were not conducted as expected. Only 21 out of the 80 (26%) of expected reports on technical monitoring and 7 out of the 80 (9%) expected reports on political monitoring were availed to audit as shown in Table MoW&T Scheme for maintaining district and urban roads 2011, page 24 45

55 Table.14: Showing planned and actual quarterly M & E visits conducted District Quarterly M & E activities conducted Remarks Technical team monitoring Expected reports Actual % Expected Political team monitoring reports Actual % Hoima No M&E reports availed to audit for both teams Kumi % % 13 out of 32 reports were availed to audit of which 6 were for technical and 7 for political monitoring teams. Masindi % out of 32 reports were availed to audit of which all were for technical monitoring team and no political monitoring reports availed to audit. Mukono % out of 32 reports were availed to audit of which all were for technical monitoring team and no political monitoring reports availed to audit. Wakiso % out of 32 reports were availed to audit of which all were for technical monitoring team and no political monitoring reports availed to audit. Total Source: Districts M&E reports availed for audit. From the above table, in regard to technical monitoring, Mukono district performed relatively better than the other districts visited with 7 out of 16 (48%) M & E reports prepared followed by Masindi and Kumi districts which had 6 out of 16 (38%) reports, while Wakiso and Hoima districts trailed with 2 and no M & E reports prepared, respectively. As far as political monitoring is concerned, with the exception of Kumi district which had 7 out of 16 (44%) of expected M & E reports prepared, the rest of the four districts visited did not prepare M & E reports. In additional, even for the few reports that were made, there was no evidence on file to show that the recommendations therein were implemented by the engineering departments and no subsequent follow-ups were made by both teams. 46

56 The interviews conducted with respective districts top management teams attributed the low levels of conducting M & E activities to a number of reasons as indicated below: Districts did not plan for M & E activities due to limited resources available. Sectors did not remit the required funding to the district planners to plan, draw schedules and implement M & E activities as required by the various funding agencies indicated in the district operational guidelines. It was an oversight not to include the road sector in their overall district M & E reports. Audit, however, attributed the failure to conduct M & E activities by both the technical and political teams of the district administration to laxity and non prioritization of M & E activities. The districts technical and political teams did not carry out quarterly M&E activities on the rehabilitation and maintenance of feeder roads as expected of them, despite the expenditure of Shs.402,594,245 on M & E activities as indicated in Table No. 15 below: Table No.15 showing district actual expenditure on M & E activities FINANCIAL YEAR DISTRICTS AMOUNT RELEASED (SHS) Hoima Kumi Masindi Mukono Wakiso 2007/08 30,885, ,354, ,240, /09 41,242,998 65,010, ,428, ,681, /10 26,659,916 53,233, ,779, ,672, / TOTAL 98,788, ,243, ,562, ,594,245 47

57 The quality of the road works executed were neither monitored nor evaluated as expected and as a result no immediate corrective actions were taken, where necessary, thus affecting the attainment of satisfactory works. Management response The districts management teams explained that they conduct multisectoral monitoring and a single district report generated. There are no specific M & E reports prepared for the rehabilitation and maintenance of feeder roads. Conclusion Failure to plan and implement M&E activities as required by the implementation manual and non observant of the M&E recommendations overrides the objectives of M & E of ensuring that shoddy works and defects are detected and mitigated in a precise and timely manner hence improving the quality of road works executed. Recommendations Districts should ensure that M&E activities are planned, budgeted for and implemented as per work plan schedules. District engineering departments should ensure that the recommendations made by the M&E teams are taken seriously to and follow-ups made to attain satisfactory road works. Districts should ensure that their overall M&E reports prepared also include the status of the rehabilitation and maintenance of feeder roads in their districts. Districts should prioritize M&E activities on the rehabilitation and maintenance of district feeder roads to ensure early detection of road defects so that corrective measures are undertaken for better service delivery. John F. S. Muwanga AUDITOR GENERAL KAMPALA 14 TH FEBRUARY,

58 GLOSSARY OF TERMS TERMS Road National Road/Trunks Roads Feeder Roads Urban Roads Community Access Roads Routine Road Maintenance Periodic Maintenance Rehabilitation of roads Construction of Roads Good road Fair Road DEFINITIONS Way for vehicles and other types of traffic which may or may not be lawfully usable by all traffic These are main routes linking urban centers and Districts across the international boundaries and are under the control of Uganda National Roads Authority These are roads that connect communities, health center, markets and Sub counties to service centers and fall under the control of District Authorities Roads within Cities, Municipalities and Towns that fall under the control of Urban authorities Roads that link rural communities together, major trade centers markets, and sub counties and fall under the control of Sub county authorities Works carried out continuously on a road such as keeping roads clear of debris, repairing potholes and other minor defects, maintaining shoulders, road side vegetation control, keeping pipe culverts and maintenance of signs and signals to ensure there integrity Planned intervention to prevent ingress of water to the pavement and restore the surface condition of the pavement, graveling, road shaping, maintenance of Bridges and Culverts at interval of greater than one year Planned intervention to restore the road condition (Pavement, road surface and drainage channels to the original state and this is usually carried out at intervals of greater that one year) Planned intervention of providing a completely new road in a community (Formation of road pavements, road surface and drainage channels). This is a once for all activity It s one with a good shape, smooth running surface, with roughness less than 8m/Km with no water on the road during rains A road with reasonable shape corrugations and potholes up to 10 cm deep and has some water on the road during rains I

59 Bad Road Optimal cost Technical Committee Stakeholders A road with bad shape, deep depressions and potholes with much water on road surface during rains Is where less funds are spent to cover many kilo meters on the road A team of experts and stakeholders mandated to develop standards in a Specific area/field. A group, organization or system who affects or can be affected by an organization s actions II

60 Appendix I District Organization structure DISTRICT COUNCIL Internal audit unit CAO D/CAO Educ. Health PRDN Works Admin. Com. based NAT. Statutory bodies Finance Planning unit 1. CAO. Chief Administrative Officer 2. DCAO. Deputy Chief Administrative Officer 3. Educ. Education Department 4. PRD. Production and Marketing department 5. Admin. Administration Department 6. Com. Based. Community based services department 7. NAT. Natural Resources Department III

61 Appendix I continued STRUCTURE FOR WORKS DEPARTMENT DISTRICT ENGINEER U1E (1) CIVIL ENGINEERING UNIT SUPERINTENDENT OF BUILDING UNIT ASSISTANT ENG. OFFICER U7 (1) ROAD UNIT SECTION (ROAD INSPECTOR U6 (2) Administrative support staff: Stenographer Secretary U5 1 Office typist U7 1 Office attendant U8 1 Driver U8 3 Plant operator U8 2 (One for grader and one for wheel loader) Machine operator U8 1 IV

62 Appendix II Methodology AUDIT QNS ASSESSME NT DOCUMENT REVIEW PHYSICAL INSPECTION AQN1 ASC1 - Review Development Plans, Budgets, work plans and road inventory survey reports to ascertain the extent to which districts are plan and use the above document for feeder roads maintenance. Visit feeder roads worked on in the years of 2006/07 to December 2010 ascertain their status. AQN2 ASC2 Review documentations pertaining the procurement process to ascertain the extent to which it has affected maintenance of feeder roads AQN3 ASC3 Review Contract documents (B.O.Qs, Agreements- Specific conditions of contracts (SCC)and General conditions of contracts(gcc) will show the details works to be executed, time and cost - Visit a feeder roads worked on to ascertain whether works were executed as per contract document. AQN4 ASC4 - Review all requisite supporting document that must be submitted before effecting payment AQN5 ASC5 - Review Monitoring and evaluation reports prepared after M & E exercises and recommendations given there in and follow up whether their concerns are implemented. Visit all sites that were questioned in the M & E reports to ascertain the extent of implementing recommendations. V

63 Appendix III VI