Meeting with Uganda Broadcasting Corporation.
Discussed in the Committee on Commissions, Statutory Authorities and State Entreprises on August 31st, 2016
The meeting was chaired by Anita Among, Bukedea Woman Member of Parliament and also the Committee’s Vice Chairperson. The Uganda Broadcasting Corporation (UBC) team was led by its Board Chairperson Simon Kaheru and the Managing Director Winston Agaba. The meeting was also attended by two former managing directors of UBC (Paul Kihika and Edward Mugasa Musinguzi).
The management of the corporation appeared before the corporation to respond to issues raised in the Auditor General’s report. The issues responded to included;
- Failure of the corporation to value its properties.
- The corporation owing various trade creditors.
- Bad and doubtful debts
- Outstanding lease obligation
- Wasteful expenditure
- Outstanding statutory obligations to URA and NSSF.
Before, responding to the queries. UBC management team presented to the committee all documents regarding the transactions and ownership of its land across the country. The documents were referred to the committee’s subcommittee which is inquiring into the corporation’s sell of its prime land to various private companies and individuals.
The committee warned the UBC management never to engage in the sale of the corporation’s assets again. The Auditor General indicated that the corporation’s fixed assets amount to UGX 44.15bn in its statement of financial position. However, the corporation doesn’t have a fixed asset register and proof of ownership of some assets. Since there was no revaluation of its properties.
The Managing Director Winston Agaba explained they have been unable to carry out the revaluation and get a register of their assets due to lack of money which amounts to UGX 700m. The members of the committee directed both the Managing Director and the Board Chairperson to take oath that they will never engage in the sale of the corporation’s property again, which they did.
Hon. Abraham Byandala Former Minister for Works and Transport and now a member of the committee advised UBC management to get a short term management contract to improve on its performance. “UBC should consider getting a short term management contract. If you ask in this room how many people watch UBC. You will get one” he advised. The Committee Vice Chairperson added “You (UBC) change the branding. You will get clients”.
The Board Chairperson, Simon Kaheru explained that this exactly what the Review Committee which was put in place by Minister Frank Tumwebaze is doing. It will even propose restructurings were necessary.
The Auditor General also reported that UBC owes about UGX 28.6bn to various trade creditors. The Managing Director explained that some of these debts dates way back from 2006. He requested the committee to let Former Managing Director Mugasa Edward to explain some of these debts since some of them were entered into during his time. However, Mugasa objected “I didn’t leave any debt there. I left in May 2010. I am uncomfortable to come here and help the current UBC to account. I am even in court challenging my appearance here”. He added that he wrote a handover report and asked whoever wanted more details to read his report.
However, Paul kihika, also Former Managing Director who succeeded Edward Mugasa didn’t agree with his predecessor was. “I joined in 2011. It is not true that there was no debt. Even the documents you (committee) have indicated debts from 2006” Paul Kihika said. The committee Vice Chairperson asked Winston Agaba, the current Managing Director whether he has seen Mugasa’s handover report, he responded in the negative.
The corporation also acquired two motor vehicles and six UHF transmitters on lease from Stanbic Bank in year 2008 and 2010 respectively amounting to USD 544,946. Management failed to provide documents regarding this transaction.
The committee then directed both former Managing Directors and their teams together with the current management to hold a meeting in the UBC Board room on 2nd of September 2016 and sort out the mess and allocate all the documents. It further directed that the proceedings of the meeting be submitted to the committee together with the attendance list.
The committee also questioned the laxity of the corporation in recovering the UGX 1.05bn which is in form of bad and doubtful debts. Edward Mugasa explained that UBC should be self-financing. He said “UBC is a business enterprise. It should not get money from government”. The committee directed the corporation’s management to task its legal department to see that this money is recovered.
The Auditor General also reported a wasteful payment of a sum of UGX 50.8m equivalent to USD 20,000 paid to an International Company for rights to broadcast 10 films from Hong Kong. The films were in Chinese but with English subtitles so they couldn’t be understood by the target population. The committee vice chairperson asked Paul Kihika who was the Managing Director then whether the transaction was cleared by the Board, but he couldn’t remember.
The committee handed over Paul Kihika to the Parliament Criminal Investigations Department to record a statement and also escort him to UBC offices to look for documents pertaining to this particular transaction by close of business. The vice chairperson said “We shall not allow Managing Directors to run Public Companies as if they are their homes. Even in homes there must be accountability”.
It was also found out that UBC has not been remitting tax to URA which amounts to UGX 960.8m. This has accumulated from way back in 2006. Still the corporation has outstanding obligation of 15% NSSF deduction since 2006, the money now amounts to more than UGX 7bn. Members of the Committee tasked the UBC management to ensure that workers savings are remitted.
The committee Vice Chairperson adjourned the meeting to 1st September 2016.