Meeting with National Housing and Construction Company (NHCC)
Discussed in the Committee on Commissions, Statutory Authorities and State Entreprises on October 26th, 2016
COSASE, has today October 26th 2016, held a meeting with NHCC led by Ambassador Agnes Kalibala, Director Housing, Ministry of Lands and Housing and Board Member NHCC and Parity Twinomujuni, the Managing Director. The meeting was chaired by Anita Among, Bukeadea District Woman Member of Parliament, who is the committee chairperson. The meeting considered the Auditor General’s Report on the entity for the year ending December 2014.
The audit queries considered include;
- Decrease in Fair Value of Crested Towers Building
The Auditor General reported that the company carried out repairs on Crested Towers Building worth UGX.597.8m. The subsequent internal revaluation by the Company of the same property resulted in a decrease in its fair value, from UGX.74.0 billion in the previous year to UGX.70bn.
The Managing Director informed the Committee that income from Crested Towers which is around 12bn to 14bn depending on the dollar currency- is prioritized for maintenance of the crested towers, payment of a bank loan and operations of crested tower.
The committee found out that the amount budgeted for repair was UGX 782 m and part of it was diverted for other activities including facilitating board meetings. It directed management to strictly expend income from crested towers as prioritized.
- Block making equipment
The Auditor General reported that in 2009, NHCC bought a block making plant at cost of USD 114,000. The machine’s capacity is 4,000 blocks per day. The Auditor General further observed that the operations manual for the equipment is in Chinese and thus couldn’t be used by machine operators. And by the time of audit in 2014, it had not been in operation for I year. Management explained that the machine has been under use until early last year. However, it is no longer operation and they are planning to decommission it.
The committee directed that the machine be decommissioned immediately. Management agreed and asked for 1 month to have the machine decommissioned.
- Failure to present procurement to a tender committee
Sec 8.3 of NHCC procurement manual provides that all procurement exceeding UGX 10m in value has to be approved by the tender committee. However, the audit observed that UGX 50m was paid to Kampala Serena for Hotel services without approval of the tender committee.
Management explained that they were requested to hire the hotel a day before the board meeting. They further added that for every board meeting, every member is entitled to Euros 500 for each sitting as per the resolution of the shareholders. The Board holds a minimum of 4 meetings annually. The board member (Kalibala Agnes) informed the committee that due to instability in Libya the 3 members of the board have not been turning up for board meetings which has affected quorum.
She further added that the Ugandan Minister of Finance has reconstituted the Ugandan Board Members who are always called for board meeting in case of urgent issues. However, the committee queried the legality of such meetings of only members of one shareholder (Government of Uganda) and whether their decisions are really binding to the company.
As a result, the committee directed management to revisit the sitting allowance, deeming it so high. It further resolved to strongly recommend to government to consider recapitalizing the company and take full charge of it as the only shareholder. It also resolved to send a select committee to NHCC to verify the assets.
The chairperson adjourned the meeting to tomorrow 9 am with Uganda Broadcasting corporation.