In Summary:
- The Ministry of Trade approved total annual operations budget is Shs2.2bn under non-wage recurrent.
- Shs8bn annual rent would increase non-wage cost by 364% and 4 times the cost of the Ministry’s wage bill.
- The Ministry decided to renovate, improve and add value to the Government owned Farmers House.
This patriotic website has investigated and corroborated documents detailing the events at the Ministry of Trade, Industries and Cooperatives, that resulted to saving of UGX8bn in annual rent.
DETAILS
The Ministry of Trade submitted a request for supplementary budget to the Ministry of Finance, Planning, and Economic Development (MoFPED) in the first quarter of FY 2021/2022. This request had critical unfunded priorities including revamping cooperatives, improvement of the staff working conditions by securing accommodation at a cost of UGX. 5billions among others.
The purpose was to improve the livelihood and working conditions of the staff at MTIC.
Whereas the issue of securing accommodation was such a critical and urgent issue, the funds were approved in the 1st quarter, in August 2021, however the Ministry of Finance, Planning, and Economic Development (MoFPED) made the actual release of the funds (UGX 5 billions) at the end of the financial year in April 2022 as part of fourth quarter cash limits at the 4th quarter, no procurement process for accommodation premises could be undertaken in such a short time.
This implied that the Ministry was constrained by time to carry out all necessary activities required to facilitate the procurement and expenditure of the funds before expiry of the financial year and also expected to absorb the said funds otherwise they would be returned to the Treasury as required by law under non-absorption of Funds.
The Ministry in the circumstances was left with two options; either: –
i. To proceed with the plan to procure the rental space for office accommodation from the two sources that had been explored thus; – thus Kingdom Hall Plots 31A-35A & 37A-39A along Nile Avenue with 5,093 square meters and King Square Building, Plot 9, Portal Avenue, Kampala.
The preferred property – Kingdom Hall quoted UGX 84,731.per square meter. The Ministry and her agencies had requested to occupy 5,000.square meters (current need) that would translate to UGX 423,655,399/= per month and UGX 5,083,864,788/= per annum. The expanded need after the Government rationalisation process would be 7,500 square meters requiring a total of UGX 8bn.
OR;
ii. To renovate, improve and add value to the Government owned premises, Farmers House which was built way back in 1964, by Lint Marketing Board. Note, that the electrical systems, plumbing systems, internet connectivity; doors, windows and other furniture fittings were in a sorry state putting Government documents and staff at a huge risk of fire and health related risks. This decision is a one-off expenditure that would save Government UGX 8bn in rent every year.
It should be noted that the whole Ministry operations are currently run on an approved annual budget of UGX 2,200,000,000/= under non-wage recurrent budget. Therefore, spending annually UGX 8bn in rent every year, representing an increase of non-wage cost by 364% and 4 times the cost of the Ministry’s wage bill alone. The increase in rent would not therefore be viable, nor sustainable in the face of budget cuts and rationalisation of government agencies to save public resources. The objective of improvement of staff livelihood that was intended would end up suffering but would however affordably be achieved even with renovations of existing work space at their Traditional Home of Farmers’ House, which was really the intended purpose of the funds.
In drawing from the requirement of great skill and competences expected of an Accounting Officer, it would only be wise decision to renovate as opposed to incur an annual expenditure of UGX 8bnin rent every year.
Having considered the above options, management felt it prudent to renovate the dilapidated Ministry Offices / Farmer’s House owned fully by the Government of Uganda under Uganda Property Holdings Ltd an institution which is under The President’s Office.
The following critical steps were under taken: –
i) The Ministry engaged Uganda Property Holdings Limited and signed a memorandum of understanding to undertake general overhaul of the Ministry premises and replace the plumbing; electrical, internet connectivity; doors, windows and furniture fittings and document cabinets that had all become obsolete. (Minutes of meetings available)
ii) Ministry engaged Ministry of Works and Transport, Office of the President and Ministry of Housing and Urban Development on the possibility of renovations and viability of farmers House Building to accommodate another floor, develop the drawings, undertake the structural integrity tests of the building, conducted feasibility studies and inspections, and come up with the bills of quantities which were used for the procurements of the Contractor. (correspondences attached available)
iii) The Ministry engaged the Ministry Finance, Planning and Economic Development dated 20th May, 2022, for authority to utilize these funds for renovations and overhaul of the Office space to create a cheaper and safer working environment for staff (supporting documents available).
It should be noted that there is no condemnation report by KCCA of Farmers House as Ministry of Works and Transport had established that the building was still in strong standing after producing a test report and a structural integrity report. (Copy of the Structural Integrity Report is available)
Upon establishing through a structural integrity test that Farmers house is in good standing and could even accommodate an extra floor, and applying the test of reasonable skill empowered on me by Section 45 of the Public Finance Management Act 2015, it only becomes reasonable to renovate the premises.
Also, it is important to note that the Government of Uganda is currently undertaking rationalisation of Government Agencies. In the next three years, under the RAPEX (Rationalisation of Government Agencies) program, MTIC shall be home to an additional 3 Government Agencies, to wit, Uganda Warehouse Receipting Systems Authority (UWRSA), Uganda Export Promotions Board (UEPB) and Uganda Free zones Authority (UFZA). This would mean that in addition to the 5,000 square meters initially quoted as needed, MTIC the Ministry would need an additional 1,615 to 2,500 square meters which would translate to more than UGX 8 billion spent on rent annually.
The whole purpose of rationalising of the Government Agencies was to save Government expenses of rent and Boards expenses. Would renting have been a cost-effective method? Would government be in fact rationalising resources? Would it achieve the purpose of rationalizing of the Government Agencies? Absolutely not.
In exercising a great degree of skill and diligence expected of an Accounting Officer under Section 45 (2) of the Public Finance Management Act 2015, it is only wise to renovate Farmers to not only save Government resources but have premises in good standing, cheap enough to not be costly to tax payers and in turn achieve the government Program of rationalization of Government Agencies in its true spirit.
