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1VALUE FOR MONEY AUDIT REPORT ON THE PERFORMANCE OF THE COMMUNITY AGRICULTURAL

INFRASTRUCTURE IMPROVEMENT PROGRAMME (CAIIP I &II) | A REPORT BY THE AUDITOR GENERAL

OFFICE OF THE AUDITOR GENERAL

T H E R E P U B L I C O F U G A N D A

M A R C H , 2 0 1 3

VALUE FOR MONEY AUDIT REPORT ON THE PERFORMANCE OF

THE COMMUNITY AGRICULTURAL INFRASTRUCTURE IMPROVEMENT PROGRAMME (CAIIP I &II)

A REPORT BY THE AUDITOR GENERAL

www.oag.go.ug | E-mail: [email protected]


VALUE FOR MONEY AUDIT REPORT ON THE PERFORMANCE

OF THE COMMUNITY AGRICULTURAL INFRASTRUCTURE IMPROVEMENT

PROGRAMME (CAIIP I &II)

A REPORT BY THE AUDITOR GENERAL

MARCH, 2013


12th June, 2013

The Rt. Hon. Speaker of ParliamentParliament of UgandaKampala

VALUE FOR MONEY AUDIT REPORT ON THE PERFORMANCE OF THE COMMUNITY AGRICULTURAL INFRASTRUCTURE IMPROVEMENT PROGRAMME (CAIIP I & II)

In accordance with Article 163 (3) of the Constitution, I have undertaken a value for money audit on the Performance of the Community Agricultural Infrastructure Improvement Programme (CAIIP I & II) and hereby submit this report.

My office intends to carry out a follow – up at an appropriate time regarding actions taken in relation to the recommendations in this report.

I would like to thank my staff: The Director, Mr Stephen Kateregga and Assistant Director Liz Nambuya; and team Bob Monday – Senior Principal Auditor, Paul Rwabutara Principal Auditor, Henry Mutegeki Senior Auditor, the two VFM auditors: Esther Akurut and Raphael Olowo and the five Engineering auditors: Arthur Kasozi, Roselyn Mawanda, Bruno Ruberwa, Robert Okee and Dennys Muhesi who undertook this audit. I would also like to thank the staff of Ministry of Local Government charged with the implementation of CAIIP Project for the assistance offered to my staff

during the period of the audit.

John F. S. MuwangaAUDITOR GENERAL

AUDITOR GENERALAUDITOR GENERAL’S MESSAGE

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TABLE OF CONTENTS

i

List of Tables ....................................................................................................................................................... iiList of Pictures .................................................................................................................................................... iiList Of Abbreviations .......................................................................................................................................... iii

Executive Summary ………………………………………………………………………......................………………..................…….... iv

CHAPTER ONEINTRODUCTION ................................................................................................................................................... 21.1 Motivation .................................................................................................................................................. 21.2 Description of the Audit Area ................................................................................................................... 31.3 CAIIP Goal, Objectives and Outputs .......................................................................................................... 3 1.4 Funding ...................................................................................................................................................... 41.5 Audit Objective .......................................................................................................................................... 41.6 Scope ......................................................................................................................................................... 4

CHAPTER TWOMETHODOLOGY ................................................................................................................................................... 62.1 Sampling ................................................................................................................................................... 62.2. Document review ...................................................................................................................................... 62.3 Interviews .................................................................................................................................................. 62.4 Observation/Field Inspections .................................................................................................................. 6

CHAPTER THREESYSTEM AND PROCESS DESCRIPTION ........................................................................................................... 83.1 Roles and Responsibilities of Key Players ............................................................................................... 83.1.1 Development Partners (ADB and IFAD) ................................................................................................... 83.1.2 The Inter-ministerial Policy Committee (IPC) ......................................................................................... 83.1.3 Ministry of Finance Planning and Economic Development ..................................................................... 83.1.4 Ministry of Local Government .................................................................................................................. 83.1.5 The Programme Facilitation Team (PFT) ................................................................................................. 83.18 The Districts .............................................................................................................................................. 83.1.7 The Sub-counties ...................................................................................................................................... 93.1.8 The Community ......................................................................................................................................... 93.2 Process description .................................................................................................................................. 93.2.1 Planning .................................................................................................................................................... 93.2.2 Funds Disbursement ................................................................................................................................ 93.2.3 Funds Flow Process ................................................................................................................................. 103.2.4 Procurement process .............................................................................................................................. 113.2.5 Project Implementation .......................................................................................................................... 123.2.6 Monitoring and Evaluation ...................................................................................................................... 12

CHAPTER FOURFINDINGS, CONCLUSIONS AND RECOMMENDATIONS .................................................................................. 154.1 Road Conditional Surveys, Inventories And Designs ............................................................................. 154.1.1 Inadequate Roads Designs ..................................................................................................................... 154.1.2 Inconsistencies in the Bills of Quantities (BOQs) .................................................................................. 174.2 Establishment Of Infrastructure ............................................................................................................ 184.2.1 Establishment of Infrastructure on registered Public Land ................................................................. 184.2.2 Quality of works and workmanship ........................................................................................................ 194.2.3 Quantity Verification ................................................................................................................................ 234.3 Completion of Projects ........................................................................................................................... 244.4 Operation and maintenance of established infrastructure ................................................................... 274.4.1 Occupancy of Markets ............................................................................................................................ 274.4.2 Functionality of Agro Processing Facilities (APFs) ................................................................................ 294.4.3 Maintenance of infrastructure ................................................................................................................ 31GLOSSARY OF TERMS ....................................................................................................................................... 34

APPENDICES ..................................................................................................................................................... 35

VALUE FOR MONEY AUDIT REPORT ON THE PERFORMANCE OF THE COMMUNITY AGRICULTURAL INFRASTRUCTURE IMPROVEMENT PROGRAMME (CAIIP I &II) | A REPORT BY THE AUDITOR GENERALii

Table 1: CAIIP Funding………………………………………...........................…………………………………...…………………4

Table 2: Occupancy Status of Markets visited………………...........………………………...............……………………28

Figure 1: Flow Diagram for Funds Flow Process – CAIIP…………..........................…………………………………11

Picture 1: Rock along the road route on Longot – Sobezi road ……………...............…............………………… 15

Picture 2: Ntunda Market in Mukono District…………………………………..............................………………………. 20

Picture 3: Lwebitakuli Market in Sembabule District……………………………….............................……………… 20

Picture 4: Showing dissimilar iron sheet material for the same roof…………........................……………..… 20

Picture 5: Cracking of slab for Mityoru Market in KaptanyaKaphorwa District………….……..................... 20

Picture 6: Damaged latrine slab that has failed at Katosi market……………………………….......................... 20

Picture 7: Failed tank platform at Maanyi market……………………………………………………..........................… 20

Picture 8: Showing good road surface condition………………………………………………………............................. 21

Picture 9: Showing bad road surface condition………………………………………………………............................… 21

Picture 10: Damaged culvert that has given way due to inadequate back filling at Ch 2+600

on Lwengo – Kyawagonya road...................…………………………………………….............................… 22

Picture 11: Cracked culverts on Akopor-Kamuli road in Tororo District……………………….......................... 22

Picture 12: Broken Culvert End Structures on Kakule-kameruka road in Budaka District .................... 22

Picture 13: Chebukat – Kaptokwoi road…………………………………………………………………..............................… 25

Picture 14: Kashabul – Mokotu road surface conditions……………………………………………............................. 25

Picture 15: Molok – Toiwo road…………………………………………………………………………….................................… 25

Picture 16: Kaplak – Water source road surface conditions………………………………………............................. 25

Picture 17: Unoccupied market structures in Katosi Market in Mukono District……………....................... 27

Picture 18: Bukulula Market in Masaka District………………………………………………………...........................…. 27

Picture 19: Informal market operational in the neighbourhood…………………………………............................ 27

Picture 20: New market facilities abandoned by the vendors……………………………………..........................… 27

Picture 21: Vandalised transformer at Bukulula Market …………………………………………........................... 28

Picture 22: Kids playing and Animals grazing in Kapuyansi market……………………………........................... 28

Picture 23: Milk cooler in the compound of Kiganda Subcounty headquarters……………........................… 30

Picture 24: Silted culvert along Nsambya – Lugusulu Road in Sembabule……………………........................ 32

Picture 25: Section with overgrown vegetation along Radio Uganda – Nasuleta Road

In Pallisa District …………………………………………………………………………………………………….............. 32

Picture 26: Overgrowth of vegetation at Katosi Market in Mukono …………………………..........................….. 32

Picture 27: Peeling off of paint at Kapunyas market in Petete……………………………………............................ 32

LIST OF TABLES

LIST OF FIGURES

LIST OF PICTURES

VALUE FOR MONEY AUDIT REPORT ON THE PERFORMANCE OF THE COMMUNITY AGRICULTURAL INFRASTRUCTURE IMPROVEMENT PROGRAMME (CAIIP I &II) | A REPORT BY THE AUDITOR GENERAL

LIST OF ABBREVIATIONS

iii

AAMP Area based Agricultural Modernization Program

ADB African Development Bank

ADF African Development Fund

AWPB Annual Work Plan and Budget

BoU Bank of Uganda

CAIIP Community Agricultural Infrastructure Improvement Programme

CAO Chief Administrative Officer

CBOs Community Based Organizations

CDA Community Development Advisor

CDO Community Development Officer

DEO District Environment Officer

DFID Department For International Development

DLSP District Livelihoods Support Programme

DTPC District Technical and Planning Committee

DUCARIP District Urban Community Access Roads Investment Plans

EIA Environmental Impact Assessment

GDP Gross Domestic Product

GoU Government of Uganda

ICB International Competitive Bidding

IFAD International Fund for Agricultural Development

IPC Inter-Ministerial Policy Committee

LGSIP Local Government Sector Investment Plan

M & E Monitoring and Evaluation

MoFPED Ministry of Finance, Planning and Economic Development

MoLG Ministry of Local Government

NAADS National Agricultural Advisory Services

NARO National Agriculture Research Organization

NCB National Competitive Bidding

NEMA National Environmental Management Authority

NGOs Non-governmental Organizations

NUSAF Northern Uganda Social Action Fund

PA Programme Accountant

PC Programme Coordinator

PEAP Poverty Eradication Action Plan

PFT Programme Facilitation Team

PMA Plan for Modernization of Agriculture

POM Program Operational Manual

PPDA Public Procurement and Disposal of Public Assets Authority

PSO Program Support Officer

PY Project Year

SDR Special Drawing Rights

UA Unit of Account


BACKGROUNDThe Auditor General is required under Article 163 (3) (b) of The Constitution of the Republic of

Uganda to conduct financial and value for money audits in respect of any project involving public

funds. This mandate is amplified by Section 21(1) of the National Audit Act 2008 which requires

the Auditor General to carry out value for money audits for purposes of establishing economy,

efficiency and effectiveness in the operations of any department or ministry.

The Community Agricultural Infrastructure Improvement Programme (CAIIP) was formulated in

2006. The programme is geared towards enhancing rural development through increased market

access, improved agricultural productivity and growth across the country.

Agriculture has for a long time been a core sector of Uganda’s economy in terms of its contribution

to Gross Domestic Product (GDP) and employment. The sector’s performance has not been

impressive in recent years. The real growth rate in agriculture output declined from 7.9% in the FY

2000/01 to 0.1% in the FY 2006/071.

This has mainly been due to constraints, such as: inadequate physical infrastructure, limited

extension support, high risks and cost of investment, inadequate meteorological services, among

others.

Government, in a bid to address the inadequate physical infrastructure challenges in the agricultural

sector, formulated the Community Agricultural Infrastructure Improvement Programme (CAIIP) in

the year 2006. The project is funded by a loan from the African Development Bank (ADB) and the

International Fund for Agricultural Development (IFAD), to a tune of USD 77.0 million (CAIIP 1) and

USD 70.0 million (CAIIP 2).2

Despite the heavy investment in the project by Government, there are reports of abandoned market

and road construction sites, substandard road works, unutilized market and agro-processing

facilities, among others3.

The Office of the Auditor General deemed it necessary to conduct a value for money audit to assess

the implementation of the Community Agricultural Infrastructure Improvement Program.

1 UBOS 2008 Statistical Abstracts.2 Project Loan Agreements.3 OAG Financial Audit Report Dec. 2011

EXECUTIVE SUMMARY

iv


KEY ISSUES AND RECOMMENDATIONS

a) Inadequate Roads Designs:

A review of the designs/working drawings revealed that the designs for the roads were prepared

in accordance with the Ministry of Works and Transport guidelines for district roads based on

the classes required. However, the audit revealed that some roads were under designed in that

they left out key road features like bridges. For example, in Kabei sub county, Bukwo district, the

initial plan as per designs by the consultants was to construct five (5) roads (21.5km) at a cost

of Shs.989,682,703 without bridge works. However, during project implementation, bridge works

were found to be necessary on 2 roads (Lorok – Kapses -3no bridges and Makutano – Kapkoros

-1no bridge) hence re-scoping the works.

b) Completion of Projects:

It was established that most of the contractors for markets, roads and Agro Processing Facility

shelters had delayed to complete works. Analysis of 12 selected contracts for construction of

markets in 7 districts revealed that 17% of the contracts were completed within the stipulated

time. However, 75% experienced an average delay of 8 months while 8% of the sites had been

abandoned. Site inspection further revealed that some projects had been abandoned for more than

28 days without the authorization of the responsible officer/Project Manager, yet the works had not

been completed.

c) Establishment of Infrastructure on registered Public Land:

The audit established that all the 12 market sites valued at Shs.1,318,402,547 visited in the

districts of Iganga, Mukono, Mityana, Masaka, Sembabule, Pallisa, Kapchorwa were established

on land without proper ownership (untitled land) contrary to the programme operations manual

and market guidelines.

d) Quality of works and workmanship:

Although the completed works should have met the quality specifications in the contract

(Conditions of Contract, Clause 16), the physical inspection of the infrastructural works revealed

that the quality of works varied from good to bad.

e) Quantity Verification:

A review of the Bills of Quantities (BOQs) and Interim payment certificates (IPCs) revealed that

payments worth Shs.307,627,262 were made in respect of quantities over and above the actual

works executed. Further scrutiny of IPCs and subsequent physical inspections revealed that on

four (4) road contracts, payments amounting to Shs.63,471,015 had been made for works not

executed at all.

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Recommendations

Inadequate Roads Designs:

Management should ensure that contractors are strictly supervised during the design period and

designs should be reviewed for appropriateness before approval.

Completion of Projects:

Management should invoke the relevant contract clauses for timely execution of contracts, such

as, charging liquidated damages and termination of contracts in extreme cases.

Establishment of Infrastructure on registered Public Land:

CAIIP management should ensure that all programme implementing sub counties secure land

titles for the land on which project infrastructure was established.

Quality of works and workmanship:

The project managers should always ensure that the contractors adhere to the required

specifications. Works that do not meet the required technical specifications should not be paid for.

Quantity Verification:

Management should enforce recovery of the funds from the contractors in respect of works not

executed at all and for quantities above the actual.

Management should also ensure that Interim Payment Certificates (IPCs) are always accompanied

by measurement sheets, which should be checked for all contract works executed.

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2VALUE FOR MONEY AUDIT REPORT ON THE PERFORMANCE OF THE COMMUNITY AGRICULTURAL INFRASTRUCTURE IMPROVEMENT PROGRAMME (CAIIP I &II) | A REPORT BY THE AUDITOR GENERAL

INTRODUCTION

1.0 BackgroundThe Community Agricultural Infrastructure Improvement Programme (CAIIP) was formulated in

2006.The programme is geared towards enhancing rural development through increased market

access, improved agricultural productivity and growth across the country. The programme is being

implemented in phases/projects (CAIIP I and CAIIP II: CAIIP I in 34 districts in central and eastern

Uganda covering 78 sub-counties (3 sub- counties per the original 26 districts) and the implementation

period is 2008 to 2013. CAIIP II, whose implementation period is 2009 to 2014, covers 65 sub-counties

in 15 districts in northern Uganda and Teso sub-region and also undertakes further deepening of the

programme interventions in 32 new sub-counties within the 26 districts of CAIIP I.

1.1 MotivationAgriculture has for a long time been a core sector of Uganda’s economy in terms of its contribution to

GDP and employment. By 2005, it employed 73 percent of the labour force (UBOS, 2005) and currently,

the sector employs over 80 percent of Uganda’s working population4. The sector’s performance has

not been impressive in recent years. The real growth rate in agriculture output declined from 7.9% in

2000/01 to 0.1% in 2006/075 (UBOS, 2008)

This has mainly been due to constraints, such as: inadequate physical infrastructure, limited extension

support, high risks and cost of investment, inadequate meteorological services, among others.

Government in a bid to address the inadequate physical infrastructure challenges in the agricultural

sector, formulated the Community Agricultural Infrastructure Improvement Programme (CAIIP) in

the year 2006. The programme is geared towards enhancing rural development. It seeks to improve

rural agricultural infrastructure through rehabilitation of district feeder and community access roads

which link farmers to functional markets, equipped with adequate facilities, including stalls, slabs,

stores, agro-processing facilities, water and sanitation and rural energy6.

The project is funded by a loan from the African Development Bank (ADB) and the International Fund

for Agricultural Development (IFAD) to a tune of USD 77.0 million (CAIIP I) and USD 70.0 million (CAIIP

II).7

4 National Development Plan (2010/11 – 2014/15)5 UBOS 2008 Statistical Abstracts.6 CAIIP I & II Appraisal Reports.7 Project Loan Agreements.

CHAPTER ONE



Uganda covering 78 sub-counties (3 sub-

counties per the original 26 districts) and its

implementation period is 2008 to 2013.

CAIIP II covers 65 sub-counties in 15 districts

in northern Uganda and Teso sub-region

and also undertakes ‘further deepening of

the programme interventions in 32 new sub-

counties within the 26 districts of CAIIP I and

its implementation period is 2009 to 2014.

1.2.2 Legal FrameworkCAIIP derives its mandate from the approval

of the programme by Parliament and the

loan agreements between the Development

Partners (ADB and IFAD) and the Government

of Uganda.

1.3 CAIIP Goal, Objectives and OutputsOverall programme goal:

The overall goal of CAIIP is to contribute to

poverty reduction and economic growth in

Uganda through enhanced commercialization

of agriculture.

Specific Objectives:-

• To enhance farmers’ access to markets.

• To attract competitive prices of farmers’

produce.

Project Outputs

• Improvement of existing community access

roads and rehabilitation of district roads.

• Improvement of sub county market place

infrastructures.

• Promotion of agro-processing by procuring

and installing grain mills, rice hullers, coffee

hullers and milk coolers.

Despite the heavy investment in the project by

Government, there are reports of abandoned

market and road construction sites,

substandard road works; un utilized market

and agro-processing facilities, among others8.

The Office of the Auditor General deemed

it necessary to conduct a study to ascertain

the challenges in the management of the

Community Agricultural Infrastructure

Improvement Program, analyse

their underlying causes and suggest

recommendations for improvement..

1.2 Description of the Audit Area General Description

The Community Agricultural Infrastructure

Improvement Programme (CAIIP) was

formulated in 2006.The programme is geared

towards enhancing rural development

through increased market access, improved

agricultural productivity and growth across

the country.

CAIIP is geared towards enhancing rural

development. The project seeks to improve

rural agricultural infrastructure through

rehabilitation of district feeder and community

access roads which will link farmers to

functional markets, equipped with adequate

facilities, including: stalls, slabs, stores, agro-

processing facilities, water and sanitation and

rural energy9.

The programme is being implemented

in phases/projects (CAIIP I and CAIIP II:

CAIIP I in 34 districts in central and eastern

8 OAG Financial Audit reports Dec. 20119 CAIIP -1 & 2 Project Appraisal Reports


• Rural electrification of the market places.

• Mobilisations of communities in order to create awareness about the programme and enable

the communities to participate actively in the inventorization, prioritization, selection and

implementation of their local area infrastructure interventions.

1.4 FundingThe programme (CAIIP I & II) is financed by the African Development Bank (ADB) and the

International Fund for Agricultural Development (IFAD) loans and Government of Uganda (GoU)

contribution. During the period under review, CAIIP I was funded to the tune of Shs.102.4 billion,

whereas CAAIP II attracted funding of Shs.42.3 billion, mainly from ADB, as shown in Table 1 below.

Table 1: CAIIP Funding for the period 2009/10 to 2011/12

CAIIP IFinancialYear

ADB IFAD GoU Total

Amount Shs. (BILLIONS)

2009/10 38.772 4.911 0.288 43.971

2010/11 21.155 21.079 0.109 42.343

2011/12 10.076 5.840 0.168 16.084

TOTAL 70.003 31.83 0.565 102.398

CAIIP II Amount Shs.(BILLIONS)

2009/10 2.199 00 00 2.199

2010/11 12.064 00 0.208 12.272

2011/12 27.737 00 0.095 27.832

TOTAL 42.000 0 0.303 42.303

Source: CAIIP Audited Accounts FY 2009/10, 2010/11 and 2011/12

1.5 Audit ObjectiveThe overall audit objective was to assess the performance of Community Agricultural Infrastructure

Improvement Programme projects (CAIIP I and II); and the specific audit objectives were:

• To establish whether the planned agricultural infrastructure was put in place in accordance with

the desired standard specifications/guidelines.

• To ascertain whether the established infrastructure was put to the intended purpose.

1.6 ScopeThe study was carried out at the Ministry of Local Government (MoLG) Headquarters in Kampala

and selected CAIIP implementing districts of Butaleja, Iganga, Kamuli, Mbale, Pallisa, Tororo

and Kapchorwa in the East; Gulu, Amuru, Kitgum and Lira in the North; and Masaka, Mityana,

Mubende, Mukono and Sembabule in the central regions of the country.



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METHODOLOGY

The audit was conducted in accordance with International Organization of Supreme Audit

Institutions (INTOSAI) Auditing Standards and OAG VFM Audit Manual. Those Standards require

that a VFM 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. In collecting data

from the field, the team reviewed documents, carried out interviews and physical inspection/

observation of the facilities.

CHAPTER TWO

2.1 SamplingStratified sampling was used to select the

regions: northern, central and eastern. From

these regions, simple random sampling was

used to select specific districts as follows:

Amuru, Gulu, Lira and Kitgum in northern

region; Masaka, Sembabule, Mityana,

Mubende and Mukono in central region;

Iganga, Namutumba, Budaka, Pallisa,

Butaleja, Tororo, Manafwa, Bududa, Sironko

and Kapchorwa in eastern region.

2.2. Document reviewThe team obtained and reviewed the

documents to obtain information relating

to financing, legal framework/mandate of

the Community Agricultural Infrastructure

Improvement Programme (CAIIP), key

processes, financial performance, and vision,

mission, objectives, and activities for the

period under review. A list of documents

reviewed is attached as Appendix i.

2.3 InterviewsThe audit team conducted interviews with five

(05) officers of the CAIIP project Facilitation

Team (PFT) at the Ministry headquarters. The

audit team also interviewed Program Support

Officers, sub county chiefs and IMC members

in Sixteen (16) of the CAIIP implementing

districts visited. Details of the interviews

conducted are in Appendix ii.

2.4 Observation/Field InspectionsField visits were carried out in the sampled

CAIIP implementing districts where project

activities, including market construction and

roads works were undertaken. The inspections

were undertaken to assess the quality and

progress of works and, during inspections,

photographs of CAIIP project sites were taken

to support the audit observations made in the

report.



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SYSTEM AND PROCESS DESCRIPTION

3.1 Roles and Responsibilities of Key Players

3.1.1 Development Partners (ADB and IFAD)These are the Development Partners from

which the Government of Uganda secured the

programme funding.

3.1.2 The Inter-ministerial Policy Committee (IPC)This is a committee comprising the

MoLG as the chair, Ministry of Works and

Transport (MoWT), Ministry of Agriculture

Animal Industry and Fisheries (MAAIF),

Ministry of Gender, Labour and Social

Development (MGL&SD) and Ministry of

Water and Environment (MWE); Ministry of

Tourism, Trade and Industry (MTTI), National

Environmental Management Authority

(NEMA), Rural Electrification Agency (REA)

and the Plan for Modernization of Agriculture

(PMA). It provides policy guidance to project

management and works to resolve problems

that might arise during implementation. The

line ministries render policy and technical

advice of their portfolios or sectors through

the IPC and PFT.

CHAPTER THREE 3.1.3 Ministry of Finance Planning and Economic DevelopmentThe Ministry of Finance Planning and

Economic Development (MoFPED) secured

the funding on behalf of the Government of

Uganda, signed the loan agreements and is

also responsible for the release of funds and

monitoring of the loan portfolio.

3.1.4 Ministry of Local GovernmentThe MoLG is the Executing Agency for

the programme. Actual programme

implementation is undertaken at the

district and sub-county levels within the

frame work established by the government

for decentralized administration and

development.

3.1.5 The Programme Facilitation Team (PFT)This team is responsible for the day-to-

day coordination and monitoring of the

programme activities. It is charged with the

overall administration and management

of the project, liaison with the ADF, IFAD,

districts and sub-counties, providing technical

support and guidance to the districts, sub-

counties and involved NGOs, to facilitate

setting up and compliance with appropriate

financial management, accounting, auditing

and reporting procedures at district and sub-

counties, consistent with the national system,

among other roles.

3.1.6 The DistrictsThe Implementation of programme activities

is carried out through existing structures

of the district. The district CAO assigns

a Programme Support Officer (PSO) at

the district level who coordinates the



implementation and technical supervision of

the programme in their respective areas; and

the District Technical Planning Committees

mainstream the implementation of CAIIP in

their normal work plans, annual budgets and

programmes.

3.1.7 The Sub-countiesEach CAIIP implementing sub-county, under

the control of the sub county chief, carries

out a programme of community mobilization

and participatory planning and prioritization

of the rural infrastructure investments,

thereby ensuring community ownership

and promoting sustainability throughout the

life of the programme. Community leaders,

leaders of interest groups and members of

group management committees are involved

in awareness creation and community

mobilization, participatory planning and

assessments of programme effectiveness.

3.1.8 The CommunityThe programme has established

Infrastructure Management Committees

(IMCs). The IMCs sensitize fellow community

members to ensure their full participation in

prioritization, selection and implementation

of the local area infrastructure interventions

by the programme. The community also

monitors the progress of implementation of

the prioritized infrastructure.

3.2 Process descriptionCAIIP activities are implemented as described

below:-

3.2.1 PlanningPlanning of rural infrastructure investments

follows a series of participatory steps aimed

at continual close consultation with the

beneficiaries. Agreements are reached on

matters, such as: design, cost and cost

sharing, task responsibilities and organization

during implementation and on completion,

thereby maintaining “ownership” of the entire

process by the beneficiary community.

Each eligible sub-county, under the control

of the sub-county chief, carries out a

programme of community mobilization

and participatory planning resulting in the

identification of infrastructure priorities

to be included in the sub county workplan

which is eventually submitted to the PSO

at the district. The PSO consolidates all the

sub county work plans and submits a report

to PFT to be integrated in the CAIIP Annual

work plan. PFT then communicates the CAIIP

activities to the implementing districts to have

them (activities) included in their annual work

plans and budgets.

3.2.2 Funds DisbursementFor both ADB and IFAD, after the initial

deposits, subsequent transfers from the

Loan Accounts to the Special Accounts is

achieved through regular replenishments

backed by supporting documents of previous

expenditure, submitted by PFT to donors.

Similarly, transfers of funds to the Programme

District Accounts by PFT, is on a quarterly

basis upon submission by districts and

approval by PFT; of accountability for at least

50% of the preceding deposit and district

activity plans for the subsequent quarter.

In order to ensure a prompt replenishment

process, timelines for submission of

accountabilities by both PFT (to donors) and

Districts (to PFT) are in place.


3.2.3 Funds Flow ProcessCAIIP loan funds are kept on the respective

loan accounts denominated in UA and SDR

for the ADB and IFAD loans, respectively.

Withdraws from the loan accounts to the

respective Special Accounts are done by way

of submitting withdrawal applications (WAs) by

PFT and signed by the Permanent Secretary/

Secretary to Treasury, MoFPED, who is the

authorised signatory.

Funds from the Loan Accounts will be deposited

by the donors to special accounts maintained

in US Dollars in the Bank of Uganda for ADB

and IFAD loan proceeds, respectively. The GoU

counterpart cash contributions to cover local

costs of its obligations under the programme

are also deposited in these accounts.

Funds are transferred from the Programme

Special Accounts to the Programme Shs.

Account in the Bank of Uganda against

Approved Work Plans and Budgets submitted

by PFT to the donors for review and approval.

The GoU counterpart contribution to cover

local costs of its programme obligations are

also deposited on this account.

Funds are transferred by PFT from the

Programme Account against Approved District

Quarterly Work Plans and Budgets to the

District Programme Account, maintained in an

approved branch of a commercial bank in the

district, to finance the approved programme

activities at the district and in the participating

Sub-Counties, excluding the planned activities

that will be directly paid for from the loan

accounts and or from the PFT Programme

account.

For both IFAD and ADB, the authorised

signatories to Special Accounts and

Programme Accounts, respectively are the

Permanent Secretary MoLG, the Programme

Facilitator and Financial Controller; and these

are responsible for effecting payments.

The authorised signatories to the District

Programme Accounts are the Chief

Administrative Officers (CAO), Chief Finance

Officers (CFO) and district Programme Support

Officer (PSO).

Payments to contractors carrying out civil

works (Feeders Roads), Agro-Processing

Facilities (APFs) and procurement of bulk

goods namely: programme vehicles, is effected

by the Direct Payment Method.

Payments to contractors for Community Access

Roads (CARs) and markets is done through the

special account method whereas payment for

expenditures related to items imported by the

Programme such as APFs is through letters of

credit for the IFAD loan.



Figure 1: Flow Diagram for Funds Flow Process – CAIIP

KEY:

UA: Units of Account

APFs: Agro-Processing Facilities

CARs: Community Access Roads

BOU: Bank of Uganda

SHS: Uganda Shillings

USD: United States Dollars

SDR: Special Drawing Rights

3.2.4 The Procurement ProcessAll procurement of goods, works and acquisition of consulting services financed by the ADB should

be undertaken in accordance with the Bank’s Rules of Procedure for Procurement of Goods and

Works or, as appropriate, Rules of Procedure for the Use of Consultants, using the relevant Bank

Standard Bidding Documents.

The procurement of goods financed by IFAD should follow the provisions of the “Procurement

Guidelines of the International Fund for Agricultural Development (IFAD)”.

Local shopping (procurements of office supplies and general costs) applies to relatively inexpensive

items, such as: office supplies and general expenses (less than US$ 20,000). The key feature of

this procurement procedure is invitation and comparing of at least three quotations from eligible

suppliers. The steps required under this procurement method are similar to Micro procurements

under the PPDA regulations. The local shopping method is appropriate in this case as there are

many suppliers to ensure a competitive procurement process and adequate supplies are available

in the local market.

All Programme Civil Works contractors are procured using the National Competitive Bidding (NCB)

LOAN ACCOUNTS(UA or SDR)

SPECIAL PROGRAMME SPECIAL ACCOUNT IN BOU (USD)

GOU COUNTER PART CONTRIBUTION

PROGRAMME ACCOUNTIN BOU (UGX)

SPECIAL A/C PAYMENT METHOD

(CARs, Markets)

DIRECT PAYMENT METHOD(APFs, Feeder Roads, Vehicles)

DISTRICT PROGRAM ACCOUNTS (UGX).


method and for the Technical assistance staff

(consultants) under the project are hired in

accordance with the Government procedures

acceptable to the Donors. The individuals to

be recruited should have qualifications, terms

of reference and conditions of employment

satisfactory to the Donors.

3.2.5 Project ImplementationThe PFT is charged with the overall

administration and management of the project

and is responsible for the following, among

others: Coordination at the national level with

the IPC members and any other development

partners, Liaison with the ADF, IFAD, Districts

and Sub-counties, providing technical support

and guidance to the districts, sub-counties

and involved NGO’s.

Much of the programme implementation

takes place simultaneously at the District

and Sub-county local Governments. The Chief

Administrative Officer (CAO) designates one

officer to undertake the role of coordinating

the programme implementation in the

district, ensuring that the programming is

integrated within the district development

plans, consolidating sub-county work plans,

district AWPB and presented to the District

Technical Planning Committee (DTPC) and

defended at the planning, budget meetings.

The plans are eventually submitted to the PFT,

which liaises with the departments whose

sectors are related and relevant to CAIIP,

for instance, Engineering, Production and

Marketing, Community Development, Natural

Resources, Information and Planning, among

others. A Finance officer is also identified

and assigned to handle the project financial

management, records, accountability and

AWPB under the close supervision of the CFO

and the PSO. The finance officer liaises with

the sub-county Accountant and Sub-county

Chiefs on financial matters of the programme.

The administration of the selected sub-

county has to plan and develop strategies

of ensuring that they tap effectively the

project activities. The Sub-county Technical

Planning Committee (SCTPC), under the

Chairmanship of the Sub-county Chief, has

to start by understanding and internalizing

the CAIIP objectives and targets. This will be

through participating in start-up workshops,

mobilization and sensitization programmes

and accessing the POM and any other

literature that may be issued from time to

time.

3.2.6 Monitoring and EvaluationThe purpose of Monitoring and Evaluation

(M&E) is to track performance and progress

of the various project components and

activities of the programme in comparison

with the set targets in the AWPs &Bs for that

year. CAIIP M&E system was designed to be

highly participatory; it places the monitoring

responsibilities to the different stakeholders

as described below.

Ministry of Local Government

The Ministry of local Government, supervised

by the Permanent Secretary, monitors the

overall operations for planning and facilitation

purposes for the rural infrastructure for

attainment of project objectives, while MOWT

monitors the implementation of the roads

infrastructure for the attainment of national

objectives.

Programme Facilitation Team

The PFT as the programme advisory body is



responsible for ensuring that the respective

departments across the CAIIP districts

adopt and follow appropriate monitoring

mechanisms, processes and procedures.

The PFT supports the districts to establish

meaningful and measurable indicators

during the start-up phase so that suitable

means of data collection can be built into

the programme activities. The PFT team also

monitors and evaluates the overall impact of

the project and compiles the projects quarterly

and annual reports for dissemination to

the following stakeholders: ADB and IFAD,

MOFPED and Districts.

District Level Monitoring

District authorities monitor the activities,

inputs and output achievements in their

respective areas. The program support

officers at the district monitor activities,

inputs and outputs achievements in their

respective areas, coordinate and develop

systems at the district and sub-county

levels, ensuring harmonization with other

district monitoring processes to improve

the efficiency of information collection while

avoiding the duplication of monitoring tasks.

The sub-county administrations monitor

projects against stated targets and, in addition,

coordinate M&E capacity building efforts for

the sub-county. The sub-counties also ensure

that data collection processes, procedures

and responsibilities are adhered to and

reporting is undertaken in accordance with

the design of the respective CAIIP activities.

Community Interest Groups monitor sub-

county activities and investigate performance,

supported by service providers.


CHA

PTER

FO

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CH

AP

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FO

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4



FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

4.1 Road conditional surveys, inventories and designs

4.1.1 Inadequate Roads DesignsAccording to the Terms of Reference for the consultancy contract for the design of 3,120kms

of community access roads; and for the design and supervision of 560kms of feeder roads, the

consultant, M/S Arch Design Limited, was required to carry out road inventories and conditional

assessment surveys, design and preparation of tender documents for both community access

roads and feeder roads.

A review of the designs/working drawings revealed that the designs for the roads were prepared

in accordance with the Ministry of Works and Transport guidelines for district roads based on

the classes required. However, the audit revealed that some roads were underdesigned in that

they left out key road features like bridges. For example, in Kabei sub county, Bukwo District, the

initial plan, as per designs by the consultants, was to construct five (5) roads (21.5km) at a cost of

Shs.989,682,703 without bridge works. However, during project implementation, bridge works were

found to be necessary on 2 roads (Lorok – Kapses -3no bridges and Makutano – Kapkoros -1no

bridge), hence, re-scoping the works. This led to the cancellation of construction works on two

roads and reduction of the scope of the remaining three roads. The amount reallocated from the

planned works to cater for additional scope was Shs.566,000,000 but the contract price remained

constant.

In a related case, the item of rock blasting was not provided for during the design of Longot –Sobezi

road in Sisiyi Sub County in Sironko district and Molok – Toiwo road in Kapchorwa District. During

the implementation, the rock in Kapchorwa District became an obstruction to the contractor and

hence works were terminated at the point of the rock, whereas, in Sironko, the road was narrowed

to fit in the small space manually dug out on the rock sides by the local people as indicated in

Picture: 1 below:

Picture 1: Rock a long the road route on Longot – Sobezi road


Inadequate designs were caused by the

failure of the consultants to carry out

proper road inventories to establish detailed

road conditions. It was also noted that the

consultant, in some cases, did not engage the

district staff during the inventory and design

process and review.

Management attributed the inadequacy in

the designs to the fact that the consultant

was overwhelmed by the workload, which

had been anticipated to be carried out in

three lots. However, during the award of

the contract, one consultant (Arch Designs

Limited) bidded lowest in all the lots and

was awarded all the contracts. They further

explained that some roads were inaccessible

and therefore, no detailed inventory study

was done on them; and others required re-

alignment to avoid compensation costs that

had not been provided for.

Some communities which were meant

to receive infrastructure were denied the

opportunity as monies meant for such

development were diverted to address

omissions, such as, construction of bridges.

Although management explained that the

eliminated roads were catered for in the

subsequent plans, there was no evidence to

the effect.

Conclusion

Designs which do not represent the

actual condition of the road lead to project

cost escalations, diversion of resources,

substandard works, and project delays and

deprive the communities of the intended

benefits.

Management Response:

Inadequacies in designs were due to factors

which were exogenous to the consultant, viz:

a) Difficult terrain and weather conditions

The consulting firm faced challenges

associated with the terrain and harsh weather

conditions during the design process. This is

particularly the case with the Elgon Region

(Bududa, Manafwa, Mbale, Sironko and Bukwo

districts) and low lying areas of Butaleja and

Namutumba Districts. Most of the roads

were non-existent and, therefore, the design

teams had to carry out the condition surveys

on foot. Landslides /mud slides and heavy

rains significantly affected the assignment.

As a consequence, some of the design teams

made design estimates based on interviews

with the local communities, observations, and

experience because they could not traverse

through the difficult stretches.

To address this problem, management,

in liaison with the affected districts and

sub-counties, re-scoped the works and re-

prioritized the scoped-out works under Batch

C.

b) Cost control

In an effort to ensure that the costs are within

the loan amount, some trade-offs were

imposed on the consultant in terms of the

design of the roads. This was particularly

the case where widening of the road to the

standard width and/or gradient would involve

excessive ‘cut-to-spoil’ of hard material and/

or rock. As noted by the auditors, Longot –

Sobezi road in Sisiyi sub-county in Sironko

district and Molok- Toiwa road in Kapchorwa

District were affected by this factor of cost.



c) Limited design time given the workload

The design consultant was required to

traverse the entire project area, covering

54 feeder road sections, measuring 580Km,

and 534 community access road sections,

measuring 3,120Km, in a 2 year period of time.

In order to do a good design, it required the

consultants to carry out inventories spanning

over two seasons that is, the dry season and

the wet seasons. This time was not available.

In order to balance the work load with time,

management approached the design of

community access roads in a phased way i.e.

Batch B and Batch C. This strategy enabled

the consultant to focus on Batch B designs

and later Batch C while the civil works for

batch B were on-going.

The Project Engineers as well as the District

Engineers are involved in the review of the

consultant’s output.

However, given the cost implication, the

time constraint and workload, the quality

assurance processes are on a sample basis.

The District Engineers are involved at 3

levels:

a. Prioritisation of the roads

b. Road inventory and design of the roads

c. Review of the bidding documents

However, given the fact that most of the roads

do not exist and given the time constraint, the

design process is very challenging.

Management has, however, noted the

recommendations of the Auditor General

and appropriate action will be undertaken

accordingly.

Auditor’s Comment:

The design exercise was not properly

managed. The challenges ought to have been

identified at an early stage and mitigation

factors devised.

Recommendations

• Management should ensure that contractors

are strictly supervised during the design

period and designs should be reviewed for

appropriateness before approval.

• Management should ensure that consultants

carry out detailed road inventories prior to

designing the road infrastructure.

• Design contracts should be spread

to a number of consultants to avoid

overstretching the consultants and delays in

the implementation of projects.

• The District Engineer should be adequately

engaged in the design and review process.

4.1.2 Inconsistencies in the Bills of Quantities (BOQs)According to the Terms of Reference for the

consultancy contract, the consultant was

required to carry out road inventories and

conditional assessment surveys, design and

preparation of tender documents for both

community access roads and feeder roads.

The audit established that for some projects,

there were inconsistencies between the

improvement plans and the bills of quantities.

For example, the quantities for reshaping and

road formation did not match the total road

length. In other cases, the quantity for gravel

in the bills of quantities did not match the

design quantity as shown in Appendix iii.

The inconsistencies in BOQs were caused by

inadequate quality control checks undertaken

by both the consultant and the MOLG.

Inconsistencies in BOQs lead to overpayments.


Conclusion:

There were inconsistencies in BOQs which lead to overall contract escalations.

Management Response

Management acknowledged that there were some inconsistencies in the BoQs and the improvement

plans had been put in place. In particular, there was overlap between the ‘Reshaping of Existing

Road Formation’ and ‘New Road Formation’. In contracts where this occurred, management

established that there was need for widening the roads to achieve the desired road width, hence,

creating two parts namely, a) partial reshaping of Existing Road Formation and b) opening up a

section of the road hence ‘New Road Formation’ bill item.

This was the design approach and the bidders submitted bids accordingly.


The BOQs were not properly prepared. Management’s improvement plan is a matter of future

assessment.

Recommendation:

Both the Ministry and the consultants should put in place proper quality control measures to

enhance the accuracy and comprehensiveness of the BOQs.

4.2 Establishment of Infrastructure4.2.1 Establishment of Infrastructure on registered Public LandAccording to the CAIIP Programme Operational Manual, prior to improvement of any selected

market place, the Programme Facilitation Team (PFT) should be assured by the district/sub-

county of clear legal ownership by producing documentation/land lease. The market management

guideline, section 2.0 also required the Government of Uganda, represented by the sub-county

where the market is located, to own the land and all the facilities and structures therein.

The audit established that all the 12 market sites, valued at Shs.1,318,402,547, visited in the districts

of: Iganga, Mukono, Mityana, Masaka, Sembabule, Pallisa and Kapchorwa were established on

land without proper ownership (untitled land), contrary to the programme operations manual and

market guidelines. The sub county authorities informed the audit team that the land registration

process was underway in some of the sub counties. For Sub counties like Ntunda in Mukono that

had inadequate land, the sub county had purchased land from private land owners and the process

of transfer was underway. However, management explained that the land ownership requirements

were later relaxed and districts/sub counties were only required to sign a letter of undertaking and

provide a letter of comfort indicating that the land belonged to the entity. No evidence was provided

to support this explanation.

The sub county authorities interviewed attributed the failure to secure land titles to lack of funds

to facilitate the land registration process.

The establishment of markets on untitled land exposes the investment to a risk of loss should the



land on which they are established be claimed

by another party.

Conclusion

Establishment of permanent structures

on untitled land contravened the project

guidelines and criteria in the programme

operations manual and exposed the district/

sub county to loss of the infrastructure.

Management Response

Lack of land titles for public land is a nationwide

problem. During the loan negotiations of the

CAIIP, it was noted that most of the public

land in the country is not titled. It was further

noted that the process of securing land titles

takes long and in most cases delays the

implementation of projects. It was agreed

between the ADB and the Government, under

Article V, Section 5.01 (ii) of the Financing

Agreement that a Letter of Comfort stating

that the land where the market infrastructure

is to be constructed shall belong to the

Government or the community. The

Ministry of Finance, Planning and Economic

Development issued the Letter of Comfort in

fulfilment of Conditions Precedent to First

Disbursement. At implementation level, the

beneficiary sub-counties and District Local

Governments issued similar assurances prior

to the construction of the infrastructure.

Management stated that the process of

securing titles for these public lands was

on-going and also promised to follow up with

the districts and in liaison with the Ministry

of Lands, Housing and Urban Development

secure land titles accordingly.


The letters of comfort were used as a stop-

gap measure, but in order to guarantee the

security of public land, land titles have to be

processed.

Recommendation

CAIIP management should ensure that all

programme implementing sub-counties

secure land titles for the land on which

project infrastructure was established.

4.2.2 Quality of works and workmanshipThe completed works should meet the quality

specifications in the contract (Conditions of

Contract, Clause 16).

However, a physical inspection of the works

revealed that the quality of works varied

from good to bad as some infrastructural

works were found not to be of the expected

standards.

Buildings works:

83% of the 12 constructed markets visited

had good visual finishes and the roofs were

provided with the recommended covering

material. Field measurements revealed

that there was compliance in setting the

dimensions of structures during construction.

Examples of such markets included:

Kyawagonya Market in Masaka District,

Ntunda market in Mukono District, Kapunyasi

market in Pallisa District and Lwebitakuli

market in Sembabule District as shown in

Pictures: 2 & 3 below:


Picture 2: Ntunda market in Mukono District Picture 3: Lwebitakuli market in Sembabule District

Mityoru market in Kaptanya sub-county, Kapchorwa District was not satisfactorily constructed.

This was reflected in the cracking of floors and slab tops, cracking in curtain walls, failed slabs for

VIP latrines, timber warping for roof truss members, dissimilar iron sheets on same roof and lower

quality iron sheet material than specified. The pictures below show some of the defects revealed.

Picture 4: showing dissimilar iron sheet material on the same roof

Picture 5: cracking of slab for Mityoru market in Kaptanya, Kapchorwa District

Picture 6: Damaged latrine slab that has failed at Katosi market

Picture 7: Failed tank platform at Maanyi market



Audit tested the strength of some market members, cattle loading points and bridges to determine

whether they corresponded with the specified strength. Audit established that most of the members

tested met the specified strength except a few that did not meet as shown in Appendix iv.

From the results of the Schmidt hummer test above, eight out of ten (80%) points tested met the

specifications in the bills of quantities. Stall slabs met the specifications whereas the concrete

strength of the 2 out 4 cattle loading points at Kawete cattle market failed.

Road works:

Road Surface Condition

Inspection of both feeder and community access roads sampled (47 roads) revealed that 39 (83%)

of the roads visited had good surface condition (Appendix v). However, it was also observed that on

some road sections, localised rutting and pot holes have started developing.

Picture 8: Good surface condition – Hasahya- Naboa Rd Picture 9: Bad surface condition-Magongolo-Railway Line Rd

Drainage condition

41 out of 47 inspected roads were provided with adequate drainage by formation of appropriate

cross falls, side drains and mitre drains and culvert lines (Appendix v).However, the long term

performance of the drainage structures was jeopardised by improper jointing of most culvert

pipes, lack of provision of culvert end structures and unsuitable embankment material.

Audit inspection further revealed that, culverts were not jointed as per specifications which required

that culvert joints be sealed with mortar. In addition, most of the culverts inspected had cracked or

broken head and wing wall structures. Some of the culverts were inadequately covered with gravel

and as such were exposed to damage by traffic.


Picture 10: Damaged culvert that has given way due to inadequate back filling at Ch 2+600 on Lwengo – Kyawagonya road.

Picture 11: Cracked culverts on Akopor-Kamuli road in Tororo DistrictPicture 12: Broken Culvert End Structures on Kakule-kameruka road in Budaka District

The work defects shown in the pictures above were caused by inadequate supervision by the

project managers, contractors’ non-adherence to the technical specifications and use of poor

quality working materials.

Poor quality works lead to quick deterioration of the infrastructure, increased maintenance costs,

reduction of the useful life of the infrastructure, loss of the invested amounts and endangering of

the lives of users.

Conclusion:

The quality of works on some of the roads, markets and APF shelters constructed was not up to

the expected standard. Works which do not conform to the required quality specifications lead to

quick deterioration of roads hence increasing the overall maintenance costs.




Management has taken adequate measures

to ensure that specifications are adhered to.

The defects on the roads are attributed to the

following:

Excessive traffic and overloading: the

community roads are now taking on too much

traffic beyond their design capacity. Trailers

and heavy trucks are now diverting off the

main roads to the community roads due

to their improved condition. Restriction of

traffic/axle loads could be the solution.

Movement of animals (cows) along the roads:

In the cattle keeping areas, animals are

moved along the road and get water around

the culvert outlets, hence damaging the

headwalls and the road beds.

Restriction is necessary but there is no

enforcement mechanism in place.

Auditor’s Comment

Management is explaining maintenance

challenges, but some of the defects happened

during construction as a result of not adhering

to specifications.

Recommendations:

• The project managers should always ensure

that the contractors adhere to the required

specifications.

• Works that do not meet the required

technical specifications should not be paid for.

4.2.3 Quantity VerificationOverpayment on worksPayments should be made for actual work

done and is arrived at by way of measurement

using measurement sheets. PPDA regulation

236(5) of the PPDA Regulations require the

measurement of work done to be undertaken

during the performance of the contract

and reconciliation of the measurements

upon completion of the contract. It is also a

requirement that the Client pays for works

that have been executed and before any

payment is effected measurement sheets

and supervision report have to be prepared

detailing the amount and quality of works

executed.

A review of the bills of quantities (BOQs) and

Interim payment certificates (IPCs) revealed

that payments worth Shs.307, 627,262 were

made for quantities over and above the actual

works executed. This includes overpayments

on Feeder and community access roads which

amounted to Shs.114,214,910 representing

37.1% (Appendix vi) and Shs.146,056,260

representing 47.5%, respectively(Appendix

vii) while those on markets were worth

Shs.47,356,092 or 15.4% (Appendix viii).

Further scrutiny of IPCs and subsequent

physical inspection revealed that on four(4)

road contracts, payments amounting to

Shs.63,471,015 had been made for works not

executed at all. (Appendix ix).

The overpayments on road works were

caused by incorrect measurement of gravel

quantities on all the roads, culvert length

and road length while the overpayments on

construction of markets were a result of over-

estimation of number of columns and steel

section quantities; ambiguous provision for

storm water and surface run-off; parking area

and access roads. Inadequate supervision

and absence of measurement sheets equally

contributed to overpayments and could have

also caused payment for unexecuted works.

Overpayments and payments for unexecuted

works are a loss to Government, as such,

funds would have been used to establish

more infrastructures in other sub counties.


Conclusion

The project paid for unexecuted works and

overpaid contractors who were engaged to

do road works and construction of markets.

This resulted into loss of funds, deprived

the communities of services and hampered

the major programme goal of improving

agricultural infrastructure.

Recommendations:

• Management should enforce the recovery of

the funds from the contractors in respect of

the irregular payments made to contractors.

• Management should ensure that Interim

payment certificates (IPCs) are always

accompanied by measurement sheets, which

should be checked for all the contract works

executed.

• Project managers should step up supervision

to ensure that all the work is done as per

BoQs and that payments are only effected for

quantities of works actually executed.

4.3 Completion of ProjectsAccording to the Special Condition of

Contract (SCC), the completion period for the

construction of rural markets, feeder roads

and community access roads was stated as

six (6) months, whereas for APF shelters it

was three (3) months.

It was established that most of contractors for

markets, roads and APF shelter had delayed

to complete works. An analysis of 12 selected

contracts for the construction of markets in

7 districts revealed that 17% of the contracts

were completed within the stipulated time.

However, 75% experienced an average delay

of 8 months. The details are indicated in

Appendix x.

Site inspection further revealed that some

projects had been abandoned for more than

28 days without the authorization of the

responsible officer/Project Manager, yet the

works had not been completed. In one road

construction contract,10 only setting out, site

clearing works and earth works had been

carried out on some sections of the roads.

These works had deteriorated to a level

that will require redoing the same activities

already paid for as shown in pictures 13 and

14.

10 Rehabilitation of 5 CARs contracted to Kapchorwa Broadway Agencies in Kaptanya Sub county Kapchorwa District.



Picture 13: Chebukat – Kaptokwoi road Picture 14: Kashabul – Mokotu road surface conditions

Picture 15: Molok – Toiwo road

Other abandoned sites include Lugusuulu cattle market in Lugusuulu Sub county Sembabule

District and APF shelters in Kapchorwa District which had been abandoned for a period of 750 and

726 days, respectively.

The abandonment of contract works was attributed to inadequate financial and equipment capacity

of the contractors, a problem that should have been addressed at the procurement stage.

Delays in completion of works were partly caused by delays in payment of contractors which

ultimately impacted on their cash flows. There was also inadequate supervision of the projects by

the district staff, mainly because of irregular and limited facilitation from the PFT.

The delays by contractors to complete works within the stipulated time deprived the communities

of access to services as originally planned.

As a result of the abandonment of works for the rehabilitation of 5 CARs in Kaptanya Sub

county Kapchorwa District, the works that were previously carried out had deteriorated beyond

rectification. The scope of works needs to be reviewed and works re-tendered. This will result into

a loss of Shs.83, 134,025, which had already been paid to the Contractor.

Picture 16: Kaplak – Water source road surface conditions.


Liquidated Damages

It was also noted that while the contracts

clauses provide for termination of contracts and

charging of liquidated damages in case works

are delayed by the contractor, management did

not take any steps to enforce these contractual

requirements.

A review of fifteen (15) contracts revealed that

a total of Shs.417,141,734 was not charged to

various contractors in liquidated damages.

Of this, Shs.117,987,845 was in respect of

markets (Appendix x), Shs.195,978,756 for

community access and feeder roads (Appendix

xi and xii)and Shs.103,175,133 for APF shelters

(Appendix xiii).

Conclusion

Delayed completion of works deprives

communities of services and also hampers

the realisation of the overall sector goal of

contributing to poverty reduction and economic

growth in Uganda through commercialisation

of agriculture.

Management Response

The contract period for the execution of civil

works has been standardized to 6 months

for all contracts. Management is well aware

that this period is short but a short contract

period is used so as to exert pressure on the

contractors to prioritize the project works.

Most contracts delayed despite numerous

extensions of completion times due to factors

which, in most cases, are beyond the control

of both the Contractors and the Employers,

namely: vagaries of weather (floods,

mudslides, and drought), limited availability of

gravel material and the difficult terrain in some

project districts.

Management explained that they could not

charge contractors Liquidated damages

because the delays on the other hand

were occasioned by the Client. Payments

to contractors delayed, review of designs

was not carried out on time and sometimes

the right of way was not secured. These,

according to management, are compensation

events, which could have led to the granting of

EOT. It is, therefore, practically impossible to

recover liquidated damages without causing

unnecessary litigations.

Auditor’s Comment

The challenges explained by management

should have been properly documented

and handled in accordance with the basic

principles of contract management. Where

necessary, EOT should have been granted to

avoid counting the delay on the contractor.

Recommendations:

• Management should invoke the relevant

contract clauses for timely execution of

contracts, by charging liquidated damages

and termination of contracts in extreme

cases.

• Management should recover all the amounts

outstanding in liquidated damages.

• Supervision of contracts should be

enhanced and arrangements should be put in

place to ensure that payments processes are

streamlined to avoid delays.

• The client should make site inspection a

mandatory requirement to all contractors

during the bidding process.

• Contractors who do not perform according

to requirements should be black listed by the

client and PPDA to avoid future recurrences.



4.4 Operation and maintenance of established infrastructure4.4.1 Occupancy of MarketsAs per the agreed contract conditions, the market should be constructed, completed and handed

over to the district authorities for ownership. The obligation falls on the district to ensure occupancy

of the markets.

It was noted through Field visits and interviews that although market structures had been

completed, several markets were not occupied.

Picture 17: Unoccupied market structures in Katosi Market in Mukono District

Picture 18: Bukulula Market in Masaka District.

Picture 19: Informal market operational in the neighbourhood

Picture 20:New market facilities abandoned by the vendors

From the analysis of the markets visited, it was established that inspite of the heavy investment

(Shs.1.33 billion) made as shown in table 2, only 45% of the markets were occupied. 55% of the

markets, valued at Shs.964,206,454 were not occupied hence putting to waste the amount spent

on their construction


(Table 2). Table 2: Occupancy status of the markets visited

District Subcounty Market Name Contract Price Status

Iganga Namungalwe Kaweete 165,091,920 Not Occupied

Iganga Nakigo Nabitovu 97,753,987 Not Occupied

Mityana Maanyi Maanyi 115,248,184 Occupied/Operates weekly

Mityana Bulera Bulera 131,733,341 Occupied/Operates weekly

MukonoNtenjerru Katosi 210,909,201 Not Occupied

Ntunda Ntunda 98,983,747 Not Occupied

Sembabule Lwebitakuli Lwebitakuli 120,632,481 Occupied/Operates daily

Pallisa Petete Kapunyasi 107,283,776 Not Occupied

MasakaKyawagonya Lwengo 108,214,840 Occupied/Operated weekly

Bukulula Bukulula 89,246,328 Not Occupied

Kapchorwa Mutyoru Motyoru 88,459,219 Not Occupied

Total 1,333,557,024

Non-occupancy of the constructed market structures was attributed to failure by the district

authorities to enforce their occupancy, absence of adequate storage facilities, remote locations

(some of the markets were far from the trading centres or traditional market sites) and non-

operational agro processing facilities, which would have attracted vendors to the markets.

Non-occupancy of the markets deprives the districts and sub-counties of the potential revenue

from market dues.

The failure to put the markets to their intended use has led to their physical deterioration as a

result of absence of preventive maintenance measures and this has exposed them to vandalism/

theft and misuse as some have been reduced to playgrounds, animal shelters and grazing land.

Picture 21: Vandalised transformer at

Bukulula Market.

Picture 22: Kids playing and Animals grazing in Kapuyansi market



Conclusion:

Most of the markets inspected were not occupied which anomaly puts the hefty government

investment to waste and jeopardizes the programme intended objective of improving household

incomes through commercialisation of agriculture.

Management Response

There are several reasons that explain the non-occupancy of markets, namely: poor location

(Public land is a distance away from the current trading area), lack of enforcement of the Market

Act by the Local Governments, political interference in the running of markets, reluctance to pay

market dues by the vendors, inadequate produce/commodities to sell in the market during the

off-season periods and the timing of the visit (weekly, bi-weekly and others are monthly markets).

A series of meetings have been held with the Chief Administrative Officers of the affected districts

and an action plan has been developed.

Auditor’s Comment

Some markets remain unoccupied and the developed action plan with CAOs is a matter of future

assessment.

Recommendations:

• Local governments should step up mobilisation and sensitization campaigns, and enact bye-

laws to enforce occupancy and utilisation of the established market facilities.

• Market structures should provide for adequate storage facilities for the end users.

• Management (PFT) should expedite the installation and commissioning of all the APFs; as this

will attract vendors to the market premises.

4.4.2 Functionality of Agro Processing Facilities (APFs)In a bid to address the challenge of post-harvest handling and value addition in the CAIIP

implementing sub counties, the program planned to supply and install several units of assorted

agro-processing equipment which included: maize mills, coffee hullers, rice hullers and milk

coolers. Each beneficiary sub-county was to select an agro-processing facility which befitted/

matched the agricultural produce of the area.

The audit, however, established that the supply and installation of the said facilities delayed and

there were no operational agro-processing facilities in any of the seven (07) CAIIP implementing

districts visited. See Appendix xiv.

The audit inspection further revealed that there was no co-ordination between the contractors

for the shelters and the suppliers of equipment as they delivered equipment before shelters were

fully completed, leaving the equipment lying idle at the respective district/sub county premises.

For example, in Mubende, Kiganda Sub County, a milk cooler was delivered to the sub county

headquarters and left exposed to extreme weather conditions.


Picture 23: A milk cooler in the compound of Kiganda Sub county headquarters

The non-operationalization of the agro processing facilities was attributed to the delays in

construction of shelters caused by inadequate contract design/packaging and failure by

management to identify the proposed private operators to run the completed facilities.

As a consequence, the non-operationalization of the agro-processing facilities deprived the target

beneficiaries of the expected benefits of value addition to their local agricultural products. It has

also deprived the respective local governments of enhanced revenue collection from the use of

the APFs.

Conclusion

The APFs in all the CAIIP participating districts were not operational, which deprived communities

of benefits of value addition to their products, which would have improved their farm gate prices

and improved household incomes.

Management Response

The operationalization of APFs involved the co-ordination of 4 key service providers, namely: (a)

construction of the shelters, (b) supply and installation of the equipment, (c) supply of power

(extension of the grid) and (d) Certification and issuance of permits from UMEME. The co-ordination

of these stakeholders was very challenging.

In addition, the supply, installation and operationalization of the facilities process faced two

challenges:

Limited resources on the ADB Loan to finance the grid extension, which necessitated negotiating

with IFAD to finance the activity.

Rejection of the letters of credit that were secured by the equipment suppliers from Tropical Africa

Bank in favour of the equipment manufacturers following the events in Libya.



In spite of all the above, to date, all the 123 facilities (33 rice mills, 37 milk coolers, 14 coffee

hullers and 39 maize mills), together with all the accessories, have been delivered into the country

and the suppliers are in the final stages of installation. 66 of them are currently at the testing and

commissioning stage with 16 of them already in operation.


The sampled APF were not operational at the time of audit. Installation of some of the procured

APFs is still on-going.

Recommendations:

• In future, management should ensure that contracts are designed/packaged and scheduled

appropriately to ease their execution.

• Management should expedite the operationalization of the completed and fully installed facilities.

• Management should expedite the installation of the remaining facilities.

4.4.3 Maintenance of infrastructureThe routine and periodic maintenance of the entire infrastructure put in place under the program is

the responsibility of the respective beneficiary districts. The District Administrative and Operational

Guidelines, Manual A (Policy Document for Road Maintenance, October 2003, MoWT) Section A- 2

Declaration No. 1 requires that the district shall make every effort to provide adequate routine

maintenance of all maintainable roads (in particular all roads that have been recently constructed

or rehabilitated) to protect the investments, provide an acceptable level of service necessary for

basic access and road user safety.

The audit inspections carried out established that there were no maintenance interventions put in

place by the district and sub-county authorities to ensure the sustainability of the infrastructure

put in place by CAIIP. Most of the infrastructures put in place were deteriorating due to lack of

maintenance. For example, the roads constructed in earlier batches of CAIIP I were in bad shape

with potholes, silted culverts and over grown vegetation along the roads reducing their effective

carriage way widths by approximately 0.5 to 1 meter for different sections of the roads as shown

in the pictures:


Picture 24: silted culvert along Nsambya – Lugusulu Road in Sembabule

Picture 25:section with overgrown vegetation along Radio Uganda – Nasuleta Road in Pallisa District

The markets also exhibited several defects, including: overgrown vegetation in the open spaces,

peeling off of paint and many others as shown in the pictures:

Picture 26: Overgrowth of vegetation at Katosi Market in Mukono

Picture 27:peeling off of paint at Kapunyas market in Petete

The sub-county and district authorities attributed the failure to maintain the roads to inadequate

funding from the Road Fund and absence of agreed arrangements between the Ministry of

Local Government (PFT) and the implementing districts for the maintenance of the established

infrastructure.

Lack of routine maintenance increases the future maintenance cost for the infrastructure and

compromises the safety of road and market users. Without maintenance, the sustainability of the

established infrastructure put in place by the program is bound to remain a challenge and also

hamper the realization of the program objectives.

Conclusion

The infrastructure constructed under the program is not being maintained. This is likely to increase

future maintenance costs and compromise the safety of the users.

3m




The Government, through the Uganda Road Fund, is releasing resources to sub-counties for

maintenance of Community Access Roads. The Project management submitted a list of all

rehabilitated roads to the Uganda Road Fund to harmonise the prioritisation of the community

roads in the Project Sub-Counties for maintenance. In addition, Government has procured road

equipment which will be distributed to the districts for road maintenance. Management has

taken note and will closely liaise with the Road Fund and the Project Districts to ensure that the

rehabilitated roads are maintained. The rehabilitation of additional roads will be conditioned on

proper maintenance of the completed ones.

The communities are being encouraged, through local leaders, to maintain these roads on

community based (bulungi bwansi) basis and Mityana District is doing it.


Programme roads have been neglected by district authorities.

Recommendation

• The respective districts should effect routine and periodic maintenance of infrastructures so as

to prevent them from further deterioration.

• CAIIP management should consider signing a MoU with the implementing districts, committing

them (districts) to maintain the established infrastructure.

• Government, through the Uganda Road Fund, should prioritize allocations to districts and

consider matching the amount of allocation to the stock of roads in a given district.

John F. S. MuwangaAUDITOR GENERAL


GLOSSARY OF TERMS

“Agricultural Infrastructure” refers to district and community access roads that ease evacuation

of agricultural produce, market place infrastructure that includes; shelters, stalls and agro-

processing facilities that accommodate vendors and create value addition respectively, and the

rural energy solutions that aid the powering of markets and agro-processing equipment.

The “Contract” is the agreement between the Employer and the Contractor to execute, complete,

and maintain the Works.

The “Contractor” is a person or corporate body whose Bid to carry out Works has been accepted

by the Employer and is named as such in the Agreement, and means Provider as defined in the

Public Procurement and Disposal of Public Assets Act, 2003.

The “Employer” is the party named in the Agreement, who employs the Contractor to carry out

the Works and means Procuring and Disposing Entity as defined in the Public Procurement and

Disposal of Public Assets Act, 2003.

The “Contract Price” is the price stated in the Agreement and thereafter as adjusted in accordance

with the provisions of the Contract.

The “Completion date” is the date of completion of works as certified by the Project Manager.

“Bills of Quantities” means the priced and completed bills of quantities forming part of the Bid,

which provides the agreed rates and prices for payment for an Admeasurement Contract.



APPENDICES

APPENDIX i: Documents reviewed

S/N Document Purpose

1. Project Appraisal reports.To obtain the program background, goals and objectives, project implementation areas and Establish how CAIIP operations are funded.

2. CAIIP Operations Manual Get an understanding of processes and procedures

3. Loan Agreements Understand loan conditions and terms.

4. Project work plans and progress reports.To compare project performance against set targets and obtain information regarding to challenges the project is facing.

5. The Local Government Act To understand the legal frame work of MoLG.

6. Staff structure/ Organogram To establish the staffing and reporting levels

7. Contract Agreements(APFs, Markets, CARs, FRs, agro-shelters) To ascertain contract prices and terms.

8. Project audited accounts Obtain project financing and budget performance.

9. Interim payment certificates (APFs, Markets, CARs, FRs, agro-shelters) Establish amount of money paid per given contract.

10. Prioritization reports for infrastructure To understand how infrastructure was selected targeting beneficiary communities.

11. CAIIP final accounts Extract budgets project funding.

12. Infrastructure designs (Roads, Market shelter, agro-shelters, FRs) To ascertain whether established adhered to designs.

13. Procurement contract management files To establish whether procurements were followed PPDA and donor regulations

14. BOU Bank statements for CAIIP Ascertain payments made for programme activities.

15. MoWT standards for roads. Establish whether established road infrastructure met required standards.


APPENDIX ii: List of interviews conducted

Section Officer (s) Purpose of the interview

Project facilitation team ( PFT/MoLG)

National Programme Coordinator

To obtain an understanding of community agricultural infrastructural improvement programme, the project coverage, the key stake holders, he funders of this programme, the planning process, the benefits realised from the project, the challenges faced, and possible solutions to the challenges and recommendations.


Financial ControllerTo obtain an over view of the project funders, the procurement system, the payment system and the accountability process. Benefits of the project, challenges faced, and recommendations.

Project facilitation team (PFT/ MoLG)

Monitoring and Evaluation Specialist

To obtain an over view of the monitoring process, the reporting process, the key stake holders, benefits of the project , challenges ,remedies to the challenges and the recommendations.

Project facilitation team (PFT/ MoLG)

Infrastructural Advisor

To obtain the status of established infrastructure and the maintenance plan of the same. The planning process, selection of the project implementing sub counties, selection of the roads to be rehabilitated. Benefits of the project, challenges faced solutions to the challenges and recommendations if any.


Rural Energy Specialist

To obtain an understanding of the agro-processing facilities procured and installed, the selection process of the benefiting sub counties, benefits realised, challenges faced, possible solutions and recommendations.


Community Development Officer

To obtain an understanding of the mobilisation process, the key persons involved, benefits realised, challenges faced, possible solutions and recommendations.

District Chief Accounting Officer (CAO)

Obtain a brief on the benefits of the programme to the district, challenges faced, possible solutions and recommendations.

District Project Support Officer

Obtain a brief on the project implementing sub counties and their selection, the basis for the road choices to be rehabilitated and their maintenance plan, how contractors are procured, benefits realised, challenges, possible solutions and recommendations.

Sub-county Sub-County Chief

To get an understanding of the project implementing sub counties, the key stake holders, the people involved in moblising the communities, the payment of contract works process, the benefits obtained, challenges faced, possible solutions and recommendations.

Sub-county Infrastructure Management Committees

To obtain an understanding about the formation of these committees, their roles in the project implementation, benefits obtained, challenges faced, possible solutions and recommendations.



Appendix iii: Inconsistencies in BOQs

SN District Contract Name BOQ ITEMS Description Remarks

1 Mukono/Kayunga

Rehabilitation of 45.4 Km of Feeder Roads under the Community Agricultural Infrastructure Improvement Programme 1 (CAIIP-1) in Mukono and Kayunga

3.1.1 Re-shaping of existing road formation including watering and compaction

Items 3.1.1 and 3.2.3 for consistency purposes should equal the length of the road. In this case this was not so with probable results as high contract rates.

3.2.3 Form, water and compact roadbed

2 Mityana/ Mubende

Rehabilitation of 44.2Km of Feeder Roads under the Community Agricultural Infrastructure Improvement Programme 1 in MITYANA and MUBENDE

2.1 (Re)-establishment of road alignment

Items 2.1 and 2.2 should be similar which was not the case for Kalangalo-Kamuliroad,ssese-Kisana and Kibalinga-Lwebyayi-Kaweri roads.

2.2

Clear site of all grass, bushes and boulders (up to 1.5m max. girth) and grub all roots of grass and bushes including excavation of topsoil from road formation

3.1.1Re-shaping of existing road formation including watering and compaction

Items 3.1.1 and 3.2.3 for consistency purposes should equal the length of the road. In this case this was not so with probable results as high contract rates.


3 Masaka/ Sembabule

Rehabilitation of 54.9km of feeder roads under Community Agricultural Infrastructure Improvement Programmes 1 Project (CAIIP 1) in Sembabule and Masaka Districts

2.1 (Re)-establishment of road alignment

Items 2.1 and 2.2 should be similar but this was not the case for Kasambya-Lungusulu Road and Kyamulimbwa-Lusango roadThe sum of items 3.1.1 and 3.2.3 should be equal to the total length of the road, this was not the case for Kasambya-Lungusulu Road and Lwengo– Kyawagonya road

2.2 Clear site of all grass, bushes and boulders

3.1.1Re-shaping of existing road formation including watering and compaction



APPENDIX iv : Results of Schimid Hummer test

Location/Point

Angl

e of

Im

pact

(deg

)

Acce

ptab

le V

alue

Co-

rela

ted

St

reng

th fr

om g

raph

(psi

)

Actu

al C

oncr

ete

St

reng

th (M

Pa)

Con

cret

e cl

ass

Aver

age

stre

ngth

cla

ss

Spec

ifica

tion

Rem

arks

1-Lwebitakuli Market Stall Slab

LHS -90 27.73 3,500 24.13 C25

C25 C20 Passed RHS -90 27.27 3,500 24.13 C25

2-Bukulula Market Stall Slab

LHS -90 28.20 3,750 25.86 C25

C25 C20 PassedRHS -90 28.20 3,750 25.86 C25

3-Mutyoru Market Stall Slab

LHS - 9 0 25.00 3,000 20.68 C20

C20 C20 Passed

RHS - 9 0 26.40 3,250 22 C20

4-Kapunyasi Market Stall Slab

LHS - 9 0 27.80 3,750 25.86 C25

C25 C20 Passed

RHS - 9 0 27.20 3,500 24.13 C25

5-Kyawagonya Market stall slab

LHS -90 26.40 3,400 23.44 C25 C25 C20 Passed

RHS -90 34.40 4,800 33.09 C35

6-Kawete Cattle market – Loading points

Loading point 1 -90 26.30 2,270 15.65 C15 15 20 Failed

Loading point 2 -90 26.40 3,250 22 C25 25 20 Passed

Loading point 3 -90 25.00 3,000 20.68 C20 20 20 Passed

Loading point 4 -90 25.55 2,095 14.44 C15 15 20 Failed

Source: OAG Analysis



APPENDIX v: Condition of surface and drainage conditions for Feeder and community access roads

(a) Feeder roads

District Road Name Length(Km) Surface Condition

Drainage Condition

Mukono Ntenjeru-Bbule Rd 19.0 Good Fair

Mubende Kibalinga-Lwebyayi-Kaweeri Rd 22.7 Good Fair

Mityana Bbanda-Lusalira Rd 9.9 Good Fair

Kalangalo-Kamuli Rd 7.5 Good Fair

Sembabule Kasambya-Lugusulu Rd 22.8 Fair Fair

Masaka/Lwengo Lwengo-Kyawagonya Rd 12.3 Good Fair

Masaka/Kalungu Kyamulibwa-Kiwaawo-Lusango Rd 10.9 Fair Fair

Budaka Iki Iki-Kameruka Rd 7.8 Good Fair

Namirembe-Kameruka Rd 9.4 Good Fair

Mailotano-Mugiti Rd 6.1 Good Fair

Pallisa Kamuge-Mudiri-Buseta Rd 10.6 Good Fair

Radio Uganda –Petete Rd 8.8 Good Fair

Butaleja Jobusiba-Namaholo-Lwamboga Rd 7.2 Good Fair

Hasahya-Kaiti-Naboa Rd 7.5 Good Fair

Lusaka-Magongolo-Railway Line Rd 6.6 Good Fair

Tororo Apokor-Kamuli-Petta Rd 9.4 Good Fair

Osia –Kidera Rd 10.1 Good Fair

Iganga Namungalwe –Namukubembe Rd 17.6 Good Fair

CMS-Luyira Rd 6.10 Good Fair

Namutumba-Nabinyonyi Rd 12.5 Good Fair

Nabinyonyi –Nagonde Rd 10.5 Good Fair

Total 235.3

(b) Community Access Roads (CAR)

District Road Name Length(Km) Surface Condition

Drainage Condition

Sembabule Lutunku-Lugusulu Rd 24.5 Good Fair

Kapchorwa Kaplak-Water Source Rd 2.5 Poor Poor

Chebukat-Kaptokwoi Rd 2.6 Poor Poor

Kashabul-Mokotu 5.0 Poor Poor

Ngangata-Kaplelko 7.0 Poor Poor

Molok-Toywo 0.7 Poor Poor

Pallisa Radio Uganada- Nasuleta Rd 6.6 Good Fair

Petete Township Acess Roads 2.1 Good Fair

Bigenzo –Kamenyamugongo Rd 4.4 Good Fair

Iganga Kawete – Nawankonge – Bunyiro road 4.5 Good Fair

Ngobi’s place – Nambale road 5.6 Good Fair

Namungalwe – Kivainuma’s place road 3.9 Good Fair

Kawete – Naguwa – Balumwaki road 4.2 Good Fair

Naluko – Naguwa – Nsinze road 5.6 Good Fair


Amuru Kinene – Aswa – Lungulu Community access road 19.5 Good Fair

Gulu Labworomor – Karayi – Paibona road 16.6 Good Fair

Kitgum Lai – Agolo – Alaa - Ogoko road 9.3 Poor Poor

Katum HC11 - Lagotonguu road 5.8 Good Fair

Lira Ober PS Jn – Opem PS – Ayamo – Abunga – Obot PS Jn road 19.5 Good Fair

Mityana Sekereni-Nambute swamp (1.8Km) and Nambute swamp-Kiryokya road (26.2km). 28 Good Fair

Mukono Kabanga-Ssungu 4.5 Good Fair

Mpata-Mawoota 6 Good Fair

Lwetega-Katambwa 3 Good Fair

Lugazi-Kulubbi 3.1 Good Fair

Bunnikija-Golomolo 2.0 Good Fair

Kyapa-Nakonge-Katosi 2.5 Good Fair

TOTAL 199



APPENDIX vi: Over Payments for works

S/N District Contract Name Contractor Overpayments Remarks

1 Mityana/ Mubende

Rehabilitation of 44.2Km of Feeder Roads under the CAIIP-1 in MITYANA and MUBENDE

M/s Kato Investments 15,974,000

Road design gravel width considered against the measurement sheets in the IPCs, All culverts along roads counted during audit; underpayments considered

2 Mukono/ Kayunga

Rehabilitation of 45.4 Km of Feeder Roads under the Community Agricultural Infrastructure Improvement Programme 1 (CAIIP-1) in Mukono and Kayunga

M/s Upland Enterprises Ltd 11,850,660

Road design gravel width considered against the measurement sheets in the IPCs;All culverts counted during audit; Items traded off with 900mm culverts not specified in response hence kept in view;Under payments re-adjusted

3 Iganga/ Namutumba

Rehabilitation of 46.10km of feeder roads under caiip-1 in Iganga and Namutumba districts- CAIIP-1/FRR/Iganga-Namutumba/LOT 9

3,570,000

Under payments considered, design gravel width used; some culverts existed and not shown by consultant;Overpayments adjusted

4 Sembabule/Masaka


M/s East African Heavy Machinery

28,376,835Under payments considered, Final account reviewed; overpayment adjusted

5 Budaka/ Pallisa

Rehabilitation of 43.8km of feeder roads under Community Agricultural Infrastructure Improvement Programmes 1 Project (CAIIP 1) in Budaka and Pallisa Districts

The Leading Edge Investments

20,874,000Underpayments considered, overpayments due to culverts and road length retained

6 Tororo/ Butaleja

Rehabilitation of 49.6km of feeder roads under Community Agricultural Infrastructure Improvement Programmes 1 Project (CAIIP 1) in Tororo and Butaleja Districts

M/s BMK (U) Ltd 33,569,415

Under payments considered, culverts for all roads re calculated; design gravel width considered; overpayments adjusted

TOTAL 114,214,910


APPENDIX vii: Overpayments on CARs

SN District/Sub-county Contract Contractor Overpayments Remarks

1 Mityana/Bulera

Rehabilitation of Sekereni-Nambute swamp (1.8Km) and Nambute swamp-Kiryokya road (26.2km).

M/s Real Engineering Contractors

14,863,400

Overpayment on reshaping verified, manual problem. Management should use one item in the manual for future use

2 Mukono/ Ntenjerru

Rehabilitation of 21.1Km of Community Access Roads in Ntenjerrusubcounty, Mukono District

M/s Semeo Enterprises 13,560,000

Field verification was carried on March 23, 2013 and the quantities of gravel recalculated. Verification report is attached;Certified length considered

4 Lira/Barr S/C

Rehabilitation of community access roads in Barr sub-county- CAIIP-2/LIRA/CAR-A/LOT 77

Malcom Investments Ltd

835,000 Underpayments considered and trade-offs made

5Kitgum/ Padibe East

Rehabilitation of community access roads in padibe east sub-county,CAIIP-2/KITGUM/CAR-BATCH A/LOT 92

On Time Construction Co Ltd

2,250,000 Works were still on-going;Overpayments to be kept in view

7

Iganga/ Namungalwe S/C

Rehabilitation of community access roads in namungalwe sub-county; CAIIP-1/IGANGA/CAR-B/LOT 43

Peremi Construction Co. Ltd

4,130,000

Design gravel width considered;Underpayments considered to trade-off;Overpayments adjusted

8Sembabule /Lungusulu

Rehabilitation of ofLutunku-Kisekera-Bisese-Lungusulu road in Lungusulu Sub-County

Pribera Civil & Building Contractors Ltd

39,239,500

Design gravel width considered; Management should consider attaching take-off sheets since measurement sheet is shallow;No instruction for transfer of gravel to swamp crossings seen

9 Pallisa/Petete

Rehabilitation/construction of community access roads in Petete Sub county Pallisa District under Community Agricultural Infrastructure Improvement Programme (Lot 49)

The Leading Edge Investments

15,289,500

Design gravel width considered; Gravel for ramps considered; Management should consider attaching take-off sheets since measurement sheet is shallow

10 Kapchorwa/ Kaptanya

Rehabilitation/construction of community access roads in Kaptanya Sub-county, Kapchorwa District under Community Agricultural Infrastructure Improvement Programme

5,472,100Under payments considered;Works covered up by rains kept in view until completed

12 Bukwo/Kabei

Rehabilitation of 21.9Km of Community Access Roads in Kabei Sub-county, BukwoDistrictunder Community Agricultural Infrastructure Improvement Programme

Ms Multiline Construction Company Ltd

3,160,100 Under payments considered

13 Buduuda/ Bushika

Rehabilitation of 21.0Km of Community Access Roads in Bushika Sub-county,Buduuda District under Community Agricultural Infrastructure Improvement Programme

M/s Toni Enterprises 47,256,660

Bridges constructed and seen along the road; Works were still on-going on other road sections; reduction of ETL for one section and presence of fill works not considered pending verification

TOTAL 146,056,260



APPENDIX viii: Overpayments on Markets

Sn District/ Sub-county Contract Name Contractor Amount Remarks

1 Mityana/Bulera Construction of Market at Bulera

Busenvi Enterprises (U) Ltd

2,000,000

From picture submitted, there is a structure between the two new structures increasing the area of levelling;Galvanised steel pipes used;Authority to change reviewed

3 Mityana/Maanyi Construction of Market at Maanyi

Nyamwire Enterprises 1,500,000

Galvanised steel pipes used;Authority to change reviewed;Splash apron fully constructed as per photo; overpayment re-adjusted

4 Mukono/Ntenjerru

Construction of Katosi Market

GASCO Constryction Ltd 3,000,000

Galvanised steel pipes used;Authority to change reviewed;Issue of keeping tanks to be kept in view subject to physical verification after installation

5 Mukono/Ntunda Construction of Ntunda Market

Trust Industries Ltd 5,015,000

Galvanised steel pipes used;Authority to change reviewed;Overpayment re-adjusted

6 Sembabule/Lugusulu

Construction of Lugusulu Market

M/S West Minister Civil Engineering (U) Ltd

8,173,240

Unexecuted works on effluent treatment, overestimation of steel bars for reinforcement, use of un authorised sheeting material, area of concrete on the floor slab. To be kept in view.

7 Sembabule/Lwebitakuli

Construction of Lwebitakuli Market

M/S Ishaka Muhereza Workshop and Building Construction (U) Ltd

8,839,782

Galvanised pipes found at site, and reinforcement re- adjusted.Communication for change of pipes verified by auditors

8 Masaka/Lwengo Construction of Kyawagonya Market

M/s Ron Engineering Company Ltd

9,610,381

Steel shutters seen on site and authorisation for change received for review; Overpayments re-adjusted

9 Kapchorwa/Kaptanya

Construction of Mutyoru

M/s Bakasuku Agencies Ltd 299,400

Galvanised pipes found at site, and reinforcement re- adjusted.Communication for change of pipes verified by auditors .Shutters were not provided on the stalls

11 Pallisa/Petete Construction of Kapunyasi

M/s Greenland Building Contractors

1,274,289

Galvanised pipes found at site; 20 Metallic shutters installed and garbage bunker constructed

12 Iganga/Namungalwe

Construction of Kawete Cattle Market

M/s Afro General Builders & Carpentry

7,644,000 To be kept in view pending physical verification

TOTAL 47,356,092


APPENDIX ix: Payments for Unexecuted Works

Sn District Contract Name Unexecuted Works Paid Remarks

Feeder Roads

1 Sembabule/ Masaka


27,000,000Supply and Installation of 900mm diameter Culverts

2 Pallisa/ Budaka

Rehabilitation of 43.8km of feeder roads under Community Agricultural Infrastructure Improvement Programmes 1 Project (CAIIP 1) in Budaka and Pallisa Districts

9,200,000

Supply and Installation of 900mm diameter Culverts and Stone pitching

3 Tororo/ Butaleja


14,368,015

Supply and Installation of 900mm diameter Culverts and other erosion protection works

50,568,015

Community Access Roads

1. Bukwo/Kabei SubcountyRehabilitation of 21.9Km of community access roads in Kabei Subcounty.

12,903,000 Construction culvert end structure

Grand Total 63,471,015

APPENDIX x: Delays in market completion

S/N District Sub-county Market Name Start Date Expected

completionActual Completion

Contract Amount

Delays(months)

Un charged liquidated damages

1. Pallisa Petete Kapunyasi 02/06/2010 02/12/2010 18/08/2011 107,283,776 8.5 10,728,837

2. Iganga

Nakigo Nabitovu 17/05/2010 17/11/2010 01/07/2011 97,753,989 7.2 9,775,399

Namungalwe Kaweta 14/05/2010 14/11/2010 01/07/2011 165,091,924 7.1 16,509,192

3. Sembabule

Lugusuulu Lugusuulu 08/06/2010 08/12/2010 Abandoned 105,478,275 NA 10,547,828

Lwebitakuli Lwebitakuli 08/06/2010 08/12/2010 28/04/2011 120,632,481 4.7 12,063,248

4. Masaka

Bukulula Bukulula 15/06/2010 15/12/2010 20/02/2010 89,245,328 2.2 5,354,719

Kyawagonya Lwengo 16/06/2010 16/12/2010 16/12/2010 108,214,840 0 00

5. Mityana

Maanyi Maanyi 29/10/2010 30/04/2011 3/5/2011 115,248,184 0 00

Bulera Bulera 01/07/2009 31/12/2009 14/11/2010 131,733,341 10.6 13,173,334

6. Kapchorwa Mutyoru Mutyoru 14/06/2010 14/12/2010 29/10/2011 88,459,219 10.5 8,845,922

7. MukonoNtenjeru Katosi 17/05/2010 17/11/2010 01/08/2011 210,909,924 7.5 21,090,992

Ntunda Ntunda 11/011/2010 11/04/2011 03/04/2012 98,983,747 12 9,898,374

Total 1,318,402,547 Avg=8 117,987,845=



APPENDIX xi: Delays in Feeder road construction

SN District Contract Name Start DateExpected Completion date

Actual Completion Date

Delay (Days)

Liquidated damages

1 Mityana/ Mubende

Rehabilitation of 44.2Km of Feeder Roads under the CAIIP-1 in MITYANA and MUBENDE.

12/10/2010 12/03/2011 13/7/2011 120 23,715,671

2 Sembabule/ Masaka

Rehabilitation of 54.9km of feeder roads under CAIIP-1 in Sembabule and Masaka Districts

13/10/2010 14/4/2011 20/7/2011 97 25,406,065

3 Budaka/ Pallisa

Rehabilitation of 43.8km of feeder roads under CAIIP-1 in Budaka and Pallisa Districts

12/10/2010 11/4/2011 28/11/2011 231 23,365,027

Tororo/Butaleja


11/10/2010 14/04/2011 11/10/2011 180 20,061,289

TOTAL 92,548,052

APPENDIX xii: Delays in construction of CARs

Sn District / Sub-county Contract name Start date

Expected completion date

Actual completion date

Delay in days

Amount for liquidated damages (Shs)

1 Gulu / Palaro S/C

Rehabilitation of community access roads in palaro sub-county (CAIIP-2/GULU/CAR-A/LOT 85)

February 8, 2011

August 7, 2011

October 20, 2011 73 21,619,867

2 Lira / Barr S/CRehabilitation of CARs in Barr sub-county- CAIIP-2/LIRA/CAR-A/LOT 77

April 1, 2011

September 30, 2011

January 11, 2012 103 17,728,300

3 Kitgum / PadibeEast

Rehabilitation of community access roads in padibe east sub-county,CAIIP-2/KITGUM/CAR-BATCH A/LOT 92

January 18, 2011

October 30, 2012 On – going 92 13,442,190

4Iganga / Namungalwe S/C

Rehabilitation of CARs in namungalwe sub-county; CAIIP-1/IGANGA/CAR-B/LOT 43

June 2010 December 2010

February 2011 60 12,071,100

5 Pallisa/ Petete

Rehabilitation/construction of CAR in Petete Sub county Pallisa District under Community Agricultural Infrastructure Improvement Programme (Lot 49)

11/6/2010 7/12/2010 21/12/2010 14 2,069,924

6 Kapchorwa/ Kaptany

Rehabilitation/construction of CAR in Kaptanya Sub-county, Kapchorwa District under CAIIP.

6/7/2010 3/1/2011 abandoned 200 36,499,323

Total 103,430,704


APPENDIX xiii: Delays in constructions of APF shelters

District Contractor Contract Sum (Shs) Start Date

Expected Completion Date

Actual Completion date

Delays(days)

Uncharged liquidated damages

KapchorwaM/s Topcare Consultant & Engineering Works Ltd

189,456,645 4/10/2010 4/01/2011 Sites abandoned 726 18,945,665

Iganga M/s Kiidha General Services Ltd 277,895,100 4/10/2010 4/01/2011 22/08/2011 228 27,789,510

MityanaM/s Mweka Construction & Engineering Ltd

131,206,425 4/10/2010 4/01/2011 5/10/2011 271 13,120,642

Masaka M/s SMM General Services Ltd 74,337,318 10/12/2010 10/3/2011 01/4/2012 386 7,433,732

Sembabule M/s EMCO Works Ltd 183,812,550 4/10/2010 4/01/2011 Works on-going 726 18,381,255

Pallisa M/s Pall Technical Services Ltd 175,043,295 10/12/2010 10/3/2011 20/10/2011 220 17,504,329

Total 103,175,133

APPENDIX xiv: Status of APFs

S/N District Sub-county APF No. of Units Status of Installation Comments

1. Pallisa Petete Rice Huller 1

Completed and installedThe generator supplied was not matching with the requirements for the machines/ huller.

Not yet commissioned.

2. Iganga

Nakigo Rice huller 1 Completed and installed with no power source. Not yet commissioned.

Cofee huller 1 Completed and installed with no

power supply Not yet commissioned.

Namungalwe Maize mill 1 Installations partially done Not yet commissioned.

Coffee huller 1 Works completed and installations

done Not yet commissioned.

Rice huller 1 Works completed and installation done Not yet commissioned

3. Sembabule

Lugusuulu Milk cooler 2 Works on agro-shelters and installation on-going Not yet commissioned

Lwebitakuli

Milk cooler 1 Construction works and installations complete. Not yet commissioned.

Coffee huller 1 Installations not yet done. Equipment delivered to the

district headquarters.

4. Masaka

Bukulula Maize mill 1 Complete and installed Transformer was vandalized. Commissioning not yet done.

Kyawagonya Maize mill 1 Complete and installed Not yet commissioned.

5. Mityana

Maanyi Coffee huller 1 Complete and installed, generator

shelter not yet constructed. Not yet commissioned

Bulera Maize mill 1 Installation partially done Not yet commissioned

6. Kapchorwa Kaptanya Milk cooler 1 Contract for APF shelters was terminated and retendering done.

Shelters yet to be constructed and equipment not yet delivered.

7. Mukono Ntunda Maize mill 1 Supply and installation not yet done. Not yet commissioned.

P.O. Box 7083, Kampala. Tel. +256 414 344 340 Fax. +256 414 345 674

E-mail: [email protected]
