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How billions vanish in big hospitals

Kiruddu hospital

Kiruddu hospital

The latest reports of the Auditor General and the parliamentary committee on public accounts make one thing abundantly clear: corruption saturates our referral hospitals at virtually all levels.

Several managers of regional referral hospitals in Uganda, misappropriate cash, overpay workers, inflate bills and embezzle funds meant to facilitate service delivery, the reports found.

In line with Article 163 (4) of the Constitution, the Auditor General (AG) submitted to parliament, an annual report of audited accounts for the financial year 2020/21. The Auditor General audited 17 referral regional hospitals and six health institutions in the country.

Due to the gross mismanagement of funds, the parliamentary committee on public accounts considered the Auditor General’s report on the health sector to ensure the monies appropriated by parliament and disbursed were legally available for, and applicable to the service or purpose to which they were applied.

The MPs probed the management of several hospitals and institutions to establish whether the intended value of the expended monies was attained, the expenditure conforms to the authority which governs it, and sundry.

The audit queries contained in the report of the Auditor General for the period ended June 30, 2021 in respect of the health sector, focusing on the ministry of Health, and national referral hospitals of Mulago, Kiruddu, Butabika, China-Uganda Friendship Naguru, Kawempe, and all regional referral hospitals.

They also questioned the accounting officers of other specialized health-related institutions and programmes such as Uganda Heart Institute, Uganda Cancer Institute, Uganda Blood Transfusion Services, and Uganda Virus Research Institute. Others included; the Uganda National Health Research Organization, Joint Clinical Research Centre, and Uganda Reproductive, Maternal and Child Health Services Improvement Project (URMCHSIP).


Built on Mulago hill, north of Kampala capital city, and west of the Makerere University College of Health Sciences, the hospital is approximately five kilometers (three miles) by road, northeast of Kam- pala’s central business district.

Given its mandate to provide super specialized healthcare, training and conduct operational research in line with the requirements of the ministry of Health, the hospital received a cash transfer of Shs 3.8 billion from the ministry of Health that was neither recognized in the statement of financial performance, thereby causing a misrepresentation in the operating results.

According to MPs, the accounting officer admitted that they did not recognize, treat and disclose the amount in question received from another vote in their statement of financial performance. It should be noted that Accounting Policy 1(a) (x) (c) requires all transfers from the Consolidated Fund and other government units to be recognized when received by the ac- counting officers.

“The accounting officer and his team did not provide accountability for the Shs 3.8 meant for the payment of interns and Senior House Officers (SHO) despite the committee’s request while meeting the team. The committee required having Electronic Fund Transfer (EFT) that could account for the said sum but instead received those that related to different financial years outside the scope of inquiry,” MPs said in a report.

“The account ‘Mulago Infrastructure Development’ which was opened for a specific function to receive money for payments of interns and SHOs was irregular and susceptible to abuse,” the MPs said.

They recommended that the former executive director of Mulago Dr Byarugaba Baterana and the head of Accounts Ponsiano Nyeko be investigated by police and if found culpable should be prosecuted for the loss of funds meant for payments of interns and SHOs. The MPs further recommended that the hospital opens a specific account through which interns and SHO are paid.

The AG’s report found that the hospital had liabilities of Shs 2.9 billion from the previous year (2019/20) in respect of payables to a tune of Shs 2.3 billion to Umeme and deposits of Shs 648 million.

“In their statement of cash flows, the hospital reported payments totaling to Shs 3.7 billion in respect of liabilities in the current year comprising of domestic arrears or payables of Shs 3.1 billion and deposit of Shs 648 million. The hospital, therefore, made payments for non-existent liabilities amounting to Shs 1.4 billion.”

MPs established that the Appropriation Account revealed that the entity had initially budgeted for Shs 1.7 billion. This was subsequently revised to Shs 3.1 billion, which was all warranted and spent.

The committee said Umeme Ltd quoted Shs 1.6 billion as the total bill at the end of quarter four of FY 2020/21 whereas Mulago hospital quoted Shs 2.3 billion as outstanding liabilities for electricity at the end of the year. The entity could not avail invoices from Umeme Ltd to show the basis for the payment.

The MPs recommended that a forensic audit be done to establish the systematic flow of funds from the ministry of Finance through Mulago National referral hospital to Umeme Ltd to establish any possible misappropriation through collusion.

The Auditor General further reported a misstatement relating to transfers to the Treasury by the entity. The hospital reportedly declared an amount of Shs 1.8 billion as Non-Tax Revenue (NTR) collected during the year.

However, figures in the Statement of Financial Performance showed that Shs 1.1 billion was transferred to the Treasury, leaving a balance of Shs 648 million unremitted. The previous year, the hospital collected Shs 1.1 billion, and no transfers to Treasury were remitted.

The MPs established that the hospital spent Shs 474 million on the refurbishment of the Magnetic Resonance Imaging (MRI) machine despite it being non-functional ever since its acquisition and installation in 2018. The MPs noted that the costs of maintenance of the MRI machine were wasteful.

The AG reported that he carried out an assessment of key medical equipment in the hospital that focused on the functionality and availability of medical equipment in seven departments, that is; Central Sterile Services Department (CSSD), radiology, nuclear medicine, Intensive Care Unit (ICU), laundry, clinical laboratories and accidents and emergencies.

“Some vital medical equipment was in poor working condition, while others were not fully functional and required replacement. The equipment included: autoclaves in the central sterile service department; patient monitors in the accident and emergency surgical unit; blood coagulation machine in the clinical laboratory unit; ICU beds in the intensive care unit, and CT machine in the Radiology department,” the AG reported.

The accounting officer explained that the entity spent Shs 474 million on filling helium gas that had leaked due to a prolonged period of non-use and power outages during that period. He explained that any omission to carry out the said maintenance would lead to further collateral damage and possible loss of the entire machine.

He said failure to install and use the machine resulted from the absence of housing for the same, considering that the entire complex was still under renovation and the services relevant to the machine have since been transferred to Kiruddu national referral hospital, which has no physical space and housing for the machine.


According to the committee report, the hospital handles between 750 and 780 incpatients per month compared to its bed capacity of 550 patients. This indicates that 200 to 230 are admitted over and above the capacity of the hospital. The MPs observed that such congestion may cause the transmission of communicable diseases, especially tuberculosis and Covid-19.

The accounting officer told MPs that plans were in place in the newly approved strategic plan and that work had started to expand the male acute ward at the hospital. The Auditor General noted that Shs 93 million was utilized for repairs and service of vehicles during the year, but there were neither repair and service analysis registers, nor did the hospital transport officer maintain service charts for all the 13 vehicles maintained.

The committee noted that failure to keep track of vehicle service charts could lead to delayed servicing, which in turn could result in faster aging of vehicle parts and replacement costs. It also hinders proper tracking for accountability.


The AG reported that on several occasions, there were drug stockouts that left Kiruddu national referral hospital without several essential drugs as and when required by the patients.

“AO [accounting officer] admitted to the drug stockout and attributed it to the funding gaps in the 2020/21 financial year. He, however, noted that funding had been increased in 2021/22 from Shs 1.5 billion to Shs 5.5 billion to address drug shortfalls.” MPs said.

The AG further reported that an inspection of the hospital drug stores had found that some drugs and chemicals had expired at the time of the audit. The accounting officer attributed the expiry to donations received against previous consumption data that was eventually affected by low patient flows due to Covid-19 pandemic restrictions.

“Expired drugs are a loss to the public and a further cost in the process of transportation and destruction. Undestroyed drugs may also end up being issued out hence putting patients’ lives in danger. The committee observes that there is commendable progress in the management of drugs before and after expiry,” MPs noted in their report.


The AG said the hospital was heavily congested with patients crowded in wards and some sleeping on the floors. This was further evidenced by the data collected on bed occupancy rates which showed an average of 113 per cent for the year under review.

The AG also mentioned congestion in the stores where some items were placed directly on the floor, exposing them to damage. The MPs recommended that the ac- counting officer budgets and seeks support to address the challenges of congestion at the hospital.

“Government should find money to acquire land next to Kawempe NRH by way of compulsory acquisition of land for expansion of the facility as a way of combating congestion which has the risk of spreading communicable diseases and also affects service delivery,” MPs said.


The AG reported variances between amounts on the payroll and payments to individual pensioners, leading to overpayments of Shs 222.9 million contrary to ar- ticle 254 (1) and (3) of the Constitution.

The MPs revealed the accounting officer said that Shs 48.9 million was paid to a pensioner who was neither on the payroll nor possessed the necessary documentation to support the existence of the pensioner. The accounting officer insisted that the said pensioner, Nicholas Etumoryee exists and all his files are in place.

The AG noted that whereas Shs 1,097,631,976 was deducted from employ- ees’ salaries to be remitted to URA, only Shs 1,002,738,678 was remitted, leading to an under remittance of Shs 94.8 million by the entity.

“Whereas the entity deducted Shs 4.6 million from staff, only Shs 3 million was remitted to Uganda Nurses and Midwives Union, thus under remittance of Shs 1.6 million. The entity deducted Shs 190,771,403 million from staff, and only remitted Shs 190,487,697, creating an under-remittance of Shs 283,706. Further, the entity deducted Shs 20.6 million from staff but nil was remitted, creating an under-remittance of Service Tax payable to the local government,” AG said in his report.


The AG reported that the hospital management paid Shs 19.2 million to Dr Samuel Kirunda who abandoned duty in November 2020. However, he was paid a salary for November and December 2020 worth Shs 6.7 million, plus salary arrears worth Shs 12.5 million yet the hospital biometric data showed that the individual never clocked in for work throughout the whole financial year.

The AG noted that without authorization from the ministry of Health, the management collected Shs 23.3 million from staff occupying staff quarters. Out of the money collected, the AG noted that only Shs 6.2 million was spent on maintenance works, leaving an unspent balance of Shs 17.1 million, which was not disclosed and could not be traced in the books of accounts.

The MPs recommended that the accounting officer be held accountable for the unaccounted funds and refund the same accordingly.

The accounting officer submitted that the collection is part of staff contribution toward maintenance, sanitation, and security and it is done in line with Section B-H of the Standing Orders of Public Service and there was no evidence of authority to spend the same amount on maintenance, sanitation, and security which in any case have to be provided for by the government.

The hospital undertook procurement worth Shs 31.9 million in preparation for the hospital Strategic Plan outside the Procurement plan, with only one bidder responding which casts doubt on whether the process was competitive.

The accounting officer explained that the funds for the development of Strategic PIan were got from the Centers for Disease Control and Prevention (CDC) after they had developed a procurement plan. However, the Procurement officer did not update the plans despite reminders.

The committee recommended that the PPDA undertakes a review of the procurement regulations to accommodate scenarios where funders come with their procurement plans.

MPs further recommended that the procurement officer and the Accounting officer be held responsible for flouting procurement laws. Going forward, they should generate a list of all service providers and ensure that all procurements are done in accordance with the Law.


The AG reported variances between amounts on the approved payroll of the entity and payments to individual employees, leading to an overpayment of Shs 3.1 million contrary to Section B-a (7) of the Uganda Public Standing Orders,2010.

Further, the AG noted that a salary worth Shs 12.8 million remained unpaid by the end of the year in question. The entity had accrued Shs13.3 million in pension and gratuity, which had not been paid to pensioners by the end of the year.

The accounting officers acknowledged this query and attributed it to inadequate funds and a delay in the release of funds to pay all approved pension benefits by the year-end.

The committee observed that pension and gratuity are statutory, nonpayment of which creates arrears and exposes the entity to litigation.

“The committee recommended that the AO submit pension and gratuity estimates to the ministry of Finance in time to avoid accruing arrears. The committee further recommends that the ministry of Finance fully and accurately provides for and makes timely releases for all statutory expendi- ture to avoid budgetary distortion, litiga- tion, and associated costs,” MPs said.

The AG noted that Shs 17 million was paid by the entity as residual arrears to one staff and two pensioners who had not been verified. The MPs noted that payment of unverified salary, pension, and gratuity ar- rears may lead to over or understatement of domestic arrears which is misleading.

The entity made procurements amount- ing to Shs 33.8 million without following the procurement procedures stipulated in the PPDA regulatory framework. The committee observed that failure to follow procurement procedures eliminates competition which is aimed at achieving value for money and such omission raises suspicion of fraud in the procurement process.

“Procurement Officer and AO be held responsible for flouting procurement processes and be cautioned for the same,” MPs said.


The AG reported that the entity received off-budget financing to a tune of Shs 254 million which was not declared to the Treasury and, therefore, not appropriated by parliament.

The funds were for under- taking activities not budgeted for, which poses a risk of duplication of activities for which the government could have budgeted.

The AO told MPs that the money received during the FY made it impossible to be captured in the budget. The explanation, according to MPs, is implausible since the law has mechanisms for dealing with such financial interventions that come outside the concluded budget framework.

It was incumbent on the AO to bring it to the attention of the MoFPED such that it gets into the budget framework through supplementary means.

“The AO should at all times adhere to the law and guidelines issued by the PSST and ensure that in future all funds received are appropriated by parliament as per the law. The entity was reported to have 349 approved positions in its structures. However, only 297 (85 per cent) positions were filled and 52 15 per cent positions were vacant by the end of the year under review.

Notably, the hospital lacked a neurosurgeon to build the capacity of emergency services and reduce unnecessary referrals. The accounting officer said they submitted their recruitment plan and were waiting for the ministry of Public Service to approve it.

“The government should recruit specialists and other staff in the approved structure as a critical matter of urgency as it has a bearing on the lives of the intended beneficiaries,” MPs said.

The AO confirmed this state of equipment at the hospital and noted that they had suffered budget cuts that could not allow them to carry out maintenance on equipment, let alone acquire new ones.


The AG reported that the entity had payables to a tune of Shs 1.1 billion. The amounts are related mainly to utilities, pensions, and gratuity. The MPs said the AO acknowledged the query and explained that the arrears arose due to insufficient budget release of funds and that they had sought supplementary funding to meet the obligations.

“Accumulation of payables may be attributed to the fact that the AO disregarded the commitment control system of Government that is meant to stop entities from committing Government beyond the level of available resources,” MPs said.

The funds did not include retention for the year under review. The entity had retained Shs 54 million off the invoice off payments made to the contractor of the staff house complex construction which was not also presented as part of the expenditure for the period under review.

The AG further noted that Shs 118.3 million had been cumulatively retained. The amount was not presented as part of the payables balance in the statement of financial. This implied that the payables and expenditure were understated by Shs 118.3 million and Shs 54 million.

An audit revealed that the entity had received off-budget financing of Shs 1.4 billion which was not declared to the Treasury and, therefore, not appropriated by Parliament. The entity also received Shs 173 million, Shs 107.2million, and Shs 300 million with work plans; however, the Shs 300 million had none.

Shs 74.2 million was irregularly withdrawn from the collections account of the NTR and spent at source, which expenditures were not recognized in the books of accounts; therefore, understating the expenditure reported in the financial statements.

The AG noted that Shs 76.5 million was paid to Rodek Enterprises Ltd out of which Shs 41.9 million lacked appropriate supporting documents. The payments also lacked certificates of work done, rendering the payments doubtful.


The Auditor General further revealed variances of overpayments of Shs 21.7 million and underpayment of Shs 19.7 million in gratuity payments. Similarly, there was an overpayment of Shs 5.7 million and underpayments of Shs 10.4 million
in pension payments.

From the analysis of domestic arrears in the statement of financial position of the entity, the AG reported an increase in payables from Shs 788.8 million to Shs1.2 billion between 201912020 and 2020/21. The MPs noted that the lack of supporting documents for domestic arrears renders them suspicious and doubtful.

The AO claimed that by the time of the audit, the documentation had been filed separately. The AO, however, did not provide the documentation as directed by the committee. The committee recommended that the AO and the head of Accounts be held liable for the unaccounted-for expenditure of Shs 4I.9 million and should accordingly refund the same within one month.

The AG reported that an ambulance reg. number, UG- 6812M belonging to the entity had been stolen from the hospital yard and that by the close of the audit, the ambulance had not been recovered.

Furthermore, on verification of the entity’s assets register, the value of the ambulance had not been updated to indicate the loss.

The AO confirmed the theft of the ambulance and noted that staff who were suspected to be involved in the theft had been interdicted, adding that the matter is before the court. The committee notes that the loss of the ambulance impacts greatly on access to health services given the wide catchment area of the hospital.


The Auditor General noted that Shs 235.1 million was paid as residual arrears to 26 pensioners who had not been verified by the ministry of Finance.

The AO explained that the hospital received these funds as the year ended without a schedule; therefore, management relied on pension records at the source to calculate and make payments to beneficiaries. The Auditor General established that the oxygen plant was partially functional and, therefore, unable to produce adequate oxygen for use in the hospital and support other health facilities around the region.

The AO explained that the plant was functional but operating below capacity since it fills only eight cylinders instead of 25 a day. This was due to a malfunction that was yet to be fixed by the manufacturer. The Auditor General found that drugs worth Shs 197.2 million out of Shs 1.5 billion released were not delivered to the hospital. The AO pledged to engage the relevant authorities to have the matter handled.



+1 #1 Wainanchi 2022-09-28 09:10
Dear Uganda people.
Please stop robbing and stealing and cheating

We need civilized society good police and judiciary as well as laws to deal with rising crime and plundering of national resources and wealth.

Our Goverenment is doing its level.best to transform Uganda to rich and affluent society but it needs help from.each and every citizen to stop this devastating attempts to hamper our development.

1.Juficiary and Parliament. Please improve our laws and legal processes so that all offenders can be prosecuted for their crimes and stolen social. wealth be returned to those who are robbed included government and private sector.

All criminals caught in illegal Iraq fraudulent dealings must be apprehended and together with evidence quickly prosecuted.
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0 #2 Wainanchi 2022-09-28 09:16
2.Law enforcement authorities
Monitor and apprehend criminals with evidence ,boon then for 48 hours, and bring them to the ruling judge.

Remember Judgy Judy in.US series.
She would listen arguments and make quick rulings

Police should be increased in its numbers monitor traffic ,removing road offenders, and catching and chasing criminals

Canine dogs are perfect solutions and thieves and things should be caught by use of canine Unites and put behind the bars.

Uganda needs to build so many so many roads
Here is our precious labor force to help build Uganda and be educated and radicalized to be returned to the society as they do in many countries.
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0 #3 Wainanchi 2022-09-28 09:22
We can in such way quickly develop Uganda and its economy.

One of the other ways would be to use incarnati
ed inmates to work in various industries as labor fircen Food processing plants, gineries, tea and coffee plantations, nurseries ,agricultural sector,fisheries.

There are huge potentials in Uganda economy which can absorb these lost and unruly citizens and rededicate them and bring back to the society

This is nothing new folks.! Many developed democracies use exactly these methods to bring back their citizens to be law abiding ones.

Even thugs and mafias get lessons and change and how about our mafia which is stealing and cheating unpunished
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0 #4 Odinga Owiny 2022-09-28 18:50
You write like one of those thieves, but I may be wrong!
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+1 #5 Henry Baisi 2022-09-28 20:10
The AG found significant weaknesses as explained. What recommended actions did the AG propose and agree with the AO of the Ministry of Health to sort out this mess? Can the debate shift to these actions, please?
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0 #6 Lakwena 2022-09-30 08:12
Quoting Wainanchi:
Dear Uganda people.
Please stop robbing and stealing and cheating ...

... All criminals caught in illegal Iraq fraudulent dealings must be apprehended and together with evidence quickly prosecuted.

But Wainainchi, why are you lamenting because, this not the UPC, DP, FDC nor NUP government but NRM.

Where were you when Gen Tibuhaburwa in broad-day-light categorically told Hon Beti O Kmaya, to back off corrupt/thieves because, the corrupt are e.g. his favorite 5-star Hotel Investors, creating jobs.
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0 #7 Lakwena 2022-09-30 08:22
In other words Wainainchi, this is your NRM government of thieves, by thieves and for thieves.

In other words Wainainchi, what do you expect?

Listen up close Wainainchi, your Tibuhaburwa's (the inadvisable) argument is that: if the IGG (Beti) is armed with evidences and starts going after the thieves, the thugs will ship out our stolen money and invest in other countries.
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0 #8 Lakwena 2022-09-30 08:40
And Wainainchi, if the Police Dog handlers also steal the money for feeding the dogs in order to feed their starving families; what can a hungry dog do?

The rich thieves will simply throw pieces of fatty meat (not even bones) on their trail, and the dogs attention is diverted, and "mission impossible" is a jiffy and "accomplished" without a sweat and a trace.

Waininchi, Ugandans need a brand new government because, a government of the corrupt, killers and thieves cannot stop corruption, stealing and killing.
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0 #9 Lakwena 2022-09-30 08:44
E.g. where were you when Tibuhaburwa told Ugandans that he has no friends? People who do not have friends, only have enemies or see everyone as an enemy.

And where were you on 26th January 2017, when Gen Tibuhaburwa told off Ugandans that he is neither their servant nor employee.

In other word Waininchi, only the corrupt, thieves and killers do not care about others. Which is logically why they steal and kill their victims of theft without feeling.

Otherwise, why would anybody steal our tax money (collective sweat and blood) meant for the sick/ill and dying people? It is not different from taking away food from the mouth of someone dying of hunger.
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