Uganda Broadcasting Corporation (UBC) is yet to get back the Shs70bn land from Burahya County lawmaker, Margaret Muhanga despite a decision by Supreme Court ordering her to return the land title of 23.1 acres to the National Broadcaster.
This is according to the December 2019 audit report by Auditor General, John Muwanga.
“I noted that the Corporation has not yet recovered the land title for land along Bugolobi Faraday Rd valued at Shs70.545bn. The continued failure to retrieve the title exposes the land to a risk of other unscrupulous deals,” the report reads in part.
In 2016, the Committee of Commissions, Statutory Authorities and State Enterprises (COSASE) learnt that UBC leased the 23.1 acres of land located in Bugoloobi to Habba Group (owned by businessman Hassan Bassajabalaba) but Supreme court cancelled out the transaction and ordered UBC to refund Shs11bn.
After the lease, the land title traded hands among three owners within one hour.
As soon as land was leased to Habba Group, the land was sold to Deo & Sons who later sold it off the land to Muhanga.
Although the transaction documents recorded 23 acres, the asset register at UBC cited 20 acres sold yet the former ED of UBC Paul Kihika told MPs the land sold was 18 acres not 23 acres.
During the COSASE investigations, UBC said that the land was leased at Shs20bn, but Muhanga said she only paid Shs.10.2bn and that she raised the money after selling off her goats and cows.
The audit report also highlighted that the Statement of financial position Plant, Property and Equipment was stated at Shs265bn as at 30th June 2019.
However, these were last revalued 10 years ago with auditors warning that the failure to revalue implies that assets are not carried at fair value as stated in the financial statements.
Additionally, Muwanga said that although Mega FM acquired an Antenna system with its accessories worth Shs48.9m, this was not reported in the schedule of plant, property and equipment.
UBC in its financial statements showed that trade & other receivables amounted to Shs26.5bn, with UBC having assigned two companies to undertake debt recovery but three months after the award, only Shs44M of the outstanding amount had been recovered and Shs10.18bn was rejected by the debtors.
The Auditor General said that the uncertainty surrounding the recoverability of the debts implies that the reported receivables figure may be over-stated.
Additionally, the auditors discovered that contrary to Section 10.21.12 of the Treasury Instructions 2017, advances totaling to Shs62.2M lacked accountability documents, which left auditors incapacitated to determine if the funds were properly utilized or expended for lawful purposes.
During the audit, UBC’s trade and other payables are said to have increased by 1.7% from Shs51.6bn in 2018 to Shs52.6bn in 2019 with auditors warning that the Corporation is potentially faced with a risk of litigation over nonpayment with analysis revealing that the bulk of the payables relate to unremitted taxes and statutory deductions.
The audit also revealed that UBC does not have a mechanism to monitor which adverts were run and for how long, making reconciliations and audit difficult, warning that this omission can lead to revenue leakages as some adverts may be aired but not billed.