By Our Reporters
Charles Mbire, a well appreciated inspirational Ugandan businessman, must be regretting why he accepted to serve as BOD Chairman of a Makerere company called Mak Holdings. Established 4 years ago, Mak Holdings was meant to ride on Makerere’s vast land estate and good will to enhance revenue mobilization and thereby reduce on dependence on government and releases from the treasury. In simple terms it was supposed to be the entrepreneur for Makerere University and desire to leverage on his vast connections prompted the University Council to beg Mbire (the MTN Uganda Chairman) to become BOD Chairman. Besides leveraging on the University land in the prime locations like Kololo, Makindye and other places to attract investors and joint ventures (under the PPP arrangements), Mak Holdings was also supposed to become the umbrella under which Makerere’s commercial units (like University Printery, Maize Mill, Bakery, Guest House, Bookshop, memorabilia shop and Makerere University Building Unit) were supposed to be harnessed and transformed into profitable enterprises. However, information contained in Auditor General John Muwanga’s report shows the anticipated Mak Holdings-spearheaded transformation may after all never be witnessed at Makerere-at least not during the powerful Chairman Charles Mbire’s life time. A Public Accounts Committee (PAC) member, quoting disgruntled Makerere insiders, says the biggest problem is that the guys running the Mak Holdings secretariat have been able to occasion so much mischief and misappropriate funds because the Mbire-led BOD members are too busy to closely supervise them. The current CEO is inadequately qualified Moses Nadiope who started out as a desk officer for the same company many years ago. As desk officer, Nadiope wielded more powers than Patrick Mutimba who was the CEO of the company because he was very close to top Makerere bosses in the main building some of whom used him to spy on and eventually frustrate Mutimba out of the job. Mutimba had been recruited by ex-VC Baryamureeba and suffered the wrath of Nadiope’s powerful backers the moment Baryamureeba was kicked out of the Makerere VC job. Mutimba served for 5 years and the position then was called Director Investments which later became equated to CEO Mak Holdings in the post-Baryamureeba era. When Nadiope, who stands accused for serving as AG CEO for too long without a substantive person being appointed, eventually got the job of Ag CEO Mak Holdings Ltd, he unleashed a vendetta of sorts by purging old employees for example of Makerere Guest House (GH) which is one of the units making up Mak Holdings. The Makerere Guest House affected 15 staffers (led by Lilian the accountant) took the University to court protesting Nadiope’s ill-conceived decisions and only a few weeks ago, panicky Makerere bosses (on realizing it was a bad case) recalled them back to their jobs and paid them damages in hundreds of millions! On the other hand the frequently-travelling Nadiope, whose ill-conceived actions resulted in this embarrassment for the University, continued enjoying the perks of his office without main building directing any sanctions against him. In fact, when the IGG was about to move in, Makerere top management advertised the job to get a substantive CEO November last year but the process curiously stalled in a manner that the aggrieved MPs believe was meant to shield Nadiope who was going to be ineligible for recruitment because of the very indicting findings contained in the Auditor General’s report that refers to the over Shs200m that was inappropriately spent from the GH. Nadiope had promised a lot on getting the job but today three years later, he would struggle to point out even one achievement and this is something very bad for the otherwise good business credentials for which Mbire, his supposed supervisor, is renowned for. The Auditor General’s report on page 50 makes very shocking details for which Mbire and other Mak Holdings BOD members should be embarrassed being the guys supposed to supervise the Nadiope-led management for the Mak Holdings Company. Ideally, even the Makerere memorabilia Shop is supposed to be under Mak Holdings but this isn’t the case yet Jackie Ayorekire, who currently operates it, hasn’t been complying with any revenue sharing agreement between her private business and Makerere University. All these are hurting the would-be excellent performance by the Company.
NADIOPE CAUSING WAR;
Nadiope is almost causing war among top University officials because, whereas some want all the Makerere commercial units surrendered to him at Mak Holdings, some big men like newly re-appointed Dean of Students Cypriano Kabagambe are strongly cautious of his management style. Reliable sources say Kabagambe has for long been resisting directives on him to surrender what remains of the University Bakery and Maize Mill. “Such guys are reluctant because of the way Nadiope has so far managed those commercial units under him so far. The Guest House doesn’t have even a van; they are just surviving on God’s mercy,” said a source. When the 15 employees of the GH were fired, Nadiope acquiesced to the bringing of new employees including a one Patrick who became its overall manager. But the two have since fallen out after Nadiope’s friends became bitter claiming that Patrick didn’t enough to cover their man when John Muwanga’s audit was going on. Kabagambe isn’t the only well-intentioned top management official disagreeing with Nadiope’s godfathers in the main building. Deputy University Secretary workaholic Yusuf Kiranda, a former Makerere guild president, is also said to be actively resisting pressure on his department to expedite the passing on of the University Printery to Mak Holdings so that it comes under Nadiope’s disputed leadership. If well managed, the different commercial units supposed to be under Nadiope’s Mak Holdings can potentially annually generate for Makerere over Shs10bn but because of the ongoing deliberate mismanagement, today its mostly the Guest House and the Printery that are bringing in some modest revenue. The others are in limbo and John Muwanga’s audit report (to which we are turning below) gives some insights why this is so. Currently the Printery brings in about Shs1.5bn annually and Guest House about Shs800m. At the GH, current manager Patrick’s predecessor Edward Lukabala quit to become Hall Warden protesting the manner Nadiope was supervising him. The MPs badly want these commercial units revamped so that Makerere can save on the billions spent out when the services (these units were supposed to offer) are outsourced. Angeline Osege, who chairs PAC, wonders why officers like farm managers remain on the University payroll when there are no farms to be managed anymore largely because of mismanagement. The MPs recently refused to vote for an increase on the money government daily allocates for its students meals (Shs4,000) on grounds that money is simply enough if the University management can act prudently and have the different commercial units up and functioning. “The University Bakery, which those officials deliberately run down, would make bread which is cheaper and sufficient within the Shs4,000 allocated per student per day. The University Maize Mill should be producing cheaper posho for the University to cope with the Shs4,000 government provides per student. Why scrap feeding students’ meals once service units like Kabanyolo are functioning well? You just produce maize from there, process it at the maize mill and all is well. These things are doable. They don’t require rocket science. You only need to have efficient managers in the Main Building to make and implement these business-wise decisions,” ranted an MP who sits on PAC who didn’t want to be named because h/she is a currently student at Makerere. The MP feared reprisals in case the big men in main building get to identify him/her. The MPs are also questioning the fate of the billions Makerere got to revamp a commercial unit called Board of Commercial Units (BOCU) which they claim was allocated colossal sums of money under the Presidential Initiative. Under BOCU, there was a building unit which President Museveni funded aiming at growing its capacity to do all university housing and road works so that money is saved while preserving training opportunities for the students graduating from the then Faculty of Technology. The idea was that this building unit would execute 85% of all the civil works in the University including the maintenance of the roads. The MPs believe all these well-intentioned initiatives by the President collapsed because of corruption and absence of corporate governance at Makerere. The MPs also want to revisit the 2005 transaction which saw the University Bookshop sold to Fountain Publishers. The concern is that the University management bosses improperly sent off former employees who got aggrieved and sued Makerere in Court where Shs300m was spent on their compensation. It’s a question amongst the MPs as to why commercial units like the guest house can collect as much as Shs800m in revenue annually and get its accounts frozen by URA for nonpayment of statutory fees (for both URA and NSSF). There is also concern that as of 2014, when the guest house was put under Nadiope’s Mak Holdings, it had no debts (was liability-free) meaning the business environment was supposed to improve but it’s shocking the only very old vehicle the unit has was bought over 20 years ago. In all the actions they are planning to sanction against Makerere top bosses, the MPs are ideally basing their anger on the shocking findings in the AG John Muwanga’s report.
MUWANGA’S AUDIT REPORT;
Firstly the AG says there is no way Nadiope or any other officer charged with the running of the guest house can have their performance assessed because it’s a business running without any strategic business plan that would be the basis for them to be evaluated. The auditors expose the fact that besides the guest house, the Mak Holdings Company doesn’t have any other source of income and in 2017, the GH single handedly shouldered all the expenditures incurred by the Mak Holding Company to the tune of more than Shs232m. This has hurt the GH’s liquidity position and its smooth operations. The GH’s assets are easily lost because there is no fixed assets register for the entity. And by the way, the auditors reveal that this GH is the only commercial unit that is so far under Mbire-supervised Mak Holdings. The auditors wonder why, despite a clear governing council resolution, the University Printery has never been passed on. Sources say the Deputy University Secretary Yusuf Kiranda has been reluctant to pass it on because the US department is skeptical about Nadiope’s capability to run it well. The auditors show that the GH was put under the Mak Holdings without any handover report testifying to the actual value of the assets passed over. The auditors also question why the Bamboo Hall, that was meant to be a revenue source for the GH, is still not under the GH management. It’s being used as a lecture hall without any revenue coming to the company. In absence of a strategic business plan, the auditors conclude that Mbire-supervised Nadiope operates without direction and his activities can’t be evaluated. It’s hard for the Mbire BOD to tell whether the business is being well managed because there are no operational policies and guidelines. There is high risk of asset losses and fraudulent transactions because the company operates without internal control systems and whoever requisitions for, gets money just like that. There is no way the assets declared, stated or disclosed in the entity’s financial statements can be authenticated or validated because the entity operates without a proper assets register. One would ordinarily expect that an entity supervised by a high profile businessman like Mbire would naturally comply with some of these very basic good corporate management business practices. That there is no mechanism in place through which the University Council can supervise the activities of entities and commercial units placed under Mak Holdings. The auditors clearly wonder how such an entity supposed to be big and so powerful can operate without “a business strategic plan, organization policies & guidelines and internal control systems.” Management is also faulted for refusing to fund the Mak Holding Company leaving it to be 100% funded on the merger revenues collected by the GH. According to the Rwandeire Visitation Committee report, Mak Holdings was meant to be the entrepreneur on behalf of Makerere by undertaking investments in a manner not prejudicial to University interests. It would acquire businesses and manage property on top of acquiring and leasing property. Even for the units that were never brought to be under Mak Holdings on false claims that they were closed, the audit report faults management on grounds that normal closure procedures were never followed. Closure audits are supposed to have been conducted to know the asset status at the time of closure.
MAK ENDOWMENT FUND (MakEF);
This was established to mobilize and receive funds on behalf of Makerere to enable the funding of scholarships, research, infrastructure, teaching and learning. It’s also meant to manage Makerere investments that are situated locally and offshore. Locally, M/s Gen Africa Ltd was contracted and Crown Agents Investment Management Ltd (CLAIM) was retained as the off-shore fund manager for Makerere. The governing council decreed that, to realize enough finances towards this cause, each of the students pays Shs10,000 towards this cause annually. It’s charged on their fees and this brings the total collected annually to Shs355,400,000 (from the 35,540 students Mak officially says it has). The Auditor General’s report shows that this cash has been collected annually since the FY2014/2015 making it three years now of continuous collection. In three years, close to Shs1bn is ideally supposed to have been collected from the tuition-paying students. Yet that isn’t all. Each of the students at Makerere College pays Shs3,000 per term for the same cause. And for Makerere P/S, each pupil is compelled to pay Shs2,000 per term. These are considered to be University-founded schools along with the Child Study Center where each pupil pays Shs2,000 per term. Additional revenue for the MakEF was supposed to be mobilized from the alumni and friends of the University. The AG observes that inadequate results have been registered mobilizing revenue in this direction largely because the MakEF effort is inadequately staffed; there is only one staffer. The Rwandeire report makes very specific findings showing ineptness on part of the University management. That as of end of 2016, only Shs214m had been recorded to have been realized from the paying institutions where billions were expected. It’s curious where the rest of the monies went since its mandatory each University student must pay the Shs10,000 annually since its part of tuition and the same goes for the College and Primary school. The monies were fixed in banks but fetched only Shs503,013 in interest! Management is also culpable for frustrating its own MakEF initiative by refusing to hand over money collected from students (the Shs10,000 annually) and thereby hampering progress. There is also a possibility of student numbers being under declared in order to remit less. There are also curious delays to transfer the collected funds to the MakEF Custodian Account. For comments, call/text/whatsapp us on 0703164755!
