A forensic audit into Uganda Airlines has revealed a catalogue of financial mismanagement, exposing how more than USD 42.9 million (about Shs 165 billion) has been lost or mismanaged over the past three years.
The damning report by the Auditor General paints the national carrier as a leaking vessel, with billions of shillings slipping away through fuel payments, ticketing fraud, untraceable transactions, and weak revenue controls.
Fuel Deals
The audit identifies fuel management as the single biggest drain. Uganda Airlines paid out USD 7.24 million (approximately shs 26 billlion) for fuel without providing evidence such as aircraft tech logs or supplier receipts to support the invoices.
Auditors also uncovered 761 instances where billed volumes exceeded aircraft fuel tank capacities, costing the airline USD 2.87 million (shs10 billion) in questionable charges.
On top of this, auditors flagged 158 invoices worth USD 1.22 million that appeared in the airline’s accounts but not on the supplier’s statements, including charges for aircraft not even in the Uganda Airlines fleet. Another USD 1.15 million (shs 4 billion) in penalty charges lacked documentation or contractual backing, raising suspicion of unjustified overbilling.
Combined, these fuel irregularities amount to more than USD 11 million, or roughly shs 41 billion, lost through weak controls and questionable dealings.
Bogus Refunds
In the ticketing system, auditors uncovered USD 919,927 (Shs 3.5 billion) paid out as refunds for tickets that had already been flown. Passengers and travel agents successfully claimed refunds for journeys already completed, an abuse made possible by weak reconciliation between ticketing data and refund approvals.
The most shocking finding came from ticket sales linked to Passenger Name Records (PNRs). Auditors found USD 27.17 million (Shs 103 billion) worth of ticket sales that could not be traced in the airline’s bank accounts. Each PNR should correspond to a verifiable payment, yet in thousands of cases, no link to bank deposits could be found.
This raises the possibility that either the funds were never collected, were diverted by intermediaries, or were siphoned off through collusion between insiders and travel agents.
More Leakages
The audit also highlighted USD 1.43 million (Shs 5.3 billion) collected in service fees but misclassified as taxes. Despite an internal directive abolishing service fees in October 2021, Uganda Airlines continued charging them without Board approval.
Other losses include USD 674,000 (Shs 2.6 billion) in taxes not collected at the point of sale, USD 1.1 million (Shs 4.1 billion) lost through unauthorized waived tickets and unpaid staff rebates, USD 968,000 (Shs 3.7 billion) in unpaid group reservations, and USD 262,000 (Shs 1 billion) in overpaid travel agent commissions.
Mismanagement
Taken together, the audit shows a national carrier struggling with systemic weaknesses. From paying for undocumented fuel to losing billions in ticket sales that never hit its accounts, Uganda Airlines has become a case study in how weak systems breed financial haemorrhage.
The findings also recall earlier scandals: inflated procurement contracts, nepotism in management, and investigations involving fraud flagged to Interpol. Now, with billions more exposed in the audit, public confidence in the airline is further eroded.
What Next?
The Auditor General has recommended urgent recovery measures, tighter reconciliation controls, and a forensic review of all disputed transactions. But pressure is now mounting on Parliament’s watchdog committees and law enforcement agencies to go beyond recommendations and hold those responsible to account.
For a state-owned airline that survives on taxpayer bailouts, the revelation that shs 165 billion has been lost or mismanaged in just three years is not just alarming, it is an indictment of corporate governance at the highest level.