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Report Of The Committee On Local Government Accounts On The Auditor

Generals Report For Financial Year 2014/15 On District Local


Governments And Municipal Councils.

1.0 Introduction
Article 163 (5) of the Constitution of the Republic of Uganda mandates
Parliament to, within six months after the Auditor General has submitted an
audit report on the Public Accounts of Uganda, debate and consider the report
and take appropriate action.

Rule 170 of the Rules of Procedure of Parliament mandates the Committee on


Local Government Accounts to examine the audited accounts in relation to the
Report laid before Parliament by the Minister of Local Government under
Section 88 (8) of the Local Governments Act, CAP 243.

Section 88(8) of the Local Governments Act, CAP 243 requires the Minister of
Local Government to lay before Parliament the reports from the District Public
Accounts Committees. However, no such Report has been laid on the floor of
the House since the Auditor Generals Report was tabled. Noting that the
Constitution is the supreme law of Uganda and pursuant to Article 163 (5) of
the same Constitution, the Committee on Local Government Accounts
proceeded to consider the Auditor Generals Report on Local Governments for
Financial Year (FY) 2014/15 covering District Local Governments and
Municipal Councils.

In addition to District Local Governments and Municipal Councils, the Auditor


Generals Report for FY 2014/15 included Town Councils which the Committee
was not able to consider because of the time constraint arising from the
dictates of Article 163(5) of the Constitution that requires Parliament to
dispose off a report of the Auditor General within 6 months after it is
submitted to Parliament.
The Auditor Generals Report for FY 2014/15 was laid in Parliament in

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January 2016. However, it could not be considered before today because
Parliament was going through an electoral process for new office bearers.
Following the constitution of the new Parliament, Committees were put in
place in July 2016 and the induction of new Members of Parliament continued
till late August 2016. The Committee could only commence work at the end of
August 2016 and it has been able to handle the 111 District Local
Governments and 22 Municipal Councils within three (3) months and now
presents its report to this House for consideration.

2.0 Methodology

The Committee considered the detailed Audit Reports of the 111 District Local
Governments and 22 Municipal Councils. The Committee then interacted with
the audit entities in their respective Audit Branches of Gulu, Arua, Soroti,
Mbale, Jinja, Masaka, Mbarara, Fort Portal and Kampala. In a few instances
some units were invited to meet the Committee outside their audit branches
for various reasons.

The Committee also conducted site visits to some of the infrastructure projects
mainly in the municipalities.

The Committee then held meetings with Central Government Ministries whose
decisions directly contributed to some of the Audit queries raised in the Report.

3.0 COMMITTEE FINDINGS, OBSERVATIONS AND RECOMMENDATIONS


ON THE AUDITOR GENERALS REPORT FOR THE FINANCIAL YEAR
2014/15.

PART 1. CROSS CUTTING ISSUES

1. PHYSICAL INFRASTRUCTURE

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1.1 Delayed Completion of Civil Works
The Audit report highlighted delayed completion of civil works in most of the
districts. The Contracts were in some cases rolled over or extended or both.

The Committee established that in most of the instances the capacity of the
contractors is lacking. The defaulting contractors are often awarded contracts
because those in authority have vested interests in them. This can be seen in
the fact that very often the contractor is paid most of the money for the
contract long before the work is finished and in some instances after the
disproportionate payment the work is abandoned. A case in point is Mbale
Municipality where it was reported that the work on USMID roads was 87%
complete and the payment to the Contractor was at 84%. When the Committee
visited the site the works were much less than 87% completion and the
contractor was not on site. A similar case is in Moyo District where the
contractor on Laropi-Palorinya Road was over paid compared to the work done.

The Committee found a number of instances where the works continued


without extension or works continued beyond the extension period like in
Adjumani district where the Accounting Officer wrote a letter requesting for
extension of a contract from March 2015 to May 2015 in April 2015, the
authority to extend was written on 11th May 2015 granting extension to 30th
June.

The contract did not end even after the period of extension. Another extension
should have been sought but it was not. However, the work continued.

In the appendices are pictures of selected incomplete projects.

The Committee notes that for most of the incomplete works the following
problems were cited:
i. Delayed procurement processes;
ii. Lack of supervision by the District Engineers and the Accounting

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Officers.

Observations
The Committee observes that in regard to incomplete projects there is
negligence by the District Administration without due consideration to the
financial loss arising there from and the loss to the intended beneficiaries in
terms of service delivery.

Recommendation
The Committee recommends that:
i. Where negligence is cited, the respective Accounting officers should be
held liable for delayed completion of works and for any additional costs
involved;

ii. All contractors who fail to execute works on schedule should be


blacklisted;

iii. The respective contracts committees should ensure timely consideration


of all procurements as per the approved district procurement plan.

1.2 Road Fund


The Road Fund was established through the Uganda Road Fund Act, 2008 to
provide for both periodic and routine maintenance of public roads across the
Country. The disbursements to the respective entities are on a quarterly basis
upon receipt of a satisfactory evaluation of agency quarterly work plans. The
work plans are drawn by the District Roads Committees where the District
Engineer is a Secretary.

The Committee found anomalies in the operations of the road fund for
example;
i. The Ministry of Finance, Planning and Economic Development
(MFP&ED) is not consistent on the release of funds as per the accounting

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entitys approved work plans.
ii. Funds are utilized by entities that do not have functional district roads
Committees; putting in question the basis for the release of the funds to
that entity, the choice of works undertaken by the entity; and ultimately
the value for money in the execution of the unapproved works.
iii. Un-explained variation in the costs of similar works in different entities;
for example in Masaka Municipality UGX. 202 Million was used to work
on 500 meters of low cost tarmac on a sloppy terrain while in Gulu
Municipality UGX 723 Million was used on low cost tarmac on 1.37km
of road in a relatively flat terrain.

Recommendations
The Committee recommends that:
i. Any district found not to have a functional district roads Committee
should not access the Road Fund.
ii. The MFP&ED makes timely releases of road funds as per the approved
Budget allocations to the entities.
iii. Municipalities should prioritize low cost road sealing under the Road
fund.
iv. The Ministry of Works should standardize the unit cost of similar road
works on Force Account.

1.3 Status of Uganda Support to Municipal Infrastructure Development


Program (USMID) Project Implementation.
Under the agreement with Government of Uganda (GOU), the International
Development Agency (IDA) agreed to provide SDR 97,400,000 (Ninety Seven
million four hundred thousand Special Drawing Rights (SDR approximately
US$150,000,000) to finance the program activities. The program is co-funded
by GOU to the tune of US $ 10 million. It became effective on 4thSeptember,
2013, and is implemented through the Ministry of Lands, Housing and Urban
Development (MLHUD) in 14 Municipal Councils namely; Arua, Gulu, Lira,

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Soroti, Moroto, Mbale, Jinja, Entebbe, Masaka, Mbarara, Kabale, Fort-portal,
Hoima and Tororo. It is expected to run for 5 years (FYR: 2013/2014 to
2017/2018). The main objective is to improve urban service delivery.

The funds were divided into two (2) separate categories of activities, namely,
Capacity Building and Infrastructure Development. The Auditor General
queried delays in the projects. The Committee learnt that the Municipalities
were clustered under one contractor for a cluster of Municipalities as follows:
Arua, Gulu and Lira;
Mbale, Tororo, Soroti, Hoima and Fort Portal;
Entebbe, Jinja and Masaka;
Mbarara and Kabale;
Moroto.

Capacity Building Grant


Each of the Municipalities received UGX. 911,117,034 for Financial
Years 2013/14 and 2014/15 for purposes of capacity building. The
Committee was informed that the funds were supposed to be spent for
Retooling, Career Development Training and discretional capacity
building.

The Committee was given the list of beneficiaries of capacity building


fund from the respective municipalities.

Infrastructure Works
The current status of the infrastructure works is as follows:
Arua, Gulu and Lira the works under batch 1A has been completed
and commissioned.
Mbale, Tororo, Soroti, Hoima and Fort Portal; work is far from
completion.All of them have invoked the liquidated damages clause of
the Contract where the contractor is charged a portion of the contract
sum daily for 100 days after which the contract may be terminated. This

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was after each of the municipalities had extended the works three or four
times.
Also note worthy in this cluster is the fact that all USMID roads under
this project are made of Asphalt Concrete except for Soroti Municipality
that is a Surface Dressing.
Entebbe, Jinja and Masaka; the works are satisfactorily complete.
Mbarara and Kabale; this cluster failed to take off after two unsuccessful
attempts to procure a contractor. They have since got separate
contractors who are now on site. The works in these two municipalities
were delayed by two (2) years. The contractors are now on course
expected to finish the works in March and April 2017 respectively. The
Committee notes that after the first procurement process, Kabale
Municipality wrote to the Project Support Team (PST) to allow them
handle the procurement, a plea that fell on the deaf ears of PST.
Moroto Municipality was clustered alone and they are working on a bus
terminal. The works are ongoing.

In the appendices are pictures of selected some USMID roads.

Observations
The Committee notes with serious concern that:
i. The entire delay in the implementation of works under the project was
occasioned by clustering the works.
ii. All municipalities focused on roads while Moroto Municipality was given
a bus park terminal in the first and second phase of the project.
iii. Civil works consultant for Moroto Municipal council was procured in
April 2014 and contract signed in July 2014, but the consultant was
paid UGX 120Million covering the months of April May and June for no
work done.
iv. Soroti Municipalitys road design was changed from Asphalt Concrete to
mere surface dressing without a reduction in cost with an excuse that

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Soroti Municipality do not have a heavy traffic and yet its on a highway
to South Sudan.
v. The project was centrally handled purportedly because Local
Governments lacked capacity to handle the procurement yet in reality
they were abusing the project.
vi. The Capacity Building grant was abused. A case in point is:
a. Where Town Clerks were flown to Dubai and Arusha to attend the
Smart Cities Conference and Arusha for benchmarking; instead of
taking the Engineers, physical planners or Environmentalist who
would directly benefit the project.
b. Some trainings were identified at the Center for staff in the local
Governments. The local Governments could have had other
training needs in the core areas of the project.

Recommendations
The committee recommends that:
i. In future capacity building funds should be left to the municipalities to
handle.
ii. The project support team should withdraw from the Management of
procurement and should not be a permanent team in the Ministry.
iii. The PST should be held responsible for the mess in the implementation
of the project and they should be further investigated by the relevant
organs of Government with a view to prosecution.
iv. The Auditor Generals recommendations on the USMID project should be
upheld.

1.4 Regional Mechanical Workshops and the District Rehabilitation Road


Unit (DRRU) under Ministry of Works and Transport.

In the working of the Committee and upon inspection of roads the Committee
was informed by the Municipal Engineers that following complaints from local

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governments in 2013, H.E. the President of the Republic of Uganda directed
the Ministry of Works to support the local governments by opening up new
roads and handing them over to the districts for maintenance.

Since 2013 the Ministry of Works created a unit called the District
Rehabilitation Road unit (DRRU) with branches in four regions of Uganda as
follows:
Gulu to serve Northern Uganda, West Nile and Karamoja;
Luweero to serve Central Uganda;
Mbale to serve Eastern Uganda; and
Mbarara to serve Western Uganda.

The unit receives UGX. 4 billion annually and the districts presented their
needs to the Ministry of Works. Since2013/14 FY 82.9 kms of roads have been
opened and handed over to the districts. However no roads have been opened
in the Gulu Region.

The Ministry of Works has also since opened up regional workshops to repair
equipment for road construction with branches in Gulu, Jinja and Mbarara.

The Local Governments informed the Committee that the equipment for road
construction that was given to them is of poor quality, weak and unable to do
heavy duty work and therefore there are frequent breakdowns. Unfortunately
the Ministry of Works asserts that Mechanical Workshops are poorly equipped
and poorly financed. That renders the units with the exception of Jinja
ineffective.

Observations

i.The Committee in its interaction with officials from the Ministry of Works and
Transport at Parliament discovered that the heads of the units did not grow
through the Public Service ranks in the Ministry of Works and Transport and

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they looked very junior. They work directly with the Permanent Secretary of the
Ministry of Works and Transport to whom they are directly responsible.

ii.The Committee noted that the UGX. 4 billion that has been released
annually since 2013 has been abused. For not having handed over any roads
in the Northern Region the Engineer responsible for the region and the
Permanent Secretary are to blame for the mess and must account for the
funds.

Recommendations

The Committee recommends that:


i.The UGX.4billion annually released to DRRU should be redirected to the
mechanical workshops with immediate effect who in turn should take over the
responsibilities of DRRU.

ii.The mechanical workshops should test the equipment after repair by


opening up roads in the districts.

iii.The Head of the DRRU in Gulu together with the former Permanent
Secretary should be investigated for abuse of public funds with a view to
prosecution.

2. EDUCATION
2.1 School Infrastructure
The Ministry of Education set guidelines on the kind of infrastructure that
schools must have. The ideal infrastructure indicators required of every
Government Aided Primary School is as follows:

Indicator Recommended Level


Teacher Pupil Ratio 1:55
Classroom Pupil Ratio 1:55

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Desk Pupil Ratio 1:3
Permanent Teacher Accommodation 1:1
Latrine Stance pupil ration 1:40

The Audit report revealed insufficient and poor quality infrastructure and
equipment in a number of UPE schools. The Committee went ahead to ask
some Accounting Officers to submit the Education status in their units and the
committee findings were that they did not comply with the set standards.

The Local Governments do not have the capacity to fulfill the obligation
imposed on them by the Ministry of Education Science Technology and Sports
(MOESTS).

Observation
The Committee observed that the MOESTS that set the standards does not
adequately facilitate the schools to meet those standards.

Recommendation
The Committee recommends that the MOESTS should provide sufficient funds
to the District Local Governments to improve infrastructure and equipment in
all Government Aided schools to meet the set standards.

2.2 UPE Grant


The Universal Primary Education Grant to Primary Schools is sent directly to
individual schools and is meant to be utilized following the guidelines below:
50% Instructional Materials;
30% co curricular activities
15% School Management
5%Administrative Expenses.

However the Committee found that in a number of districts there are Head
Teachers Associations that resolved to withdraw 5% percentage of the UPE

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funds from the respective school accounts and remit it to an account
maintained by the Association to support co-curricular activities at levels
beyond the respective schools.

Observations
The Committee observed that:
i. The practice is irregular as UPE funds are meant for particular activities
within the respective schools.
ii. Government funds cannot be diverted to a private account where the
Auditor General has no access. Expenditure of all Government funds
must be audited by the Auditor General in accordance with Article 163 of
the Constitution.
iii. The responsibility to support co-curricular activities outside the
individual schools lies with the respective districts.

Recommendations
The Committee recommends that:
i. The practice must stop immediately;
ii. The Districts should budget for co-curricular activities.
iii. The culprits in diversion of UPE funds should be investigated and funds
be recovered from them.

3. PAYROLL MANAGEMENT

3.1 Anomalies in Salary Payments

A number of anomalies were highlighted by the audit report in regard to salary


payments. This ranged from overpayment of salaries, underpayment of
salaries, and nonpayment of hard to reach allowances, nonpayment of
pensions, staff missing on the payroll and nonexistent/invalidated staff
appearing on the payroll.

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All these anomalies were blamed on problems associated with the IPPS and the
IFMIS systems. The Committee received reports that Government migrated to
the said systems before adequately training the staff of the Local Governments
to operate them. As a result errors arising from lack of capacity were realized.

In most of the districts, the anomalies were rectified through salary


deductions, payment of salary arrears including hard to reach allowances,
reinstating staff who had been erroneously deleted and cleaning the payroll of
nonexistent staff.

Observations
The Committee observed that it is wrong for Government to operationalize the
use of new systems before adequately training the users. It demotivates the
affected staff and their colleagues who were supposed to benefit from their
services. It also causes financial loss to the affected people.

Recommendations
The Committee recommends that:
i. Government should desist from introducing new Information Technology
systems without adequately preparing the users.
ii. In the case of IPPS the Ministry of Public Service should conduct
continuous capacity building for the users.
iii. In instances where the anomaly has been rectified the query should be
dropped.
iv. In instances where the anomaly has not been rectified the Accounting
Officer must start the rectification process immediately and in instances
where the rectification process is ongoing, it must be done to its
conclusion before the next Audit in Financial Year 2016/17.

3.2 Deductions from Salary Accounts with existing Personal loans


The Committee found instances where some Officers in Local Governments

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owed Government funds arising either from over payments or misuse of
Government funds. The Accounting Officers are obliged to recover the funds
from the respective Officers salaries. However, some of the Officers have
existing personal loans that have made the deductions impossible.

The Committee was informed that under the IPPS system deductions that are
more than 50% of ones salary is impossible to effect because the system
automatically drops the individual from the payroll.

Observation
The Committee observes that personal loans are a personal decision of the
individual and should not stop the recovery of Government funds from that
individual. This is more so where an individual misuses Government funds and
is supposed to make good the misused sum.

Recommendation
The Committee recommends that the Ministry of Public Service must devise a
mechanism of having such funds refunded irrespective of the personal loans
taken by the individual.

3.3 Salary Arrears


Audit reported salary arrears in the Local Governments amounting to UGX
7,796,033,449.

The Committee was informed that the Permanent Secretary/Secretary to the


Treasury (PS/ST) wrote to all Local Governments directing them to submit all
pending salary arrears and those submitted were cleared. In addition the
payment of salaries was decentralized from then on and must be properly
budgeted for by the respective Accounting Officers and paid on time. The
existence of salary arrears to date is an indication that the Accounting Officers
in the affected Local Governments either did not submit the arrears in question
for clearance or did not properly budget for the salaries of staff in their districts

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following the decentralization.

Observations
The Committee observes that:
i. Failure of an Accounting Officer to submit all the arrears in their local
government or to adequately budget for the wage bill is an indication of
incompetence.
ii. Non-payment of salary arrears to staff demotivates them and in turn
affects service delivery.

Recommendations
The Committee recommends that:
i. The Accounting Officers of the affected Local Governments should
immediately submit the list of arrears to the Ministry of Public Service
for clearance; and that the MFP&ED after verification clear all the all
salary arrears by the end of the Financial Year 2016/17.
ii. The Ministry of Local Government (MoLG) should build the capacity of
the Local Governments in the area of budgeting.
iii. Any Accounting Officer who does not pay salaries on time without a
sound reason should be reprimanded.

4. STAFFING LEVEL
The Audit report indicated understaffing in most districts and Municipal
Councils.

In addition to staffing gaps there a number of officers who have been assigned
responsibilities to care take particular dockets or functions by Accounting
Officers.

The Committee noted that in some instances officers were found to have acted
for more than six months contrary to Public service Standing Orders.

This situation has been attributed to lack of a sufficient wage bill and the ban

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on recruitment by the Ministry of Public Service. The Committee was informed
that the districts have made efforts to fill the vacant posts by writing to the
Ministry of Public Service requesting for authority to recruit. However, the
Ministry of Public Service only gives them authority to recruit depending on the
availability of a wage bill.

For the positions where authority has been given, the Districts have gone
ahead to advertise and have the positions filled. However, there are positions
like that of District Engineer, which has failed to attract candidates. Some
districts have advertised more than three times consecutively with no success.

There are districts that do not easily attract staff because they are hard to
reach. Such districts may receive positive responses to adverts but there is a
high staff turns over. These included Bukwo, Kween, Namayingo, Buhweju,
Kalangala and Buvuma districts among others.
The Committee noted a weak and incompetent inspectorate department of
MoLG in supervision of accounting officers. The Committee also discovered
that a number of Accounting Officers were not up to the task; they are either
ignorant of their roles or incompetent.

Observations
The Committee observes that:
i. Low staffing levels against the approved staff structure is an indication of
poor service delivery. The individuals supposed to occupy positions in
the staff structure are each meant to provide a given service to the
population either directly or indirectly. Having fewer staff greatly impacts
on the quality of service.
ii. Keeping staff in acting capacity for more than six months demotivates
them and also compromises on service delivery because a staff in acting
position does not have confidence to make certain decisions.
iii. The qualification requirements for some jobs are too stringent to attract
qualified personnel. This is so in the case of a District Engineer where

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the requirement is a registered Engineer. The Committee observes that
the reality is that registered Engineers are on high demand in more
lucrative areas. Even in instances where they get registered while
working with a Local Government, they leave shortly after registration.
The Committee notes that the requirements for the position of District
Engineer should be revised to a level that qualifies to do the job but not
necessarily a registered Engineer. However, if the Ministry keeps the
position at the level of registered civil engineer then the emoluments
should be made competitive.

Recommendation
i. The Committee calls upon Government through the Ministry of Public
Service to allocate sufficient resources for Staff Wage Bill and lift the ban
on recruitment of staff in the District Local Governments.
ii. The Committee recommends and urges Government to have staff
recruited as per the staffing structures of the districts.
iii. There should be a review of the qualifications for the position of District
Engineers; and a commensurate remuneration be provided.

5. HEALTH
Section 2.1.2 of the Local Government Management and Service Delivery
(LGMSD) program manual states that LGs will deliver services in conformity to
the standards as dictated by the laws and regulations of Uganda and under
section 2.1.1.D health service delivery packages or minimum standards for
proper functioning of health centers were set as follows:
a) District Standards for Population service level.

No. Indicator Maximum Served Population


1. District Hospital 1:500,000 or per district
2. Health Centre IV 1:100,000 or per county
3. Health Centre III 1:20,000 or per sub county

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4. District Store for drugs At least one

The Ministry of Health set guidelines for the level of services to be delivered at
the different levels of Health Units in the Local Governments and this then
dictates on the infrastructure and personnel to be employed at the different
levels of Health Units.

The Audit report raised a number of queries in the Lower Local Governments
concerning the state of the Health Centers against those guidelines. In all the
instances the Health Centers in question fell far below the required standards.

Observations
The Committee observed a number of gaps in the Health service delivery
notably;

i. Low staffing levels especially in the lower Health centers for critical cadres
of midwives and nurses,
ii. Gross under funding of the health facilities for both operational funds and
recurrent budgets.
iii. Poor reconciliation on the type and amount of drugs sent by National
Medical Stores (NMS) and the Procurement Plans of the Health Centers
under push system operated by the (NMS). Under this system Health
Centers (HC) do not ask for particular medicines but receive some
unsolicited supplies from NMS.
iv. Drugs supplied with a short shelf life.
v. poor storage of drugs in many Health Centers;
vi. Expired drugs not being collected by NMS in time or disposed off in wrong
and dangerous places like Alyat Swamp where expired drugs from Aboke
Health Center IV were reported to have been dumped.
vii. Non-functionality of Constituency Health assemblies which are supposed to
play the oversight role in the health sub districts.

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viii. Non-functionality of ambulance facilities countrywide and where they were
functional, the HC can barely afford to maintain them.
ix. Lack of key personnel to run modern equipment like Radiographers.
x. Nonfunctional equipment including, X ray machines, out modeled dental
chairs as was observed in Kamuli Hospital;
xi. Non-functional maternity wards, theater operation tables and even those
that were found were not suitable for use by persons with disabilities as
was seen in Kiboga and Kawoolo Hospitals.
xii. Patients are congested in wards with some of them lying on the floors and
on the verandahs as was seen in Kitgum Hospital.

Recommendations
The Committee recommends that:
i. The Ministry of Health should ensure that Health Centers are adequately
facilitated in terms of budgetary resources and MFP&ED should remit
sufficient funds to the districts for maintenance of ambulances.
ii. The National Medical Stores should abolish the practice of push system and
should also collect expired drugs in time.
iii. Government should facilitate the attainment and implementation of the
standards it sets for the health sector in the country.
iv. Government should prioritize a complete renovation and rehabilitation of all
general hospitals in the country which are all dilapidated.

6. LACK OF LAND TITLES


Regulation 58(4) of the Local Governments Financial and Accounting
Regulation, 2007 requires a Local Governments land to be properly registered
and titled. It was however, observed that most Local Governments did not have
land titles for a number of their properties.

Consequently, the land is exposed to risk of encroachment and disputes.

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The Committee was informed that some local Governments are in the process
of acquiring land titles but due to resource constraints, they can only acquire
them in a phased manner. Most of them have only acquired one or two land
titles in a Financial Year.

The Committee commends Koboko, Kayunga and Namayingo Districts for


prioritizing the acquisition of land titles.
However Kayunga and Bulisa Districts are faced with unique problems in
regard to the acquisition of land titles. In Kayunga District it was reported that
the acquisition of land titles is difficult because there are conflicting cultural
institutions in the District while in Bulisa District there is a Presidential
Moratorium on the allocation of land in the district due to conflicts relating to
the discovery of oil.

Observations
The Committee observed that:
i. Much as the acquisition of land titles is costly, a number of districts
have not prioritized the activity. Some of them like Kiryandongo District
have not even surveyed their lands so they do not know exactly how
much land belongs to them, Kitgum and Sembabule Districts do not
have a single land title.
ii. The Committee noted the lack of support to Local Government by the
Central Government specifically MLHUD in acquisition of land titles.
This was attributed to a lack of dedicated budget line or outright lack of
resources.
iii. The Committee noted varying cultural dictates surrounding land
acquisition.

Recommendations
The committee recommends that government should engage cultural and
religious institutions with a view of coming up with an amicable solution with
regard to land owned by institutions on which government has infrastructure

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7. LACK OF INFORMATION TECHNOLOGY (IT) POLICY
According to Regulation 110(1) Computer and Information Security of the
Local Governments Financial and Accounting Regulations, 2007 the Chief
Executive is required to designate an officer to ensure that adequate
Information and Communication Technology (ICT) policies are established and
are applied to enable adequate security and protection over computers and of
data held on computers or information systems operated by the Local
Government.

The Audit report cited a general lack of ICT Policies in a number of local
governments. The Committee was informed that the districts are in the process
of developing their ICT policies and in some of them like Koboko District; the
policy has already been approved by Council.

The Committee was also informed that the staff structures in the districts at
the time of audit did not provide for the position of ICT officer. However a new
structure was approved in September 2016 and among other things it provides
for the position of ICT Officer.

Observations
The Committee noted that today there cannot be efficiency in the operations of
any Government without the use of ICT; and that ICT across all Local
Governments must be uniform.

Recommendations
The Committee recommends that Accounting Officers;
i. Liaise with the Ministry of Information and Communication Technology
in the development of Information Technology policy for their respective
entities to ensure uniformity in all Government institutions.
ii. Urgently recruit Information Technology Officers for their administrative
units.

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8. IRREGULAR TAX LEVY
The Audit report highlighted an irregular tax levy by the districts called
Development Tax on Contracts at a rate of 2% in most districts amounting to
UGX 409,672,340. Sections 13(0) of Part IV of the fifth schedule of the Local
Government Act CAP 243 (as amended) requires any other source of revenue
that Council may wish to levy to be approved by the Minister before it is
assessed, levied and collected.

Observations
The Committee observed that:
i. Some districts continue to levy the irregular tax against the law.
ii. The tax was levied illegally as it has no locus in the law and affects
service delivery; since part of the development grants went into paying
the tax contrary to the intended objective.

Recommendations
The Committee recommends an immediate stop of collection of the tax levied
on development projects and no further levy should be made on development
grants.

9. UNSPENT BALANCES
The Audit report showed instances of unspent balances at the end of the
financial year. The Committee observed that this is a cross cutting problem
that originated from late releases by the Ministry of Finance, Planning and
Economic Development towards the end of the fourth quarter of the Financial
Year of the year under review. The Committee received reports that the
computer programs that enable the use of the released funds failed shortly
after the release was made towards the end of the last quarter.

Observations
The Committee observes that:

22
i. The late release of funds is actually the reason for the unspent balances
at the end of the FY resulting into non-delivery of services to the
population.
ii. The committee noted ineffective preparations by the Accounting Officers
to utilize the funds.
iii. The Committee further noted that delayed release of funds was due to
non-accountability for the previous quarter.

Recommendations
i. The Committee advised Local Governments to prepare sufficiently and
adhere to their approved procurement plans among others for the
development grants and follow their budgets as approved to utilize funds
as soon as they are released.
ii. The Committee also recommends timely release of funds by the
Accountant General.

10. LOCAL REVENUE


Regulation 11(g) of the Local Governments Financial and Accounting
Regulations 2007 requires the Head of Finance to supervise and ensure the
prompt collection of all revenue due to the council and bring promptly to
account all revenue.

Audit reported a number of instances of under collection of revenue in the


Local Governments.

The Committee found some districts collecting as low as 99,000,000 annually.


The reasons for under collection included:
i. Government Policies that abolished tax on certain items that were the
backbone of the economies of some districts. This can be cited in the
abolition of Cess tax on produce affecting districts that are
predominantly agricultural like Kabale and Kanungu that were badly
affected by the abolition of Cess on potatoes. The abolition of bodaboda

23
fees can also be categorized as such.

ii. In the budget Call circular BPD 86/107/02 dated 29th January 2016,
paragraph 37 where the PS/ST advised that all outstanding property
rates on Government properties should be written off.
iii. The creation of new Districts and Municipalities in some areas has
curved out the productive areas away from the parent districts leaving
the later almost unviable. This can be cited in the case of Masaka
District that has been left with a shell of its old self, only able to collect
150,000,000 in Local Revenue in a Financial Year. In areas where
municipalities have been created the structural linkages are problematic.
The Municipalities are under the Districts but operate in an autonomous
manner and in most cases collect much more revenue than the district.
iv. The committee established that District and Municipality officials were
reluctant to collect taxes from some enterprises that would otherwise be
required to pay large amounts of taxes. The committee for example was
informed that it was a security risk to access modern farms in the
districts of Kiruhura, Ssembabule and Lyantonde. Other modern farms
in Mbarara, Gomba, Kiryandongo, Nwoya, Kyankwazi, Kanungu,
Rukungiri, Ntungamo, Mukono, Kabarole, Kayunga among others also
do not pay local taxes. Municipalities like Ishaka-Bushenyi, Jinja, Mbale,
Fort Portal, Mbarara, Lira, Hoima, Iganga and others are under collecting
and under declaring Local Revenue.
v. The Committee was informed that all revenues collected by the district
on behalf of the Center including Pay As You Earn (PAYE) and With
Holding Tax (WHT) are all passed over to URA leaving the districts with
very few revenue sources mainly market dues to support service delivery
by the district councils.
vi. The Committee also observed that districts like Moroto, Namayingo,
Kabale, Isingiro and Buhweju that would otherwise benefit from
Royalties from minerals were not paid due to incapacity by the line

24
Ministry of Energy and Mineral Development to know the type and
quantity of minerals being mined either out of deliberate negligence or
outright corruption.

vii. Local Service Tax being limited to staff on the Government payroll yet the
law provides in Section 80 (1a) (b) of the Local Governments Act,
Amendment No.2, 2008 that local service tax to be levied on all persons
in gainful employment or who are practicing any profession. In some
districts even among the Government employees, not all the eligible staff
were taxed in the year under review.
viii. Wrangles in areas that constitute large revenue sources for the districts
and municipalities like markets and parks for taxis and buses. These
can be cited in the bus park wrangles in Bushenyi-Ishaka Municipality
and the markets in Mbarara, Mbale and Fort Portal among others.
ix. Laxity in the Office of Accounting Officers to ensure that all revenue
budgeted for is collected and many do not even keep Revenue Registers
x. Underestimation of revenue because properties have not been valued
and some revenue sources have not been explored.
xi. Under declaration of collected revenue like rental charges, market dues,
Taxi Parks.

Observations
The Committee observes that:
i. Under-collection of revenue in the districts and municipalities affects
service delivery.
ii. Local Government Councilors depend on Local Revenue to be able to
conduct business. Being the decision makers in the district, failure to
conduct council business puts district or municipality in disrepute.
iii. The MFP&ED does not have the mandate to write off debts that Uganda
Land Commission and other government agencies owe the Local
Governments without compensation.

25
Recommendations
The Committee recommends that:
i. All districts and municipalities should expand their revenue bases and
tax all eligible areas;
ii. District and Municipal Councils should undertake regular tax
assessment to be able to collect the rightful taxes due to the Councils
iii. Put in place a proper enforcement unit.
iv. Uncollected Local Service Tax as reported in the year under review
should be recovered.
v. The Ministry of Finance should compensate the Local Governments
amounts equivalent to what the Uganda Land Commission owes them.
vi. The Ministry of Energy and Minerals Development should share
information on all licensed mines and make sure they share Royalties as
per the law.
vii. The Auditor General should conduct a special audit on Local Revenue
collection in Local Governments focusing on management, transparency,
capacity and compliance.

11. NON COMPLIANCE WITH STATUTORY OBLIGATIONS


Non-deduction and remittance of pay as you earn tax (PAYE), and
Withholding Tax.
Section 5.6.6 (2) of the Local Governments Finance and Accounting Manual,
2007 requires Pay as You Earn tax to be deducted from salaries and
allowances paid and remitted to Uganda Revenue Authority. Section 20, (1) of
the Income Tax Act 1997 as amended defines employment income to include
gratuity and allowances.
Section 119 (1) of the Income Tax Act 1997 as amended requires that where a
Government Institution pays a supplier an amount exceeding UGX.1,000,000
for the supply of goods and services, the payer should withhold 6% of the
amount paid.

26
Audit reported a number of instances where such taxes were not remitted to
Uganda Revenue Authority amounting to UGX. 79,276,908.

Observations
The committee notes that:
i. Non-compliance with the tax law may attract fines and penalties.
ii. It is negligent of accounting officers not to remit tax after the deduction.
iii. Non remittance of the taxes was noted to be an act of diversion of funds
by the districts and has led to non-delivery of services in the districts as
the district accounts were frozen by URA for example Kamuli and Iganga
District Local Government among others.
iv. The practice is a result of weakness in Internal Audit units in the
districts which would have otherwise detected flaws in the systems.

Recommendations
The committee recommends that:
i. Accounting officers should remit the tax deductions promptly on a
monthly basis.
ii. The accounting officers should be held liable for non-deduction and
remittance of taxes.
iii. URA should routinely interact with the tax entities for regular updates
on their obligations.

12. NON-COMPLIANCE WITH THE PROCUREMENT LAWS


The Auditor Generals Report in the year under review cited a number of
breaches in the procurement laws in the Local Governments. For example
Mbarara Municipality where an award for the management of the taxi park
that was recommended for a one year award by the Solicitor General was
awarded five years at a fixed rate; and Busia district where the procurement
officer deviated from the normal procurement procedures for personal gain.

Also variously cited in the Auditor Generals Report is the numerous cases of

27
non-disposal of local Government Assets for example the many grounded
vehicles in the Health Sector.

Observations
The Committee observes that noncompliance with the PPDA regulations
compromises value for money and fairness. It also gives way to conflict of
interest.

The Committee upholds the Auditor Generals recommendations on all matters


of procurement.

13. FIXED ASSETS REGISTER


Paragraph 2.3.1.4(2) of the Local Governments Financial and Accounting
Manual (LGFAM), 2007 requires the maintenance of a fixed assets register that
contains information such as detailed description of the asset, invoice
reference, historical cost of acquisition, date of acquisition, name of supplier,
warranty details, estimated life and estimated date of retirement and
maintenance records.

However the Auditor General reported non- compliance with the regulations in
a number of Local Governments.

Observations
In some districts it was observed that some asset register books were
maintained but contained entries which were not tallying with the property in
the district.

In the absence of the full details about fixed assets registers, the verification of
the items was rendered difficult. This could lead to misuse or theft of the Local
Government Assets without accountability.

Recommendation
The Committee recommends that all local governments should ensure that

28
they keep an up to date Assets Register.

14. LACK OF VEHICLE MOVEMENT LOGBOOKS


Section 2.3.1.4(1) of the Local Governments Financial and Accounting Manual,
2007 states that asset log books especially for vehicles, tractors, among others
should be maintained to identify exactly what activities have been performed
and at what date and time.

Audit reported a number of Local Governments where no vehicle log books


were maintained. In the absence of the vehicle movement register, controls
over vehicle movement and fuel consumption are weak.

Observation
The Committee notes that Accounting Officers must control all Government
resources and assets in the district. The absence of vehicle logbooks is an
indication of negligence on the part of the Accounting Officer.

Recommendation
Accounting Officers should ensure that they maintain vehicle movement log
books for all motor vehicle managed by them, failure of which administrative
sanctions should be evoked on them.

15. OUTSTANDING COMMITMENTS


Regulation 11 (1) of the Local Government Financial & Accounting Regulations,
2007 provides that the head of finance shall ensure that commitments should
not be approved unless there is sufficient balance available in the relevant
budget item.

The Audit report indicated outstanding commitments in the local governments.


The Committee is concerned that committing Government when there is no
money leads to the building of domestic arrears. Secondly delays to settle
outstanding commitments may lead to litigation and costs.

29
Observation
The committee observed that there were clear sanctions in place for the
violation of the commitment control by Accounting Officers; however the PS/ST
had not evoked them.

Recommendations
The Committee recommends that all the commitments should receive first call
on the budget and in future if the same happens the Accounting Officer will be
held liable and punished for the act.

16. RECEIVABLES
Section 2.3.2.3 of Local Governments Financial and Accounting Manual 2007,
requires Council to minimize debtors by following up the collection of debts in
a timely, systematic and vigorous manner. Outstanding debtors represent an
idle asset which hinders implementation of district activities.

Observations
i. The committee observed that in a number of districts there is laxity in the
collection of debts. The enforcement units are not asserting themselves
resulting into debtors ignoring their obligations to the local governments.
ii. In some instances the debts have stayed in the local government records for
so long that they have become uncollectable either arising from death or
otherwise.

Recommendations
i. The local Governments should strengthen their enforcement units and
ensure that all legally acceptable options are explored to ensure that the
debts are collected.
ii. In instances where the debtor is dead, the debt should be written off.

30
17. LACK OF FINANCIAL STATEMENTS IN HEALTH CENTERS AND UPE
SCHOOLS.
Regulation 62(4 & 5) of the Local Governments Financial and Accounting
Regulations, 2007 states that the officer in charge of a Health Unit shall
submit monthly financial statements to the sub-county and where the health
unit is unable to prepare the financial statements, assistance shall be sought
from the sub-accountant of the sub county and copies of the financial
statements to be copied to the District Chief Executive.

Section 64(4) of Local Government Financial and Accounting Regulation 2007


requires primary school head teachers to keep proper cash books in respect of
all money received and expended by the schools.

The Audit report noted a contravention of both sections 62 (4 &5) and Section
64 (4) in a number of Local Governments.

Observation
The Committee noted that in both instances the sub accountants from the
sub-counties did not supervise the preparation and production of the financial
statements and cashbooks. Failure to produce them is a failure of the sub-
accountant and in turn the Accounting Officer because he/she is supposed to
receive a periodic report.

Recommendation
The Committee recommends that:
i. The districts should make deliberate efforts to train the health center in-
charges and the school Head Teachers to learn how to prepare the
financial documents required of them.
ii. The Sub-County Sub Accountants should closely supervise the in-
charges of the Health Centers and the Head Teacher in the production of
the financial documents.

31
18. UNACCOUNTED FOR FUNDS
The auditor general noted there were three types of unaccounted funds;
i. Incompletely vouched expenditure
ii. Missing vouchers
iii. Administrative advances not accounted for by the officers

Incompletely vouched expenditure paragraph 5.4.6 (1) of the LGFAM 2007,


requires that before any voucher is passed for payment the head of finance
shall ensure that the voucher and any supporting documents invoices or
master- rolls are correct in all relevant particulars. The report indicated that
payment vouchers of operations accounts totaling UGX 739,777,406 lacked
supporting documents.

Administrative advances, regulation 42, 43 (2) of LGFAR 2007, requires funds


to be properly vouched and accounted for within a period of one month. Audit
noted the administrative advances amounting to UGX 1,497,747,148 advanced
to various officers remained unaccounted for at the time of audit, in the
absence of accountability documents it was difficult to ascertain whether of
funds were put to the intended purpose and besides, delay to present
accountabilities can lead to falsification of documents.

Missing vouchers Regulation 42 of LGFA 2007 provides that all disbursement


of public funds shall be properly vouched on payment voucher prescribed in
accounting manuals, audit observed that expenditure amounting to UGX
304,284,165 and was not supported by expenditure voucher and attendant
documentations consequently the Auditor General could not confirm the
purpose for which the funds were spent.

Observation
The Committee observes that in instances where the accountabilities were
either not submitted or were not satisfactory, the funds should be recovered.

32
Recommendation
The Committee recommends a refund of UGX 666,946,574.

19. INFORMAL ASSOCIATIONS OF APPOINTED LOCAL GOVERNMENT


OFFICIALS OF THE SAME CADRE.
The Committee has noted that there are Associations of different cadres
of District officials like Association of Chief Administrative Officers,
Associations of Chief Finance Officers, Association of Internal Auditors,
Association of District Education Officers and Association of District
Planners. The Associations draw funds from the Local Government
budgets to facilitate their members to attend meetings and yet they are
not in the Public Service Structures.

Observations
The Committee observes that:
i. There is evidence of discussing Government business in the
Associations. This can be cited in the fact that some responses on
the Auditor Generals Reports are identical.

ii. The Associations may be a conduit of corruption especially in the


area of procurement where companies are exchanged across the
country. An example is the case in Awach Health Center in Gulu
District where Omatala Womens Group from Palisa constructed an
Operation Theatre.

The case of District Education Officers can also be re-emphasised


where they divert UPE funds to private Association Accounts.

iii. Instead of doing Government work members of the Associations


attend Association workshops during official working days thus
paralyzing Government work.

33
iv. The practice of spending Government resources to facilitate private
Associations is irregular and must stop. The PS/ST reiterated this
position. The Permanent Secretary, Ministry of Public Service and
the Permanent Secretary, Ministry of Local Government also
agreed.

v. The Committee noted that the PS Ministry of Local Government


has on occasion attended the meetings of the Association of CAOs.

vi. If the Associations are to exist for some positive reasons, then the
Ministry of Public Service should draw up guidelines for them

Recommendations
The Committee recommends that:
i. The Associations be disbanded forthwith;
ii. All allowances paid to local government funds to attend the
Associations should be recovered;
iii. The role of the Ministry of Local Government in condoning the
activities of the Association well knowing they broke some
established rules should be investigated.

20. THE RELATIONSHIP BETWEEN THE OFFICE OF THE AUDITOR


GENERAL (OAG), THE POLICE (CIID), INSPECTORATE OF
GOVERNMENT, THE DIRECTORATE OF PUBLIC PROSECUTIONS
(DPP)AND THE PUBLIC PROCUREMENT AND DISPOSAL OF PUBLIC
ASSETS AUTHORITY (PPDA).
The Committee noted that all these are institutions of Government which
are charged with enforcing accountability in Uganda.

They are all semi-autonomous institutions which are independent and


are not expected to take instructions from one another, however they are
all empowered to carry out investigations into issues of Accountability,

34
save for the DPP who is empowered to direct the Police to carry out
investigations on its behalf and report the findings.

Observations

i. All these institutions carry out the role of investigations withregard


to the use of public funds and are as such accountability
institutions;
ii. They are all empowered to initiate investigations at their own
initiative and can require the production of documents, books or
any materials that is related to the use of public funds;
iii. There is no clear coordination within the operation of these bodies
and as such their operations are usually not harmonised;
iv. They may in the cause of carrying out their respective mandates
either knowingly or unknowingly negatively affect the operations of
one another;
v. None of these institutions is legally known to be final in the
performance of their duties and any of them may initiate fresh
inquiries at any one time, regardless of whether the other organ
has done its part.

Recommendations

Parliament should harmonise the laws establishing these various


agencies of government with a view to synchronise their operations so as
to execute the common goal of ensuring accountability of public funds.

21. THE MANDATE AND OPERATIONS OF DISTRICT PUBLIC


ACCOUNTS COMMITTEES:
The constitution of the Republic of Uganda prescribes powers for
Parliament to legislate with regard to accountability in the local
governments as seen in Article 196 which empowers Parliament to make

35
laws prescribing financial control and accountability measures for
compliance by all Local Governments and imposing regular audit
requirements and procedures for Local Governments.

Parliament in compliance with the foregoing Constitutional mandate


enacted the Local Governments Act, Cap 243 of the laws of Uganda to
provide for accountability by the Local Government authorities in the
following terms:

Section 87(1) (a) and (e) require the Auditor General to give the report of
the audited accounts of every Local Government Authority to Parliament
and to the Local Government Public Accounts Committee.

On receiving the audit report in the foregoing provision, Parliament is


required merely to take note of the observations of the Auditor General,
who is technically an officer of Parliament and is not required to consider
the said report as this is explained section 88 of the same Act which
establishes the Local Government Public Accounts Committee and
empowers it to functioning the following terms:

Section 88(7) and (8) provide that a local government public accounts
committee (DPAC) shall examine the reports of the Auditor General, Chief
Internal Auditor and any reports of commissions of inquiry and shall
submit its report to the council and to the Minister responsible for Local
Governments who shall lay the report before Parliament.

The Act goes ahead to empower the DPAC to recommend to Police, arrest
suspects in respect of cases involving corruption or abuse of authority of
a Public Officer.

Rule 170 (1) and (3) of the Rules of Procedure of Parliament establishes
LGAC and assigns it the function of examining the audited accounts in

36
relation to the report laid before Parliament and in relation to the DPAC
report.

Observations

The Committee observes that:

i. The DPAC is mandated to examine the reports of the Auditor


General and is empowered in so doing, to secure the attendance of
any councilor or officer to explain matters arising from the Auditor
Generals reports.

ii. The role of LGAC in the accountability process of Local


Government authorities is reserved where the Minister responsible
for Local Governments is required to receive the report of the Local
Government Public Accounts Committee and lay it before
Parliament as required by Section 88(8) of the Act.

iii. The mandate of LGAC in accountability is restricted to considering


the Auditor Generals reports in relation to the DPAC reports laid
before Parliament by the Minister.

iv. Given the powers given to the DPAC in the consideration of the
Auditor Generals report, and that of LGAC, there is a likelihood of
a possibility of double jeopardy against persons who may be
affected by the findings of both Committees.

v. In considering the Auditor Generals report on any local


Government Authority without the DPAC reports, LGAC is either
duplicating or high jacking the accountability process in violation
of both section 88 of the Local Governments Act and Rule 170 of
the Rules of Procedure of Parliament.

37
vi. The Minister of Local Government has not for all this time laid any
report of the DPAC to Parliament as required by section 87 of the
Local Governments Act, since the enactment of that Act.

vii. Considering the number of accounting entities in the Local


Government LGAC would be greatly overwhelmed and not able to
consider all their audit reports, considering the timeline of six
months set by article 163(5) of the Constitution.

Recommendations

The Committee recommends that:

i. The Local Governments Act should be amended to permit LGAC to


consider the reports of the Auditor General without necessarily
considering it with the DPAC report.

ii. The DPAC should be adequately empowered in terms technical and


logistical support to enable it execute the mandate spelt out in the
Local Government Act.

iii. The Local Governments Act should be amended to mandate the


DPAC to consider only the audit reports of town councils, sub
counties and Secondary Schools and not of the districts,
municipalities and district hospitals.

iv. Parliament should consider establishing another accountability


Committee and assign it to consider only government projects at
all levels of Government.

In the appendices is a summary of some of the cases referred to CIID for


further investigation.

38
PART 2
SPECIFIC ENTITIES

A. DISTRICT LOCAL GOVERNMENTS

1. ADJUMANI DISTRICT

Query 5.1 Delayed Completion of Civil Works


Contracts amounting to UGX. 154,257,282 were awarded for Construction of
Aliwara Primary School (UGX. 103,911,032) and a market (UGX. 50, 346,250).
By the time of audit, a sum of UGX. 84,024,377 had been paid however, the
civil works had not been completed and the contract period had expired.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.2 Under Payment of Hard to Reach Allowances


Audit review of May 2015 payroll revealed that hard to reach allowance for 42
employees of the district was under paid by UGX. 23,493,396.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.3 Direct Procurement of Stationary

The District prequalification list for supply of stationary has 3 firms. However a
review of procurements of stationary for Adjumani Hospital worth UGX.
10,609,950 revealed that stationary was directly procured from one supplier
Ms. Grand Hope Enterprises without competition.

Audit observes that this is irregular and contravenes the Procurement

39
Regulations.

Observations
i. The Accounting Officer failed to provide sufficient explanation.
ii. Direct procurement under unclear circumstances is attributable to
corrupt tendencies

Recommendations
i. The Committee recommends that the Auditor Generals advice requiring
the District to adhere to the Procurement laws be upheld.
ii. That the Accounting Officer is reprimanded for violating the procurement
laws.

2. ARUA DISTRICT

Query 5.1 Over Payment of Salary


Payroll analysis carried out by the Auditor General revealed that 223 members
of staff who were supposed to earn salaries amounting to UGX.66,852,200
according to their scales were instead paid UGX.94,459,269 resulting into a
salary overpayment of UGX.27,607,069.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.2 Understaffing


The District has an approved structure of 537 staff. It was however, observed
that, out of 537 approved posts, 263 posts were filled leaving 274 posts vacant
representing 51% of approved structure.

For observations and recommendations refer to crosscutting issue paragraph 4.0


of this report.

40
Query 5.3 Management of Information and Communications Technology
It was observed that the district did not designate an officer to be in charge of
ICT management nor had an ICT policy been developed to guide the use of IT
equipment and the software.

For observations and recommendations refer to crosscutting issue paragraph 7


of this report.

3. KOBOKO DISTRICT

Query 5.1Procurement

Query 5.1.1: Direct Procurement under UNHCR Funding

Audit Reported direct Procurement in Koboko District amounting to USD


14,103.

The Committee was informed that:


i. The funds were from UNHCR after a tour of a refugee camp following the
influx of Congolese refugees and finding that the camp had no sanitary
facilities.
ii. The funds were given to the district in Uganda shillings and not dollars
as reported by the Auditors.
iii. The procurement was treated as an emergency and there was no time to
go through any other procurement process other than direct
procurement. The contract was given to a contractor who was already
doing some work in the camps.

Observations
i. There was in place a Memorandum of Understanding between the
District and UNHCR which had a project Partnership procurement
provision, but the district contravened it.

41
ii. The Accounting Officer admitted the anomaly and took the responsibility
for deviating from the procurement guidelines.

Recommendation
The Committee recommends that the Accounting Officer be cautioned.

Query 5.1.2: Failure to witness bid opening and closing by the contracts
Committee
Audit reported that opening and closing of bids for procurements worth UGX.
939,110,472 were not witnessed by a member of the contracts committee and
the forms were not signed by any member of the Procurement and Disposal
Unit (PDU).

Observations
The Committee observes that there was negligence on the part of the
procurement officer.

Recommendation
The Committee recommends that the procurement officer be cautioned for
violating the procurement procedures.

Query 5.1.3: Irregular Award of Contracts

Audit reported an irregular award of contracts where the lowest bidder quoting
UGX. 82,205,000 was not awarded the tender but instead it was awarded to
the runner up who quoted UGX. 83,368,000.

The Committee was informed that the problem arose from a lack of capacity of
the Procurement Officer. The Accounting Officer said the Procurement Officer
was cautioned and an investigation into the matter instituted. He highlighted
the conclusion of the investigation that confirmed that the contract was

42
awarded to the wrong contractor.

Observation
The Committee observed that the procurement regulations were flaunted

Recommendation
i. The procurement officer should always adhere to procurement
procedures.
ii. The Accounting Officer should write a warning letter to the procurement
officer who has continued to error.

Query 5.1.4: Failure to sign the Evaluation Reports

Audit reported that members of the Evaluation Committee did not sign
evaluation reports for five (5) procurements totaling to UGX. 374,435,870.

Observations
The Committee observed that:
i. The Procurement officer overrode controls in the procurement process.
ii. Laxity in procurement is a potential cause of litigation against the
district.

Recommendation
The Committee recommends that the Accounting Officer withdraws the acting
instructions from the current acting Procurement officer for the laxity,
irresponsibility, incompetence.

Query 5.5: Under Staffing


The district has an approved structure of 82 staff. However out of the 82
approved posts, only 31 posts are filled leaving 51 posts vacant representing
62% of approved structure.

43
For observations and recommendations refer to crosscutting issue paragraph 4
of this report.

Query 5.6 Lack of Information Technology (IT) Policy

The Auditor General reported that Koboko District did not have an IT Policy.

For observations and recommendations refer to crosscutting issue paragraph 7


of this report.

Query 5.7: Service Delivery

Query 5.7.1: Construction of Bathing Shelters


The contract for construction of the bathing shelters at Dricile, Ayipe and
Dranya Health Centers was awarded to M/s. Abude Construction Company
Limited at a contract sum of UGX 24,000,000. Audit inspection carried out on
the 8th July 2015, revealed that the contractor had been fully paid for the work
executed. However the floor of the two bathing shelters at Dricile and Ayipe
Health Centers were poorly done.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.8: Un-validated Staff on Payroll


A validation exercise was conducted by Ernst and Young Certified Public
Accountants on behalf of the Auditor General which found additional
personnel on the district payroll during the payroll biometric validation. It also
highlighted that 10 staff had missed the validation exercise.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

44
4. MARACHA DISTRICT

Query 5.1: Over Payment of Salary


Payroll analysis carried out revealed that 221 members of staff who were
supposed to earn UGX.78,267,733 according to their scales were instead paid
UGX.90,124,322 resulting into a salary overpayment of UGX.11,856,589.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.2: Unaccounted for CDD Funds


Audit observed that a total of UGX.11, 810,000 disbursed to groups under the
CDD Program were not accounted for.

The Accounting Officer explained that out of UGX.11, 810,000 disbursed,


UGX.1, 100,000 had been recovered leaving a balance of UGX.10, 710,000.

The Committee was informed that: -

i. Two Officers namely Mr. Dricile and a Mr. Wadia diverted funds to other
uses and funds are being recovered from them.
ii. The matter was handled by the IGG and some funds recovered but they
were not remitted to the entity.

Observations
The Committee observed that there was no evidence that the IGG remitted
funds back to the Consolidated Fund.

Recommendations
i. the Committee recommends that the Accounting Officer continues
recovering funds from Mr. John Dricile until such a time when full

45
recovery of the funds is realized;
ii. The Committee recommends that the Accounting Officer advises Council
to re-appropriate recovered funds to finance the intended purpose.

Query 5.3: Understaffing


The district has an approved structure of 1,829 staff. However, out of the
approved structure of 1,829 posts only 1,381 post were filled leaving 452 (25%)
vacant positions

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.4.1: Construction of two classroom block at Alikua Islamic


Primary School.
A local contractor was engaged in 2013/14 to construct a 2 classroom
block at Alikua Islamic Primary School at a contract sum of UGX.45,
087,100 using PRDP funds.

At the time of audit UGX.32,976,400 representing 73% of the contract price


had been paid to the contractor. However, physical inspection of the site July
2015 revealed that the contractor had roofed the building, fixed the windows
and doors burglar frames but abandoned the site before plastering.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.4.2: Construction of pit Latrines at Wadra and Curabe HC IIs.


The district contracted a local firm in the Financial Year 2012/13 to
construct 2 pit latrines at Wadra HC II and Curube HC II at a contract
sum of UGX.13, 998,480 under PRDP/PHC funds.

46
It was observed that UGX.4,626,040 was paid to the contractor. However,
physical inspection of the sites revealed that the contractor abandoned the
works at walling.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

5. MOYO DISTRICT

Query 5.1: Un-Vouched Expenditure

Audit observed that vouchers for expenditure amounting to UGX.45, 815,000


were not availed for audit.

The Accounting Officer explained that the four expenditure vouchers


amounting to UGX.45,815,000 under works department were under
investigation by the Inspector General of Government (IGG) and so the District
is not in possession of the Vouchers in question.

He submitted evidence in acknowledgment names and signatures of the


officers from the Inspectorate who received the receipts.

Observations
The Committee observed that:
i. The vouchers were with the Inspectorate of Government at the time of
audit but were later returned and they were given to the Auditors on 5th
December 2015.
ii. The Auditor General cleared the vouchers but they await findings from
the IGG before they can drop the query.
iii. As the Auditor General had cleared the receipts then the financial
accountability cleared the query.

47
Recommendation
The Committee recommends that query be dropped.

Query 5.2: Unaccounted for Administrative Advances


An amount of UGX.25,044,000 in respect of administrative advances remained
unaccounted for at the time of audit.

The Accounting Officer informed the Committee that at the time of audit
Vouchers were presented to the auditors but the accountability was not yet
ready because work was still ongoing under Force Account. The Funds are now
accounted for and evidence of accountability was submitted to the Committee.

The Committee was informed that.


i. The District hired equipment to do the work but paid the drivers of the
equipment. He then said the drivers were Government employees
borrowed from another district.
ii. The Funds were disbursed to the responsible officer for onward
transmission to the people who did the actual work.

Observations
The Committee observed that:
i. The explanation is not satisfactory because Audit was done in June
2015.
ii. It is not the responsibility of the District to pay drivers of hired
equipment, and if the drivers were Government staff then they should
not have been paid more than what the standing orders provide for.
iii. There might have been double payment.
iv. There was variation in the rate paid for Safari Day Allowance for the
same individual.
v. The Engineer failed to account for the 25 million shillings.

48
Recommendations
i. The Committee recommends that the Accounting Officer recovers the
money from the District Engineer.
ii. The matter be investigated further with a view to establishing if there
was fraud among the district engineer and the Chief Finance Officer.

Query 5.3: Irregular Levy of 2% Contract Fees


UGX 11,712,603 was levied as contract fees and loan application fees at rate of
2% and UGX 10,000 per loan application respectively. However the revenue
source was not approved by the Minister. The collection was attributed to the
desire to raise more local revenue by the Council.

For observations and recommendations refer to crosscutting issue paragraph 8


of this report.

Query 5.4 Service Delivery

Query 5.4.1 Periodic road maintenance of Laropi- Palorinya (15 Km) Road.

Out of the estimated cost UGX.86,347,000 for periodic maintenance of Laropi-


Palorinya road, UGX 84, 011,075 had been spent by the time of audit. However
physical inspection of the road revealed that, whereas 56 pieces of culverts
(600 mm) were to be installed as per the strip map only 12 pieces of culverts
had been installed leaving 44 culverts dumped at various locations.
The Accounting Officer explained that there was a delay in installing the
culverts due to a breakdown of the wheel loader and dump truck.

The Committee was informed that work was completed and the Contractor was
given a payment certificate.

Observations
The Committee was concerned that:

49
i. the Engineer made a submission for payment to the Accounting Officer
yet he knew that the bulk of the work was undone.
ii. The fact that the works were extended over two financial years means
the citizens were denied service.
iii. The Committee was suspicious with the motive the Engineer who had
initially misled the Committee when he informed the committee that the
works were done under the Road Fund, but later changed that it was
funded under the PRDP.

Recommendation
The Committee recommends that the Accounting Officer reprimands the
Engineer in accordance with the Government regulations for improper
conduct.

Query 5.5.2: Construction of Out of Patient Department at Malanga HC


11.
Construction of Out of Patient Department was awarded to Ms. Quks
Enterprise at UGX 99,750,000 under PRDP. The contract commenced on 28th
January 2015 and was supposed to be completed on 15th May 2015. At the
time of inspection, the contractor had been paid UGX 88,153,414 representing
88%. However, the works were still incomplete.

The Committee was informed that the work is completed and the facility is now
occupied.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

6. NEBBI DISTRICT LOCAL GOVERNMENT

Query 5.1: Local Revenue Shortfall


Out of the budgeted Local Revenue collection of UGX. 365,254,869, only UGX.

50
288,323,699 was collected leading to uncollected revenue of UGX76,931,170
representing 21% of the budgeted Local Revenue.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.2 Misappropriation of Projects Funds

Audit observed that a total of UGX.7,617,700 meant for support of


tuberculosis supervision in the district was misappropriated by the focal
person for HIV project under Baylor. By the time of audit, no recovery had
been made as the officer was allegedly on the run.
Misappropriation of funds may discourage future donor funding.

The Accounting Officer explained that the district has agreed to make a refund
to the program while the matter continues to be pursued.
The Committee was informed that:
i. The funds were misappropriated bya oneMr. Mario Drasiku Origa.
ii. The district refunded the money to Baylor.

Observations
The Committee observes that the Accounting Officer did not do all that is in his
means to recover the funds from the concerned officials.

Recommendations
i. The Committee recommends that the Accounting Officer recovers the
UGX.7,617,700 from the District Health Officer within 2 months.
ii. Legal action should be initiated against the officers concerned.

Query 5.3 Unaccounted for Advances


Audit observed that a total of UGX. 11,873,000 advanced to district employees

51
to carry out official activities remained unaccounted for at the time of audit.

The Accounting Officer explained that the funds that remained unaccounted
for relate to on-going activities in the works and production departments.

The Committee was informed that the outstanding advances were overstated
by UGX.1 Million as the actual figure is Shs.10,873,000.

The Accounting Officer submitted accountability documents to the Committee.

Observations
The Committee observed that:
i. The funds were accounted for much later after audit which was contrary
to the Regulations.
ii. Only accountability worth UGX. 2,869,000 being advance to Grace Alum
(UGX. 520,000) and Kermu Stephen (UGX. 2,349,000) and was
acknowledged by the Committee.

Recommendations

The Committee recommends that the Accounting Officer recovers the UGX
9,004,000 that remained un-accounted for, immediately.

Query 5.4: Understaffing


The District has an approved establishment structure of 206 employees. It
was however, observed that out of 206 established posts, only 106 are filled
leaving a staffing gap of 100 posts representing (49%) of approved staff
structure.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

52
7. YUMBE DISTRICT LOCAL GOVERNMENT

Query 5.1: Unspent Balances not Returned to the Consolidated Fund


Audit observed that the NAADS account had unspent funds totaling UGX
2,021,502 that had not been returned to treasury by the time of audit

For observations and recommendations refer to crosscutting issue paragraph 9


of this report.

Query 5.2: Under Collection of Local Revenue


The Auditor General reported that the District has an approved budget of UGX
210,441,000 but collected UGX 107,130,883 leaving a shortfall of UGX.
103,310,117.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.3: Over Payment of Salary

The Auditor General reported a salary over payment of amounting to UGX.


985,496.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.4: Failure to Dispose off Assets


Regulation 122(6) of the LG PPDA, 2006 requires the Accounting Officer to
ensure that the assets of a Council are reviewed on an annual basis, to identify
those which are obsolete and should be subject to disposal; furthermore the
Accounting Officer should appoint a Board of Survey to verify the assets of the
Council to be boarded off. In addition, Section 2.3.4.1 of LGFAM, 2007 states
that when stores and fixed assets have become redundant, obsolete or

53
unserviceable through normal wear and tear, they shall be written off
accordingly. A board of surveys should be convened to examine and
recommend their boarding off.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.5: Lack of ICT Policy

The Auditor General reported lack of an ICT policy.

For observations and recommendations refer to crosscutting issue paragraph 7


of this report.

Query 5.6: Service Delivery

Query 5.6.1: Delayed Completion of Contracts


Audit reported that three contracts totaling UGX. 430,233,040 had not been
completed by the time of audit and there was no evidence to show that the
Accounting Officer has taken any steps to compel the contractors to finish the
works.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

8. ZOMBO DISTRICT

Query 5.1: Grants Released but not Credited to the District General Fund
Account.
A reconciliation of Cash Release/Treasury Credit Advices slip from Ministry of
Finance, Planning and Economic Development against the District General
Fund Account revealed that UGX. 200,363,048 purportedly released to the
district was not credited on the district General Fund Account.

54
The Accounting Officer explained that the matter was noted during
reconciliation of the releases from the treasury and clarification was sought
from the Permanent Secretary/Secretary to the Treasury on the two credit
advices by the district. However, no response was provided and the money had
not been received on the district account by end of year.

In the circumstance, there is a risk that the funds could have been diverted.

The Committee was informed that the funds were released but they did not get
to the account of Zombo District. The same happened the previous year as
well.

On another occasion the Account of Zombo District was credited with UGX. 89
million, which money was not meant for the District and it had to be returned.

The Accounting Officer wrote to the Ministry of Finance, Planning and


Economic Development on the matter.

Observation
The Committee observed that the Accounting Officer should have copied his
letter to the Auditor General, Permanent Secretary Ministry of Local
Government and the Local Government Accounts Committee of Parliament.

Recommendation
The Committee directed the Accounting Officer to follow up on the matter and
report back to the Committee by 30th November 2016.

When a response is obtained, the same should be communicated to the


Auditor General.

Query 5.2: Nugatory Expenditure


Audit observed that, the district did not remit taxes amounting to

55
UGX.103,983,283 to Uganda Revenue Authority. Consequently, Uganda
Revenue Authority penalized Council to the tune of UGX 164,770,101 out of
which UGX.44,163,857 was in respect of penalty and UGX.16,622,962
interest.

The Accounting Officer pledged to ensure compliance with the requirements of


the Income Tax Act to avoid payment of penalties and fines in future.

Observations
The Committee observes that penalty arose from negligence by the Accounting
Officer.

Recommendation
The Committee recommends that the Accounting Officer refunds the UGX
60,000,000 paid out due to the penalty and interest on the noncompliance
with tax laws.

Query 5.3: Abandoned NUSAF Projects

Audit inspection carried out on the 4th of August 2015 revealed that seven of
the projects taken over had not been completed.

The Accounting Officer explained that the contractors moved to other sites
prior to completing their contracts and later had cash flow shortages but added
that memoranda of Understandings (MOUs) were signed between the IGG, the
District and the contractor guarantying completion of the works. However the
process has been slow and it was observed that inferior materials had been
used on majority of the sites.

The Committee was informed that some of the projects were completed in 2015
at their original costs while others resulted in additional costs which
cumulatively amount to UGX. 48,162,000.

56
Observations
The Committee observed that delayed works denies services to the people.

Recommendations
The Committee recommends that:
i. The Works supervisor was held responsible for the delayed works.
ii. The committee recommends that officer the Works Supervisor (Mr.
Charles Muswa) be interdicted and full investigation be carried out into
the work in these projects.

Query 5.4: Unaccounted for funds


Regulation 43 (2) of the Local Government Financial and Accounting
Regulations 2007, requires funds to be properly vouched and accounted for
within a period of a month.

However, an amount of UGX 12,894,750remained unaccounted for.

Delayed accountabilities may lead to falsification of documents.

The Accounting Officer presented accountabilities.

Observations
The Committee did not receive accountabilities for Unegiu Samuel Obeling;
Ongiera Sam Ajoga, Amandu Ofoyuru Tom, Aneniwu (weeding), Olum Lamber,
Ocunga, Opaki, Ocaki and Openjuru.

Recommendations
The Committee recommends that the Accounting Officer recovers the UGX.
8,852,000 being unaccounted for funds from the staff herein above mentioned.

Query 5.5: Unspent Balances not returned to the Consolidated Fund


UGX 89,456,000 remained unutilized at the end of the year and had not been

57
returned to the Consolidated Fund at the time of audit contrary to the
regulations.

Query 5.6: Delayed completion of Road Works

The district signed a contract agreement with M/s. Six Way General
Engineering on the 21st of May 2013 for opening and rehabilitation of Palwo
P/S - Agingo Chapel road at a contract sum of UGX. 185,410,540. The works
were to be completed within (2 months) effective 21st May 2013 to 22nd August
2013.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.7: Service Delivery

Query 5.7.1: Rehabilitation of Gira-Alicudu and Pakadha-Awasi Roads


Audit observed that contract for the rehabilitation of Gira-Alicudu, Pakadha-
Awasi road was awarded to Link Investments limited at a contract sum of UGX
151,782,750. The contract was effective from 25th February 2015 to 25th May
2015.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.7.2 Non-operational Health Centre


The Committee reviewed records on Mudhel HC III and an audit inspection
carried which revealed that although the contractor was fully paid upon
completion of the work, there were shortcomings.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

58
Query 5.9: Un-validated Staff Payroll

Audit conducted a validation exercise where Ernst and Young Certified Public
Accountants were appointed to do the work on the Auditor Generals behalf.
Audit observed that the 118 staff had missed the payroll validation exercise.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.10 Lack of an Information Technology (IT) Policy

Management lacked an IT Policy.

For observations and recommendations refer to crosscutting issue paragraph 7


of this report.

9. MASAKA DISTRICT
Query 5.1: Overpayment of Salaries

A review of the payroll revealed that the district overpaid salaries worth
UGX.6,701,833 to various officers.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.2 Funds unaccounted for


It was observed that funds totaling to UGX.19,969,080 lacked accountability.
In the absence of accountability, audit could not confirm that the funds were
utilized for the intended purposes.

The Committee was presented with accountabilities.

59
Observations
The Committee was satisfied with the rest of the accountabilities except for the
funds advanced to the DEO amounting to UGX.682,000 for activities of the
association of DEOs. The Committee noted that the Association is not a formal
organization and therefore Government funds cannot be used for its activities.

Recommendations
The Committee recommends that the Accounting Officer recovers the
UGX.682,000 from the DEO.

Query 5.3: Failure to transfer unconditional Grants to Sub-Counties


Treasury released an amount of UGX.204,622,000 for the Sub-Counties.
However, a review of transfers to Sub-Counties revealed that out of the
UGX.204,622,000, only UGX.146,010,663 was transferred to the Sub-counties
leaving a balance of UGX.58,611,337.

The Committee was informed that all the funds were transferred. The problem
was that the acknowledgement receipts had not yet been received and were not
given to the auditors.
The Accounting Officer provided the evidence of the transfers to the
Committee.

Observations
The Committee was satisfied with the evidence of the transfers to the Sub-
Counties.

Recommendations
The Committee recommends that:
i. In future Accounting Officer should provide all the information to the
auditors to avoid such queries;

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ii. The query be dropped.

10. RAKAI DISTRICT

Query 5.1: Salary Overpayments


A review of the payroll revealed that UGX.39,487,993 was paid to various
Officers above their salary scale.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.2: Unacknowledged release to LVEMP II


It was observed that funds totaling to UGX.15,749,999 paid to LVEMP vide
EFT 4273156 of 15th March, 2015 for the implementation of LVEMP II CDD
activities lacked acknowledgement receipts.

The Accounting Officer submitted to the Committee an acknowledgement


receipt.

Observation
The Committee was satisfied with the evidence given.

Recommendation
The Committee recommends that the query be dropped.

Query 5.3: Road Sector

Query 5.3.1: Kagamba-Bbaale-Lwentulege Road


Council carried out works on this road at a cost of UGX.58,621,200.It was
observed that culverts purchased at UGX.7,896,000 were not installed. This
amounts to wasteful expenditure.

61
The Committee was presented with pictorial evidence of the works.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.1.1: Lwanda-Kiwenda Road


Council carried out works on Lwanda-Kiwenda Road at a cost of
UGX.43,601,000.

It was observed that culverts valued at UGX.19,493,000 were dumped by the


road side.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

11. LWENGO DISTRICT

Query 5.1: Funds not accounted for


At the time of audit, a total of UGX.196,049,907 advanced to various officers
remained unaccounted for. During the hearing Accounting Officer submitted
accountabilities to the Committee.

Observation
i. The Committee observed that the accountabilities were doubtful.
ii. The accounting officer admitted that his officers were not competent
enough to carry their tasks and so had failed him.
iii. The committee noted that the accounting officer was not in charge and
incompetent.

Recommendation
i. The Committee recommends the Accounting Officer recovers all the

62
funds from the officers;
ii. The Committee recommends that the appointing authority takes interest
in the officers conduct;
iii. Its further recommended that key officers including the district planner,
Procurement Officer, District Engineer, District Education Officer be
investigated on how they were recruited as the exhibited low levels of
competency;
iv. Further investigation be done on doubtful accountability provided by the
district to the Committee.

Query 5.2: Understaffing


The district had an approved staff establishment of 332 positions. However,
only 199 (60%) positions were filled leaving 133 (40%) posts vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.3: Lack of Fuel Utilization Records


Audit observed that fuel totaling UGX.7,946,250 lacked the requisite
documentation as there were no consumption schedules and no fuel orders for
the fuel that was drawn under the different departments.

The Accounting Officer submitted the fuel vouchers and receipts to the
Committee.

Observation
The fuel vouchers and receipts were doubtful and they were not tallying.

Recommendation
The Committee recommends that the Accounting Officer recovers
UGX.7,946,250 from the officers in the different departments for they did not

63
account for the use thereof.

Query 5.4: Utilization of the Capacity Building Grant (CBG)


A review of CBG expenditure revealed that the district spent UGX.26,689,820
while UGX.5,203,980 was spent at Lower Local Government (LLG) which is
16% of the total expenditure of UGX.32,128,106.

This affected implementation of capacity building activities in the LLGs.

The Accounting Officer explained that most of these funds were utilised for the
training of staff in the lower Local Government.

The Accounting Officer presented documentary evidence to the Committee.

Observation
The Committee was satisfied with the evidence.

Recommendation
The Committee recommends that the query be dropped.

Query 5.5: Payment of Salaries to Non-validated Staff

The District paid monthly salaries to un-validated staff amounting to


UGX.243,928,090.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

12. KALUNGU DISTRICT

Query 5.1: Understaffing


The district had an approved staff establishment of 62 key positions. However,

64
only 21 (34%) positions were filled leaving 41 (66%) posts vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.4: Local Revenue Shortfall


The district budgeted to collect UGX.293,464,000 but only UGX.180,618,914
was realized leading to a shortfall of UGX.112,845,086 representing 38% of the
budgeted Local Revenue.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.3: Over Expenditure on Software Activities


Audit observed that management received funds for DWSG worth UGX
328,985,492 therefore software activities should have been UGX 26,318,839.
However, actual expenditure on software activities was UGX.47,363,500
leading to an over expenditure of UGX.21,044,661 representing 63% of the
total grant received.
The Accounting Officer explained that this was due to wrong charging of items
in software activities.

However, the Accounting Officer made efforts to ensure that expenditure in the
water sector were in conformity with the sector guidelines and other relevant
laws and regulations.

The Committee was presented with documentary evidence.

Committee Observation
The documents provided did not tally and were therefore doubtful.

65
Recommendation
The committee recommends that the Accounting Officer recovers the UGX
21,044,661 over expenditure from the water officer immediately.

13. BUKOMANSIMBI DISTRICT

Query 5.1: Payroll

Query 5.1.1: Salary Overpayments


Payroll analysis carried out revealed that various staff were supposed to earn
salaries amounting to UGX.36,427,848 according to their scale but were
instead paid UGX.44,525,348 resulting into salary over payment of
UGX.4,781,554.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.2: Lack of Procurement Records


During the audit, records of procurements amounting to UGX.18,623,100 were
not availed for verification.
The Committee was presented with procurement records for the above
undertakings.

Observation
The Committee was satisfied with the evidence.

Recommendation
The Committee recommends that the query be dropped.

Query 5.3: Unaccounted for Funds


A total sum of UGX.2,405,000 lacked relevant supporting documents.

66
The Accounting Officer submitted the accountabilities to the Committee.

Observation
The figures in the receipts presented did not tally with the query

Recommendation
The Committee recommends that Accounting Officer recovers the UGX
2,405,000 that was not accounted for immediately.

Query 5.5: Understaffing


The district had an approved staff establishment of 372 positions. However,
only 199 (53%) positions were filled leaving 173 (47%) posts vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

14. LYANTONDE DISTRICT

Query 5.1 Under Staffing


The district had an approved staff establishment of 583 positions. However,
only 470 (80.6%) positions were filled leaving 113 (19.4%) posts vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.2 Un Accounted for Funds


A total sum of UGX.20,299,700 advanced to various individuals in the District
for official activities remained un-accounted for.
The Committee was informed that all the funds have now been accounted for
and the accountabilities were submitted.

67
Observations
The Committee was satisfied with the accountabilities.

Recommendations
The Committee recommends that the query be dropped.

Query 5.3: Direct procurements without approval of the Contracts


Committee.
It was observed that management procured a motorcycle for water department
worth UGX.13,900,000 using direct procurement without approval of the
contracts committee.

The Accounting Officer acknowledged the oversight and promised to abide by


the procurement regulations in all future procurements.

Observation.
The Accounting Officer and the procurement officer were negligent towards
compliance with the procurement regulations.

Recommendation
The Committee recommends that the accounting officer, procurement officer
and water officer be held liable and be reprimanded for negligence and
violation of the procurement regulations.

15. MITYANA DISTRICT

Query 5.1: Outstanding Commitments


It was observed that the District failed to meet its obligations on accounts
payable amounting to UGX. 94,949,931.

68
The Accounting Officer informed the Committee that the commitments built up
due to insufficient funds. The district is progressively clearing them and so far
a total of UGX. 30,008,916 has been cleared.

Evidence of the payment and a progressive schedule of payment was submitted


to the Committee.

Observation
The committee notes that government undertakings are guided by the
commitment control system in place.

Recommendation
The committee recommends that accounting officer is reprimanded for
committing the district outside the commitment control system.

Query 5.2: Procurements made from Non-Prequalified Suppliers


The audit report noted procurements totaling to UGX.10,420,000/= from non-
prequalified service providers.

The Committee was informed that City tyres was picked from PPDA register of
service providers for 2014/2015. The direct procurement was approved by the
District Procurement Committee for carpets, building materials and labour for
renovating the main administration block. A copy of the Contracts Committee
decision sheet was submitted to the Committee.

Observation
The committee notes that PPDA allows for a company prequalified to bid for
supply of goods and service subject to competition, however in this case only
one company was invited instead of at least two or three companies contrary to
the regulations.

69
Recommendation
i. The Committee recommends that Procurement Officer is cautioned for
failing to guide on the procurement regulations and processes.
ii. The Committee recommends that the query be dropped.

Query 5.3: Unaccounted for Funds


Audit reported that funds totaling to UGX 7,971,500 remained unaccounted
for at the time of audit.

The Committee was informed thatUGX.2,900,000 was spent by the


Environment sector and UGX 3,000,000 was spent on UBOS census activities
and UBOS took the original vouchers.

Observations
The Committee observed that there may be dual accountability on this item.
The Budget of the District should be crosschecked with the budget of Uganda
Bureau of Statistics (UBOS) to rule out dual accountability.
The district staff showed negligence.

Recommendation
The Committee recommends for reconciliation of the accounts of the district
and UBOS.

Query 5.4: Failure to Maintain an up-to-date Fixed Assets Register


Audit reported that some additions of assets made by the district were not
included in its assets register.

For observations and recommendations refer to crosscutting issue paragraph 13


of this report.

70
Query 5.5: Lack of a fully Constituted District Service Commission
Audit reported that during the period under review, the District Service
Commission was not fully constituted since it was composed of only 3
members out of the approved 5 with no chairperson.

The Accounting Officer informed the Committee that this was because council
had forwarded the names of the nominees to Public Service Commission had
been rejected.

Observations
The committee observed that the District Service Commission is now fully
constituted and operational.

Recommendation
The Committee recommends that the query be dropped.

16. KIBOGA DISTRICT

Query 5.1: Shortfall in Local Revenue


Council budgeted to collect 391,494,000 during the year but only 294,907,401
was collected as local revenue leading to a shortfall of 96,586,599. This
represents a 25% under collection of local revenue.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.2: Underfunding of UPE and USE


A review of head accounts for the 21 UPE funded schools and 9 USE schools
revealed that the District schools were under funded by 243,894,350 and
64,160,046 respectively.

This hinders the provision of quality services to the schools in the district

71
The Accounting Officer informed the Committee that the District Education
Officer and the Chief Administrative Officer had communicated to the Ministry
of Education, Science Technology and Sports about the shortfall. The
subsequent transfers of funds to the schools did not have a shortfall, however
the earlier shortfall was not recovered.

Observations
The shortfall in allocations to the schools disadvantaged the schools and must
be made good.

Recommendations
i. The Committee directed the Accounting Officer to follow up for the
refund.
ii. The Committee recommended that the query stands
iii. The Committee undertook to follow up the matter with the Ministry of
Education and Sports.

17. SEMBABULE DISTRICT

Query 5.1: Local Revenue Short fall


The district budgeted to collect UGX.470,362,686. However, only
UGX.320,471,681 was realized leading to a shortfall of UGX. 149,891,005. The
shortfall constituted 68% of the budgeted revenue.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.2: Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

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18. KALANGALA DISTRICT

Query 5.1: Local Revenue Performance


The district had budgeted to collect UGX.677,053,200 in Local Revenues but
only UGX.522,255,261 was realised resulting into a shortfall of
UGX.154,797,939. This constituted 23% of the budgeted local revenue.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.2: Expired Drugs

For observations and recommendations refer to crosscutting issue paragraph 5

Query 5.3: Lack of an up-to-date Fixed Assets Register


It was observed that management had not updated the fixed assets register in
respect of all fixed assets acquired during the year.

For observations and recommendations refer to crosscutting issue paragraph 13


of this report.

Query 5.4: Lack of Vehicle Movement Logbooks


The Auditor General observed that no vehicle log books maintained.

For observations and recommendations refer to crosscutting issue paragraph 14


of this report.

19. BUIKWE DISTRICT

Query 5.1: Payroll

Query 5.1.1: Over Payments of salary


Over payments of salaries to over 70 members of Staff who were supposed to

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get salaries amounting to UGX 20,092,881 and were instead paid UGX
42,194,772 resulting into overpayment of UGX 22,101,891.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.1.2: List of Reinstatements not supported by Instructions from


Accounting Officers.
Audit observed that a number of staff were have been reinstated without
instructions for reinstatement from the Accounting Officer.

The Committee was informed that the affected staffs were genuine and the
Accounting Officer presented evidence of submission to the Ministry of Public
Service on the erroneous deletions.

Observation
The Committee was satisfied with the evidence presented.

Recommendations
i. The Committee recommends that the query be dropped.

ii. The Committee advised the Accounting Officer to always copy letters on
matters relating to Accountability to the Auditor General.

Query 5.2: Funds Not Accounted for

Query 5.2.1: Unaccounted for Administrative Advances


A total of UGX 8,848,463 was advanced to various employees to carryout
official activities, but was not accounted for.

The Accounting Officer acknowledged that expenditures amounting to UGX

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8,848,463 was not accounted for. Following the Auditors advice, he wrote to
the responsible officers, they did attach accountabilities, minutes and activity
reports.

Observations
i. The Committee observed that some payments were irregular. For
example, departmental meetings are routine activities at the
workstation for which allowances should not be paid.
ii. Some accountability were doubtful for example a receipt indicating
that the fuel bought was meant to last for 2 days;
iii. For GAVI some activities were paid for in September three Months
after closure of the Financial Year.
iv. There were some payments made without authorization from the
Accounting Officer;
v. The advances were already outside the one month period when they
should be accounted for.

Recommendation
i. The committee recommends that the Accounting Officer recovers all
the funds that were paid without authority, immediately.
ii. Failure to recover the money the accounting Officer be held liable.

Query 5.3 Incompletely Vouched Expenditure


Audit reported that UGX 6,315,620 in respect of various activities was not
adequately supported by relevant documents and accountabilities.

The Accounting Officer submitted the accountabilities to the Committee.

Observations
The Committee Observed that:
i. The vouchers except the one for Cheque No. 297 were dated within the

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Financial Year 2014/15 and yet audit was conducted in September
2015. They were therefore available at the time of audit.
ii. The committee noted that district officials were breaking down the
procurements into small portions and buying the items from random
suppliers with intent to abuse the provision of micro purchases under
the PPDA law, thus allowing small purchases below one million to be
done without going through the procurement processes.
iii. Internal Audit did not verify the receipts and they did not even pass
through stores.
iv. The receipts for Fuel worth UGX 1,000,000 under Health were fictitious
with a Voucher date being 27th June 2014, request date being 30th June
2014, and Payment date 28th June 2014.
v. The payment under Voucher number 295 amounting to UGX. 2,314,570
was payment to Victoria, a company that was not prequalified. However
they were informed that the vehicle was procured through the Ministry of
Local Government as a guarantor and it maintains a Ministry of Local
Government number plate until the district has fully paid up. It is this
agreement that binds the district to use Victoria Motors for maintaining
the vehicle.

vi. The Committee observed that the procurement law supersedes the
agreement with the Ministry of Local Government, and so the Accounting
Officer and the Chief Finance Officer acted in breach of the law.
vii. The payment of fuel worth UGX. 1,200,000 to the Clerk to Council was
suspicious.

Recommendations
i. The committee recommends that the district should adhere to the
procurement laws and always conduct procurements as prescribed in
the law.
ii. The committee recommends that the Accounting Officer should recover

76
the UGX 1,000,000 that was advanced to Time Petrol Station under
Health Primary Health Care.
iii. The committee recommends that the Accounting Officer and the Chief
Finance Officer be reprimanded for breaching the procurement laws with
regard to dealings with Victoria Motors.

Query 5.4: Outstanding Commitments


Audit reported that UGX 231,357,76 remained unsettled at the end of the year.
The Accounting Officer acknowledged that Buikwe District owes Mukono
District UGX 106,800,449 in respect of salaries for Buikwe District which were
charged on Mukono District unconditional grant at the time Buikwe District
was curved out of Mukono District. This arose from the delay in separating the
payrolls of the two districts by the Ministry of Public Service.

On the other hand, Mukono District owes Buikwe District UGX 431,262,500=
in respect of land and other dues collected but not remitted to Buikwe District.

Observation

MOLG should always ensure that all issues are properly ironed out at the
separation of two local governments when a new one is created from an already
existing one.

Recommendation

The Committee recommends that the two districts of Mukono and Buikwe meet
to harmonize and resolve the matter under the guidance of the Permanent
Secretary, Ministry of Local Government.

Query 5.5: Construction of 8 Bore Holes


Audit reported that water from a borehole contained silver-like particles and
the residents complained about its safety and indicated that it was not fit for
human consumption and was basically being used for building/ construction
only.

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The Accounting Officer acknowledged that the water contained some particles
on physical observation. However, upon successful water quality analysis by
National Water and Sewerage Corporation (NWSC) the source showed
satisfactory physio-chemical and bacteriological characteristics which are
commensurate with the National Standards for portable water quality analysis
and advised the community to use the water for both domestic and livestock
accordingly.

Additionally the sector also followed up with the contractor to try and eliminate
the shinny particles. The contractor complied by blowing the well for 3 hours
and the water cleared. This was followed by a water analysis test by the water
sector.

The Accounting Officer submitted the certificate from NWSC and the water
analysis reports.

Observation
The Committee is satisfied with the explanation.

Recommendation
The Committee recommends that the query be dropped.

Query 5.6: Understaffing


Audit observed that the approved structure is 1730 and the staffing level were
1642 leaving 107 vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

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Query 5.7: Kawolo Hospital
i. Outstanding Electricity Bill

Audit reported an outstanding electricity bill of UGX 57,754,950/= as at 30th


June 2015

The Accounting Officer acknowledged the balance on Electricity bills at the


time of Audit. However the bill had risen to 78,000,000/= by June 2015 for
reasons listed below:

Medical equipment supplied by the Ministry of Health under Health


systems strengthening program consume a lot of power. These include
Oxygen concentrators, autoclaves, refrigerators, incinerator.

The power tariffs are rising yearly for instance in 2011, a unit was at
UGX. 405 and current unit is UGX. 764.20 and yet the PHC funding was
reduced from UGX 174million in 2010 to UGX. 152,622,000.

Observations

The committee notes that government hospitals are billed at a special rate for
power and water.

i. Water Source

Audit reported that the Hospital has no running water.

The Accounting Officer acknowledged that at the time of audit the hospital did
not have running water.

However, the management of NWSC installed a line along the old line with 3
stand pipes to provide water and the hospital management added more stand
pipes in the hospital quarters.

The hospital also has solar driven borehole donated by Water for All which
supplements the current water supply though not enough.

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Most of the water challenges were to be addressed in the coming renovation of
the hospital.

ii. Staff Accommodation

Audit reported a dilapidated Staff Structures


The Accounting Officer said it is true that all staff structures are dilapidated.
These are houses which were constructed in the 1960s and since that time
there has never been a major renovation.

The hospital does not receive Capital Development Fund to execute such works
and on a sad note, it is not one of the objectives of the impending renovation.

iii. Inadequate Storage Space

Several equipment were kept outside due to limited storage space thus items
on the verandah.

It is true that the Hospital does not have enough storage space, this is because
the available stores cannot accommodate whatever is received and that is why
some equipment remained outside the verandahs.

This challenge was captured in the renovation plan where it is expected that
the store will be expanded.

iv. Uncertified X-ray and Ultra Sound equipment.

Audit reported that the x-ray services at the hospital were not registered with
the Atomic Energy Council.

The Accounting Officer reported that the x-ray machine is still not registered
with the Atomic Energy Council. This is because the Hospital does not have a
qualified Radiographer which is one of the requirements for registration.

v. Lack of a qualified Radiographer.

Audited reported that the hospital did not have a qualified Radiographer.

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The Accounting Officer said that the hospital still does not have a
Radiographer but the wage has now been provided for Recruitment of a
Radiographer for the financial year 2016/17.

In the meantime the hospital Management decided to use a volunteer


Radiographer. Patients referred from outside the hospital pay UGX. 10,000 for
an X-ray. In-patients and accident victims do not pay.

Observation

i. An X-ray is very dangerous equipment if used incorrectly. It is therefore


necessary that it only be used by a radiographer who it totally
accountable to the hospital and to government.
ii. It is not correct to make patients pay at the general hospital.

Recommendation

The Committee recommends that the Accounting Officer should ensure that
the use of a volunteer Radiographer at Kawolo Hospital is stopped forth with;
subject to the passing of a council resolution on the matter and proper
guidelines being set up.

i. Shortage of Supply of Drugs.

Audit noted that, drug orders made by Kawolo hospital were not fully honored
by National Medical Stores.

The Accounting Officer said that indeed the hospital has short supply of drugs
and sundries and this has been attributed to:

Drug vote being reduced in FY 2014/15 from 460m to 360m today and this
means less drugs and sundries.

Kawolo Hospital is located on Kampala Jinja highway which is prone to


high rate accidents, on average the hospital gets 7 accidents daily hence
high consumption of resources leading to shortages.

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The number of patients has increased over this period.

ii. Unutilized Solar System

Audit found a complete set of solar panels supplied to the hospital in 2013
uninstalled and other equipment lying on the verandah.

The Accounting Officer informed the committee that the system consists of
equipment for boiling water and was supplied by the Ministry of Health in
2012. He confirmed that the equipment has not yet been installed. He provided
the Committee with evidence of his efforts to follow-up with the Ministry of
Health but reported that no feedback has been obtained

General Observations on Kawolo Hospital


The Committee observed that:
i. Underfunding and mismanagement are main causes of problems in
Kawolo Hospital.
ii. The Chief Administrative Officer and the District Health Officer have
abandoned the hospital. They had written to the Ministry of Health to
take over the Hospital but the Ministry declined. The Ministry however
noted the hospitals infrastructural challenges and undertook to handle
those under the forthcoming renovations.

Recommendation
i. The committee recommends an overhaul renovation of the hospital
ii. The committee recommends that the Hospital be up graded to a regional
hospital given the nature of operations the hospital handles.
iii. The committee recommends a special grant for all district hospitals

Query 5.8: Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

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20. BUTAMBALA DISTRICT

Query 5.1: Lack of Property Valuation List


Audit Reported lack of a Property Valuation list in Butambala District.

For observations and recommendations refer to crosscutting issue paragraph 10


and 23 of this report.

Query 5.2: Failure to Review Revenue Rates


It was reported that Council did not review revenue rates and continued
to charge old rates.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.3: Gombe Hospital

Query 5.3.1: Gombe Hospital Infrastructure


Audit reported on the poor infrastructure in the hospital.

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

Query 5.3.2: Non-Isolation of Patients with Infectious Diseases


Audit reported that the hospital has general wards for men, women and
children but people with infectious diseases were not isolated from other
patients. Management intervened by keeping the windows open to allow air
circulation, but this may not offer full protection, especially of airborne
diseases.

Observation
The Committee observes that it is dangerous to keep people with infectious

83
diseases in the same ward as other patients even with good air circulation
because the others too might get infected.

Recommendation
The Committee recommends that:
i. Patients with infectious diseases should be referred to Hospitals
that are properly equipped to handle them;
ii. The Accounting Officer should immediately inform the Ministry of
Health of the lack of an isolation unit at the Hospital.
iii. The Accounting Officer immediately come up with a method of
isolating patients with infectious diseases.

Query 5.3.3: Waste Management


Audit inspection reported a challenge of waste management in the hospital as
there were only 2 incinerators in place and one of them is not being used due
to high fuel consumption and the other one did not fully burn the waste.
Besides there was no system of separating the different kinds of waste but
rather all waste was dumped together in the placenta pit.

The Accounting Officer explained that the hospital follows a very clear system
of waste segregation as recommended by the Ministry of Health. Waste Bins
with different designated colors are placed in every ward. However at the time
of audit, the operational incinerator was too small and the hospital would
directly burn its waste.

The Committee was informed that the second incinerator has been repaired
and both incinerators are now working. The hospital is engaging Green Label a
company contracted by the Ministry of Health under an USAID project to
collect medical waste. In Butambala District however, Green Label only works
in Kyabadaza Health Center.

For observations and recommendations refer to crosscutting issue paragraph 5

84
of this report.

5.3.4: EXPIRED DRUGS AT GOMBE HOSPITAL

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

Query 5.3.4: Water Scarcity


It was observed that the Hospital uses a water pump that solely runs
with availability of electricity to secure water for the hospital. Through
interviews, it was observed that there were challenges of frequent break
down of the water pump, load shedding, disconnection of electricity and
high water pump maintenance costs. In addition, during inspections, it
was observed that the plumbing system of the hospital requires over haul
as evidenced by the blockage of the sewer pipes and the non-availability
of piped water in the taps.

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

Query 5.3: Understaffing


The district has an approved structure of 545 staff. However, out of 545
approved posts, only 290 were filled leaving 255 posts vacant
representing 46.8% of the approved structure.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

21. MPIGI District

Query 5.1: Outstanding Employee Benefits


A review of the financial statements revealed that the district had pension

85
arrears amounting to UGX.143,507,454, gratuity for political leaders
amounting to UGX.2,358,720 and employee costs amounting to
UGX.170,820,839 by the close of the year under review.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.2: Understaffing


The district has an approved structure of 1,704 staff. However, out of the
approved structure of 1,704 posts, only 1,472 positions were filled leaving a
balance of 232 posts vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.3: Service Delivery


During the year, the District spent UGX. 1,074,442,968 on road works on
Kikunyu-Kibanga road (12.9 km) Road whereUGX. 26,609,600 was spent on
gravelling, shaping and application of murrum, Mbizinya-Kumbya-Jjalamba
7.03 km road where UGX. 41,867,000 was spent on routine mechanized
maintenance works and Nabyewanga-Jjiri 8.95 km road where UGX.
38,813,000 was spent on mechanized maintenance. The works were completed
in May 2015 except Nabyewanga-Jjiri that extended to June 2015.
Audit done in September 2015 found the side drains of all the three roads
blocked. In the case of Kikunyu-Kibanga road the side drains were clogged due
to poor maintenance, Mbizinya-Kumbya-Jjalamba the side drains were not
opened at all and Nabyewanga-Jjiri the side drains were poorly opened.

Observation
The Committee observes that Poor road drainage leads to wearing off of roads
to run-off water thus shortening the road life span.

86
Recommendation
The Committee recommends that all Road works attention should be paid to
drainage and the first call on routine maintenance of roads under the road
fund should be drainage.

Query5.4 Inadequate Infrastructure in Schools and Classrooms,


Office Blocks and Latrines in Dire Condition

For observations and recommendations refer to crosscutting issue paragraph 2


of this report.

Query Lack of ICT


Audit reported lack of ICT in the district.

For observations and recommendations refer to crosscutting issue paragraph 7


of this report.

Query 5.6: Lack of a Risk Management Policy


The Local Governments Financial and Accounting Regulations 2007 section
103(1 & 4) require that a risk management system be instituted by the Head of
Finance. An interview with the head of internal audit revealed that there was
no documented risk management policy at the district. Without such a policy,
the entity is subject to risks of failing to achieve its strategic objectives due to
inability to address challenges promptly as they occur during implementation
of its corporate plan.
The Accounting Officer explained that they relied on the Head of Finance and
Internal Audit in enforcing the existing regulations with constant supervision
of subordinates and rigorous follow up on all Internal Audit recommendations
to ensure best practices are adhered to and safeguard of public funds.
However, the district was in the process of developing a risk management

87
policy based on the regulations.
The Committee was informed that ateam has been instituted to draft a risk
management policy for consideration by the relevant organs of council.

Recommendation
The Committee advised the Accounting Officer to expedite the formulation of
the Risk Management Policy.

22. NAKASEKE DISTRICT

Query 5.1: Un-authorised Excess Expenditure


UGX.1,011,278,633 was spent over and above the approved budget of
UGX.7,785,941,465 under Education department on salaries without authority
of the Council.

Management explained that there was a supplementary received from Central


Government to cater for shortages in salaries for teachers. However, there was
no formal communication from the Ministry of Finance Planning and Economic
Development about the supplementary to enable the initiation of the process of
approving the supplementary budget by the Council.

However, the District Council that sat on 12/04/2016 ratified the


Supplementary Budget.

Observation
The Committee observed that:
i. The CAO received the management letter before December 2015 but did
not act on the matter till April 2016.
ii. It was anomalous for the CAO to spend the money without approval of
the supplementary from council;
iii. It was anomalous to forward the supplementary to the district without

88
the necessary documentation;

Recommendations:
i. The Ministry of Finance, Planning and Economic Development should
ensure that all supplementary provisions to the different Local
Governments are accompanied with the necessary documentation.
ii. The Accounting Officer takes responsibility for spending the
supplementary without authority from Council and be cautioned for
negligence of duty.

Query5.2: Payables

Payables totaling to UGX. 50,389,500 remained unsettled at the end of the


year.

For observations and recommendations refer to crosscutting issue paragraph 15


of this report.

Query 5.2.1: Over Payment of Salary


During the year the council paid salaries over and above the authorised salary
scales. The overpayments amounted to UGX 16,482,829.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.2.2: High Staff Turn-over


According to the Public Service Standing Orders, 2010 paragraph (F-a)(3), a
public officer is employed in public trust and on the clear understanding that
the whole of his time is at the disposal of government. Contrary to this
requirement, during the year under review, the district experienced a high
labor turn-over. This included two cases of resignation and 12 abscondments.
Staff turn-over leads to loss of morale among existing employees and may lead

89
to poor service delivery.
The Accounting Officer attributed the high turnover to remoteness of the
district, characterized by poor communication network, poor working
conditions, inadequate facilities and food insecurity. The Accounting Officer
further explained that the Ministry of Public Service had been contacted to
designate the district a hard to reach area but no response had been received
by the district.
The parts of the district affected are Nakaseke North constituency in the Sub
Counties of Kinoni, Ngoma, Kinyogoga and some parts of Wakyato sub
country. The District is still following up with Ministry of Public Service to have
the mentioned areas designated as hard to reach.

Observation
The Committee observed that given the facts given by the Accounting Officer
the affected parts of the District and not the entire District should be
designated hard to reach areas.

Recommendation
The Committee recommends that:
i. The Ministry of Public Service should urgently designate Nakaseke North
Constituency a hard to reach area.
ii. The query be dropped.

Query5.2.3 : Inadequate school Desks

For observations and recommendations refer to crosscutting issue paragraph 2


of this report.

Query 5.2.4: Cash Books not Maintained by Health Centres


A sample of five Health Center showed that cash books are not being
maintained.

90
For observations and recommendations refer to crosscutting issue paragraph 17
of this report.

Query5.2.5 Financial Reporting by Primary Schools


Audit reported that that cash books are not being maintained in Primary
Schools.

For observations and recommendations refer to crosscutting issue paragraph 17


of this report.

Query 5.2.6: Poor Condition of District Roads


Documentary review revealed that the district has a total road network of
district, urban and community roads currently at 1,849km of which 1,358km,
representing 74% are in poor condition.
The Accounting Officer attributed the poor road conditions to the absence of a
well-equipped road unit.

Observation
The Committee observed that:
i. The District did not have a roads Committee in the Year under review.
ii. The decisions that should have been made by the Roads Committee were
unilaterally made by the District Engineer.
iii. the documents presented to the Committee indicate that UGX 1.5 Billion
was spent on Road works yet the District was given an allocation of
UGX.1billion.

Recommendation
The Committee recommends that:
i. The Accounting Officer reprimands the District Engineer for constituting
himself into a district roads committee;

91
ii. The committee recommends that the Accounting Officer and the District
Engineer are interdicted and investigated for the discrepancies in the
accountability for the funds;

iii. The committee recommends that the District does not access more funds
from the road fund before constitution of a Roads Committee.

Query 5.2.7: Borehole Construction


During the year, the district contracted M/s Galaxy Agro Tech (U) Ltd to
construct 14 boreholes at several sites at a contract price of UGX.
253,884,387. However, audit inspection carried out in July 2015 revealed that
three boreholes had their water were not suitable for human consumption.

The Accounting Officer informed the Committee that fresh water quality tests
and surveillance for Kayunga village boreholes, Nakawungu village borehole
and Kyalushebeka village borehole were made and water found satisfactory
and safe for human consumption and the contractors were given certificates of
completion.

Observation
The Committee observed that:
i. The contractors report had no address, no date or no signature.
ii. The report was on a Nakaseke District Letter Head which is a
Government letter head.

Recommendation
The Committee upholds the query.

Query 5.3: Lack of ICT


Audit reported a lack of ICT in the district.

For observations and recommendations refer to crosscutting issue paragraph 7

92
of this report.

23. LUWEERO DISTRICT

Query 8.1: Loss of Cash


The financial statements indicate that the district incurred a financial loss of
UGX.50,115,600. Out of this amount, the loss of UGX 19,962,950 has been
outstanding as far back as the year 2000/2001 while UGX 30,152,650 was
lost in the financial year under audit. Loss of cash may be due to poor
supervision of responsible officers and weak internal controls. Failure to
recover losses over a long period may lead to their write-off as bad debts.

The Accounting Officer explained that efforts to recover carried over losses
totaling to UGX 19,962,950 were futile as no status report was received from
police and the officers involved in the scam cannot be traced. The process of
writing off this loss was ongoing. The Accounting Officer further explained that
the recent loss of UGX 30,152,650 was investigated internally, and it led to
interdiction of two officers and the matter was submitted to police for further
investigations.

The Officers entered into a pre-bargaining plea to pay the funds to Bank of
Uganda. It is claimed that they have paid up in two installments but the
Accounting Officer has only seen one receipt of the first installment of UGX.
9,000,000 which according to him looks doubtful.
He has not got the second receipt.

Observation
The Committee was concerned that the District could fail to have addresses of
people who have worked with them yet Government keeps files for all its
employees;
The Committee observed that:

93
i. the loses are an indication of weak internal control systems.
ii. Since the interdicted people have owned up to the embezzlement and
even refunded the money, they should not still be on interdiction but
rather dismissed. The continuation of paying them half their salary
monthly is misuse of Government funds;

Recommendation
i. The Committee recommends an expeditious conclusion of the handling
of the case
ii. The Committee recommends that the CID follows up the matter with a
view to:
Prosecute these people.
Cause the submission of the receipt of the second payment to Bank of
Uganda to the Committee.

Query8.2: Salary Arrears

A review of the payroll verification reports by the Senior Personnel Officer (SPO)
revealed that the district had unpaid arrears for the months of May and June
2015 totalling to UGX 203,101,945.

For observations and recommendations refer to crosscutting issue paragraph 3.3


of this report.

Query 8.3: Outstanding Commitments


The statement of outstanding commitments reported commitments totaling
UGX. 201,403,969 at the end of the year. Outstanding commitments expose
the district to litigation and costs from legal suits by creditors.

The Accounting Officer explained that the outstanding commitment accrued


during past years, and it relates to unpaid staff arrears for Police and Prisons

94
who were transferred to the Ministry of Internal Affairs and other service
providers.

He informed the Committee that for the Prisons and Police Officers the district
has collected all their details and submitted them to the Ministry of Public
Service for clearance.

In regard to the Service Providers, they have paid 17.5million, verified credit
worth 45.5 million and have 70.4 million not yet identified.
He said for the 70.4 million that is not yet cleared, he is going to put a notice
in the newspapers asking them to report to the district with evidence of
supplying services to the district. The evidence will be verified and if genuine
they will be paid. The credits that will remain unclaimed will be written off.

Observation
The Committee observed that:
i. It is not normal for a company to supply an entity and not claim for its
payment for a long period of time. The Committee is of the view that
many of the unclaimed credits are fictitious.
ii. The committee noted on review of records that the same companies were
supplying Nakaseka and Luwero districts and they were doubtful
iii. The District yet again portrays poor record keeping.

Recommendation
The Committee recommends that:
i. The claims be referred to Auditor General for scrutiny;
ii. Payments to the concerned creditors be stayed until a report from the
Auditor General
iii. The advert be run and unclaimed creditors written off.

95
Query8.4: Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

Query 8.5: Review of the Youth Livelihood Programme (YLP)


During the financial year 2014/15, the district incurred UGX.467,200,590 to
support various youth groups under the Youth Livelihood Program. Review of
the group files revealed the following;

Query 8.5.1: Funds Not Recovered


Chapter 2.8 (g) of the Youth Livelihood Program document, 2013 requires that
the enterprise have a reasonable maturity period that permits re-payment of
the Interest-free Revolving Fund within a time period of one (1) year. However,
it was noted that the evaluation teams did not evaluate the maturity of the
projects and consequently 96% of the funds equivalent to UGX.442,358,600
was not recovered by the end of the financial year. In response, the Accounting
Officer explained that the Youth Livelihood project has a maturity period of
three years, and that funds would be recovered to enable access to new
groups.

The Accounting Officer informed the Committee that theYouth livelihood


program has a maturity period of three years; therefore the process of
recovering funds was and is still going on to enable new beneficiaries access
funds.
The recovery rate is slow but so far a recovery of 61.468 Million has been
made.

Observation
The committee noted with concern that the project had difficult with guidelines
for its operationalization.

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Recommendation
The Committee recommended that:
i. Priority should be given to more progressive groups
ii. The committee recommends that a thorough investigation be carried out
about the project implementation and a forensic audit to ensure
realization of the intended objectives of the project.

Query 8.5.2: Target Beneficiaries Not Verified


Chapter 2.4 of the YLP program document, 2013 indicates that the target
beneficiaries of the Programme will be the unemployed youth aged between 18
to 30 years. However, it was noted that no verification of age was done for the
beneficiaries. There is a risk of the project not reaching its target population.
The Accounting Officer acknowledged the fact that youth had no documentary
evidence of age and that reliance was placed on the community and local area
LC1 who knew them.
The Accounting Officer informed the Committee that by the time of project
inception, the youth had no documentary evidence of age and that reliance was
placed on community and Local Area Council one who knew them well.
This is noted, National Identification cards now provide basic information to
identify youth.

Observation
The age of Ugandans who have National Identity Cards is now clear and the
project should always use National Identity Cards to identify future
beneficiaries.

Recommendation
The Committee recommends that the query be dropped.

Query 8.6: Provision of Education Services

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Instructional Materials to Schools
In order to improve proficiency levels at primary level education, the Ministry of
Education, Science, Technology and Sports (MoESTS) supplied instructional
materials like textbooks to various primary schools in Luweero District.
Interviews with the District Education Officer and Head Teachers from ten
schools, Nalinya, Kikube C/U, Lwantale, Busiika UMEA, Mazzi, Nakakono, St
Kalori Katagwe, Buyuki, Luwube and Wobulenzi UMEA Primary Schools
revealed the following;

a) User Needs Not Assessed:


The Head teachers of the schools inspected revealed that the books delivered to
them were not the much needed ones for sciences, mathematics and English.
For example Nalinya Primary school received 101 local language Luganda
readers books and teaching guides for primary 5, 6 and 7 from Fountain
Publisher Ltd. However, the school expressed concern that they preferred
books for the examinable subjects like Sciences, English and mathematics, as
the Luganda books were not very beneficial to them.

b) Non-Involvement of the District Education Officer


Interview with the District Education Officer revealed that he was not involved
in determining the number and types of instructional materials needed by
schools; he did not obtain information on material supplied by the ministry
and thus supervision of usage of these materials was not done by the district.
The Accounting Officer explained that the whole management of instructional
materials is vested with the Ministry of Education and Sports.

c) Instructional Materials Not Considered During School Inspection Visits


Review of the School inspection reports revealed that the inspectors did not
consider receipt, type and adequacy of instructional materials given to schools
during the inspection visits. It was therefore not possible to assess the gaps in
school needs.

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The Committee observed that although the management of instructional
materials is vested with the Ministry of Education the Inspectors should get
more involved in the exercise.

Observation
i. It is irregular for the Ministry of Education and Sports to concentrate on
issuing books on non-examinable subjects as opposed to examinable
subjects;
ii. It is not proper for the Ministry of Education to exclude the District
Education Officer in any activity that involves his/her sector because
they are the officials answerable for anything that affects the sector in
the District.

Recommendation
i. Ministry of Education and Sports should give schools only relevant
books
ii. The Inspectorate department of the Ministry of Education should take
keen interest in censoring educational materials before their distribution
to the schools.
iii. MOESTS should always consult with the District Education Officer
before sending educational materials to the districts their activities in the
districts.

Query 8.7: Review of Luwero Rwenzori Development Project (LRDP)

Query 8.7.1: Doubtful Supply of 126 Friesian In-Calf Heifers


Ms Kesso Technical Services Ltd. was awarded a contract for Supply of 126
Friesian In Calf Heifers under Luwero Rwenzori Development Project (LRDP) at
a contract price of UGX.260, 820,000.
On 23rd January, 2015, the district paid the contractor UGX 237,387,600 for
the supply of 122 Heifers but a review of the expenditure and procurement

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process revealed the following matters:

Some of the alleged beneficiaries lacked contacts like telephone contacts,


parishes of residence and second names. Consequently, tracing the
persons to confirm receipt of the animals worth UGX.18, 630,000 was
difficult.

Cows allegedly supplied did not have identification tags and as such they
could not be differentiated from any other cows.

The Accounting Officer confirmed that 122 cows were procured and
distributed; noting that some of the beneficiaries did not have phone contacts
but they could be located through the Sub County Chiefs of the respective
localities.

The Accounting Officer submitted a list of beneficiaries and signatures.

Observation
i. The Committee observed that:
ii. the list of beneficiaries provided to the committee did not have 122
signatures;
iii. The entire list of beneficiaries seems to have been written and signed by
one individual.

Recommendation
The Committee upheld the query.

Query 8.7.2 Supply of 46,666 Banana Tissues Culture Plantlets


46,666 banana tissues culture plantlets were supplied by M/s Agro-Genetic
Technologies Ltd. under the Luwero-Rwenzori Development Project (LRDP) at
UGX.139, 998,000. On 27th April, 2015, the district paid the contractor the
full contract sum of UGX.139, 998,000. A review of the supporting documents

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revealed that supplies were made to 7 Sub-counties. However, a review of the
inspection report of the Acting Senior Administrative Secretary for Kikyusa
Sub-County revealed that many of the plantations were dying. Consequently
the assessment of the beneficiaries capacity to manage the project was
rendered faulty.

The Accounting Officer, explained that the banana regime was being affected
by new diseases, and that the absence of Sub-County Agriculture extension
staff was affecting provision of the needed services to farmers. He informed the
Committee that the Problem was only in Kikyusa Sub-County out of the seven
sub-counties supplied and even there 60% of the plantations survived.

Observation
i. The Committee noted that the Focal Point Person did not do due
diligence before supplying the famers with the tissues.
ii. Banana Bacterial wilt is not a new disease so the Subject Matter
Specialist should have ensured that the tissue was clean and sensitized
the population against the problem.

Recommendation
The committee upheld the query.

Query 8.8: Understaffing


The district has an approved staff establishment of 363 posts. However,
out of the approved posts of 363, only 268 were filled, leaving 91 posts,
representing 25% of the approved establishment vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

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Query 8.9: Management of Information Technology

For observations and recommendations refer to crosscutting issue paragraph 7


of this report.

Query 8.10: Use and Care of Government Vehicles


It was observed, that there were no vehicle files maintained to show the
monthly fuel consumption of the vehicle, any servicing or repairs performed
and other information about the vehicles held.

In addition, there were no movement instructions for the vehicles travelling


outside Luweero and no instructions to have vehicles parked by the drivers at
the district after office hours and weekends. This could lead to misuse and
abuse of vehicles by officers to whom they are assigned. Besides, lack of
policies on control and management of vehicle may lead to unplanned
maintenance of vehicles.

Query 8.11: Local Service Tax


Audit reported that the District only levied Local service tax on Government
employees within the District. This leaves the Non-Government
employees/persons and persons residing within the District untaxed.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 8.12: Dormant Creditors Accounts (Merge with the earlier query
on creditors).
A review of creditors schedule attached to the financial statements revealed
that a number of creditor accounts totaling to UGX143,680,680 remained
dormant during the year. Some of the creditors date as far back as 1996/1997
Financial Year.

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This was attributed to failure by management to prioritise payment of
outstanding creditors in the budget. Dormant creditors lead to accumulation of
creditors and it exposes council to litigation costs from legal suits by overdue
creditors.

The Accounting Officer informed the Committee that the District has written to
the creditors to confirm their debts and are using the available resources to
clear the aged obligations. This process will continue as and when resources
become available.

Observation
The Committee observed that it is not fair for the District to hold up suppliers
money and reiterates the observation of the Auditor General that this
predisposes the district to litigation.

Recommendation
The Committee recommends that the district prioritizes the payment of
creditors.

24. NAKASONGOLA DISTRICT

Query 5.1: Outstanding Pension liability


It was observed that the district has outstanding pension liability of
UGX.158,361,947 payable to former employees of the district.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.2.1 Unaccounted for Advances


Audit noted that administrative advances amounting to UGX.5,219,120

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remained unaccounted for at the year end, Consequently, the Auditor General
was not able to confirm that the funds were utilized for the intended purposes.

The Accounting Officer acknowledged that funds had not been accounted for
and he attributed it to the fact that officers had not accessed those funds at
the time of audit because the EFTs (Electronic Funds Transfers) delayed.
However, when the officers received the funds accountabilities were made,
evidence of which was presented to the Committee.

Observation
The Committee observed that the expenditure of fuel worthy 950,000 in
one sub-county is doubtful.

The Committee also found the practice of using of cash receipts for fuel
as opposed to a voucher system doubtful. This was exacerbated by the
fact that the receipts from the same petrol station varied in format. They
noted that the Government usually uses the voucher system.

The Committee observed that there is a lack of seriousness in adhering


to the strict accountability regulations.

Recommendation
The Committee rejected the cash receipts and recommends that the
Accounting Officer recovers the money.

Query 5.2.2: Incompletely Vouched Expenditure


An amount of UGX 44,272,579 lacked the relevant supporting documents.
Consequently, the Auditor General could not confirm that the funds were
utilized for the intended purpose.

Query5.3: Understaffing
The district has an approved structure of 292 staff. However, out of the

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approved structure of 292 staff, only 193 positions were filled leaving 99 posts
vacant, representing 34% of the approved structure

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.4: Incomplete Projects


It was observed that there were delayed completions of works in six projects
worth UGX. 97,117,874 and the incomplete works were rolled over to the
subsequent year.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.4.1: Incomplete Documentation


A review of a sample of procurements worth UGX.56,590,627 revealed that the
files did not have supervision and monitoring reports, completion certificates
and payment details.

Failure to document procedures casts doubt on the underlying transactions


and transparency in the procurement process.

The Accounting Officer confirmed that some documents were missing on the
procurement files but said they were now available and submitted them to the
Committee.

Observation
i. The Committee noted that among the documents given there were no
completion certificates and no payment details.
ii. There are no supervision and monitoring reports

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The Committee noted that:
i. The Accounting Officer did not do his supervisory roles
ii. A Maize mill of UGX.28,000,000 was over priced

Recommendation
The Committee upheld the query.

Query 5.5 Incomplete Assets Register


It was reported that the district had an incomplete Assets Register at the time
of audit.

For observations and recommendations refer to crosscutting issue paragraph 13


of this report.

Query 5.5.1 Lack of System of Planned Preventative Maintenance for


Vehicles
Audit noted that the district did not provide for scheduled maintenance of
vehicles, maintenance was only initiated after a vehicle broke down or
deteriorates badly. As a result some repairable vehicles lay grounded with no
plans to repair them.

For observations and recommendations refer to crosscutting issue paragraph 14


of this report.

Query 5.3: PROVISION OF EDUCATION SERVICES


For observations and recommendations refer to crosscutting issue paragraph 2
of this report.

25. GOMBA DISTRICT

Query 5.1: Unaccounted for Funds


Audit observed that UGX.70,357,900 was not accounted for at the time of

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audit contrary to the Regulations.

The Committee was presented with the Accountabilities.

Observations
The Committee found the accountabilities doubtful and rejected them.

Recommendation
The Committee recommends that the Accounting Officer recovers the
UGX.70,357,900 .

Query 5.2: Non-Remittance of Local Service Tax to Lower Local


Governments.
Audit noted that, the District collected Local Service Tax (LST) totaling UGX
38,576,000 for the year under review but no remittances were made to Lower
Local Governments as their share of local revenue collections. It is probable
that these funds were spent at source at the district. Failure to remit local
revenue collections affects the implementation of planned activities at Lower
Local Governments.

The Committee was informed that the District did not have acknowledgement
receipts at the time of audit but had later remitted. They provided evidence.

Observation
The Committee was satisfied.

Recommendation
The Committee recommends that the query be dropped.

Query 5.3: Un authorized Expenditure


Expenditure amounting to UGX.67,315,000 was incurred on road works that

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were not provided in the annual work-plan submitted and approved by Uganda
Road fund for the year under review.

This was irregular.

The Accounting Officer explained that these roads were handled as emergency
cases and that Council approved this activity under greater Kisozi Livelihood
Road construction region. However, the Council minutes approving these
roads were not presented for audit verification.
The Committee was informed that it was ratified by Council and evidence was
given.

Observation
The Committee was satisfied with the explanation.

Recommendation
The Committee recommends that the query be dropped.

Query 5.4: Direct Procurements


The District carried out direct procurements without justification.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.5: Use of Non-Prequalified Supplier


Services worth UGX.24,242,000 were directly procured from a service provider
(Ms. Kiyinda Carpentry Workshop) who had been rejected during
prequalification for non-compliance with the prequalification.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

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Query 5.6: Payments of VAT on Non- Tax Invoices
It was observed that, suppliers whose contract sums were VAT inclusive were
being paid without using tax invoices. There is a risk that the VAT paid on
supplies amounting to UGX.15, 868,208 may not have been remitted to the
Tax Authority.

Management explained that all prices quoted by service providers were VAT
inclusive. However, management did not provide evidence to confirm that the
service providers were VAT registered to justify inclusion of VAT in their
quotations.

Recommendation
The Committee upheld the audit advisory recommendation.

Query 5.7: Lack of Performance Security


No performance security was provided for contract worth UGX. 108,695,000.
Breach of the contract requirement was a result of failure by management to
observe the terms and conditions of the contract.

The Accounting Officer was advised to ensure that contract terms are duly
observed to avoid breach of contract.

Observation
The Committee noted with great concern that Gomba District has issues of
compliance with procurement laws arising from laxity or incompetence or both.

Recommendation
The Committee recommends that the advisory recommendation of the Auditor
General be upheld

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Query 5.8: Staffing Gaps
The district has an approved structure of 419 staff. Out of the 419
approved posts, only 256 posts were filled, leaving a balance of 163 posts
vacant, representing 39% of the approved posts.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.9: Lack of Information, Communication (IT) Policy

For observations and recommendations refer to crosscutting issue paragraph 7


of this report.

Query 5.10 Borehole Construction


Audit observed that five Bore holes were constructed by China Geo Engineering
Cooperation at a cost of UGX.108,695,000 in Mpenja, Sserinye, Kakima
Kawuki, Katungulu and Kifamba. However, on inspection, it was observed that
the water at Mpenjam Sserinya and Kakima was brown in colour and stinking.

The water may not be fit for human consumption and the matter requires
urgent attention.

The Committee was informed that at the time of audit the borehole had just
been sunk but the water later cleared.

Observation
The Committee was satisfied with the explanation.

Recommendation
The Committee recommends that
District authorities should in future wait to obtain certificates of water quality
from NWSC before opening the water points for use.

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There should be periodic tests after every six months..

26. BUVUMA DISTRICT

Query 5.1: Understaffing


The district has an approved structure of 536 staff. However, out of the 536
approved posts, only 316 posts were filled leaving 220 posts vacant,
representing 41% of the approved establishment.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report

Query 5.1.2: Unpaid Staff Salaries


The Payroll audit carried out in the month of August, 2015 revealed that 171
District staff and 14 Political Leaders had not been paid their monthly salary
and Gratuity respectively for the month of June 2015 to the tune of
UGX.120,318,311.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.2: Water Sector


During the year under audit the district received UGX 387,627,000 and carried
out rehabilitation of 6 boreholes, construction of 5 shallow wells and drilling of
4 deep boreholes. Inspections carried out on the 18th August, 2015 on the
water sources revealed that water at the 5 shallow wells and at 4 boreholes
had an unpleasant smell.
The Committee was informed that:
i. The smell was attributed to the location of the boreholes being close to
the lake and the color was due to the presence of un-dissolved
chemicals;

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ii. There was a report by a consultant before water sources were drilled;
and one after the water sources had developed problems;
iii. Inspection on the water sources was last done in May 2015;

Observations

The Committee observes that:


i. The Accounting Officer engaged a consultant to test water quality even
before funds were released. The Auditor General carried out inspections
on 18th August, 2015 yet the certificate of analysis submitted was dated
19th May 2015.
ii. The certificate of payment submitted by the Accounting Officer was
doubtful
iii. Since May 2015, the lives of local communities have been compromised
as they consumed unsafe water.
iv. Government lost colossal sums of money in investments arising out of
non-inspection of the water sources.

Recommendations
The committee upholds the query.

Query 5.3: Education Sector

Query 5.3.1: Limited Access to Schools


Section 5 (j) of the Education (Pre-Primary, Primary and Post-Primary) Act,
states that Government through its relevant agencies is responsible among
other things for ensuring equitable distribution of education institutions. It
was observed that the district has only 12 Government aided primary schools,
one Government aided secondary school and no Tertiary institution.
Accordingly, 4 out of 8 sub counties do not have secondary schools while three
sub counties have no Government Aided Primary schools. This was attributed
to the Hard to reach nature of the area with difficulty in connecting from one

112
island to another by pupils and teachers and expensive nature of island
environment to contractors. This limits achievement of the objective of
universal primary education.
The Accounting Officer attributed this situation to failure by the Central
Government

The Committee was informed that: -

i. The Accounting Officer received clearance to recruit primary school


teachers;
ii. Construction of classroom blocks has commenced for a Seed school in
Bweeema Sub County.

Observations

The Committee observes that the challenges facing the education sector in the
District are beyond the Accounting Officer.

Recommendations

The Committee recommends that the MOESTS improves education services in


Buvuma District as a matter of urgency.

Query 5.3.2: Schools Operating Below the Minimum Set Standards

For observations and recommendations refer to crosscutting issue paragraph 2


of this report.

Query 5.3.1: Financial Reporting by Primary Schools


Audit reported lack of financial reporting in schools.

For observations and recommendations refer to crosscutting issue paragraph 17

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of this report.

Query 5.3: Lack of Land Title


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

27. MUBENDE DISTRICT

Query 5.1: Unaccounted for Funds


At the time of audit, a total of UGX.3,160,000 had not been accounted.

Observation
The Accounting officer did not present accountabilities for the funds.

Recommendation
The Committee recommends that the Accounting Officer recovers the
money.

Query 5.2: Shortfall in Local Revenue


The district had budgeted to collect UGX.1,257,699,900 in local revenue
but only collected UGX.1,185,271,934, leading to a shortfall of
UGX.72,427,966.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.3: Unremitted Primary Health Care funds to Health Centres


and NGO Hospitals.
It was observed that the district had not remitted to Health Centre II and
some NGO hospitals UGX.18,081,790 in the year under review.

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The Accounting Officer explained that owing to the increase in the dollar
rate, the funds earlier planned became insufficient and the Accounting
Officer communicated to the MFP&ED on this matter.
The funds were released in the subsequent quota.
Evidence of the communication was presented to the Committee.

Observation
The Committee was satisfied with the evidence.

Recommendation:
The Committee recommends that the query be dropped.

Query 5.4: Delays to complete doctors house at Kasambya Health


Centre III.
The District awarded contract to M/S Kamwebi Finance Investments Ltd
to construct a Doctors house at Kasambya Health Centre III at contract
sum of UGX.75, 079,500. The contract start date was 14th February
2013 and estimated end date was 30th May, 2013.
At the beginning of the Financial Year 2014/2015, UGX.69,219,325 had
been paid, but the project was still incomplete with an outstanding
amount of UGX5,860,175. Inspections carried out on 8th July, 2015
revealed that there were uncompleted works totalling UGX.8,500,500.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.6 Understaffing


The district had an approved staff establishment of 662 positions.
However, only 297 (45%) positions were filled leaving 365 (55%) posts
vacant.

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For observations and recommendations refer to crosscutting issue paragraph 4
of this report.

28. KYANKWANZI DISTRICT

Query 5.1: Lack of Measurement Sheets


It was observed that management paid UGX.46,324,750 to various
individuals for services without certificates of works supported by
measurement sheets issued by a technical expert.

The Accounting Officer explained that they were guided by the Bills of
Quantities in determining the payment.

Observation
The work had been completed in accordance with the contract.

Recommendation:
The Committee upheld the query and recommended that the Engineer
be cautioned.

29. MUKONO DISTRICT LOCAL GOVERNMENT

Query 5.1: Delayed Completion of Civil Works


During the year, the district received UGX 86,171,050 under the School
Facilities Grant (SFG). Documentary review of a sample of projects
implemented and audit inspection carried out in July 2015 revealed
short comings.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

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Query 5.2: Failure to Deduct and Remit 6% Withholding Tax
The district did not remit an amount of UGX.11,365,378.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.3: Unspent Balances


UGX. 49,028,802in respect of the Luwero Rwenzori Development Program
remained unexpended at the end of financial year and was not returned to the
Consolidated Fund as required.

For observations and recommendations refer to crosscutting issue paragraph 9


of this report.

Query 5.4: Lack of a Substantive Secretary to the District Land


Board.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

30. WAKISO DISTRICT

Query 5.1: PAYROLL AUDIT

Query 5.1.1: Over Payment Of Salary


Payroll analysis carried out revealed that 2,617 members of staff who
were supposed to earn salaries amounting to UGX.985,600,079
according to their scale were instead paid UGX.3,260,726,394 resulting
into a salary overpayment of UGX.2,275,126,315.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

117
Query5.1.2: Salary Arrears Paid Without Supporting Records
An amount of UGX.14,600,581 was paid in salary arrears but could not
be verified.

The Committee was informed that recoveries were on going.

For observations and recommendations refer to crosscutting issue paragraph 3.3


of this report.

Query 5.1.3: Non-remittance of Shared Inspection Fees To Lower


Councils.
It was observed that, an inspection fee of UGX 23,068,020 was not
remitted contrary to the law.

Recommendation
The Committee upheld the query.

Query 5.2: Procurement Irregularities

Query 5.2.1: Procurements not in the Procurement Plan


Procurements worth UGX.801,756,780 were made outside the
procurement plan

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.2.1: Items not taken on Charge


A review of Stores records revealed that, except for the medical
equipment and revenue collection receipts, all other items like stationery,
IT consumables and other goods were not taken on charge.

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Recommendation
The Committee upheld the query.

Query5.3: Management of The Luwero Rwenzori Programme


Article 2(d) of the Memorandum of Understanding (MoU) between the
District and the beneficiaries of Luwero Rwenzori Programmee requires
the beneficiaries to submit progress reports and annual accountabilities
to the District at least quarterly and annually. Inspection and
documentation of a sample of the beneficiary groups revealed that all
the groups did not maintain records. Consequently, the groups did not
prepare and submit quarterly progress reports to the District as required
by the Memorandum of Understanding. In addition, there was no
evidence that the district offered technical services to the beneficiaries or
carried out any supervision and monitoring of the implementation of
projects.

Recommendation
The Committee upheld the query

Query 5.4: Road Works Under Periodic Maintenance


For observations and recommendations refer to crosscutting issue paragraph 1.1
of this report.

Query 5.5: Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

Query 5.6: Outstanding Commitments


Audit reported that commitments totaling to UGX.391,417,310 remained
unsettled by the end of the year.

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For observations and recommendations refer to crosscutting issue paragraph 15
of this report.

31. KAMULI DISTRICT

Query 5.1 :Delays to Lay Budget Estimates before the District Council
It was observed that the budget estimates for the financial year 2014/2015
were not laid before District by the 15th day of June 2014 which was in
disregard of the law. It was also noted that UGX35,657,850 was incurred
without the vote on account approval.

A delay in the approval of budget estimates implies that there will be delays in
implementing District activities hence delays in service delivery. The
accounting officer attributed the delay to the Speakers refusal to convene a
meeting to consider the budget.

Recommendation
The Committee:
i. Upheld the Audit Recommendation that the Accounting Officer should
ensure that the budget law is strictly adhered to.
ii. Recommends that the query be dropped.

Query 5.2 : Expenditure

Query 5.2.1: Nugatory Expenditure


It was observed that Court awarded Charles Akoyo (former DEO) a total sum of
UGX 267,788,936 as emoluments accrued from the time he was interdicted to
the date of the payment including interest at Court rate from the date of
interdiction till payment in full.
The costs arose when the court ruled that the interdiction and the subsequent

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dismissal by the district were unlawful. The costs could have been avoided
had management taken due care in ensuring that the dismissal was lawful.
Accordingly the expenditure was nugatory.
The Accounting Officer admitted the shortcoming and attributed it to failure to
follow the logical legal provisions and safeguards.

Committee Recommendation
i. The Committee upheld audit recommendation that the Accounting
Officer should ensure due care in that appropriate decisions making to
avoid such nugatory expenditure.
ii. The committee recommends that the PS Local Government takes an
administrative sanction against the Accounting Officer for failure to
mitigate the loss incurred by Government.

Query 5.2.2: Lack of URA Acknowledgement Receipts


A sum of UGX.13, 336,508 purportedly remitted to URA were not supported by
the official acknowledgement receipts or certificates from the Uganda Revenue
Authority.
For observations and recommendations refer to crosscutting issue paragraph 11
of this report.

Query 5.2.3: Diversion of Funds


The District diverted UGX 25,338,740 of the funds provided under Local
Government Management Service Delivery (LGMSD) Programme to finance the
construction of the administration block to carry out Census activities. This
was after a shortfall arose in funds for census activities. The basis for the
diversion was on the understanding that Uganda Bureau of Statistics (UBOS)
would refund the money used and it was backed up by a letter from the CAO to
UBOS requesting for a top up on census budget for the District. However, by
close of the financial year, the funds had not yet been repaid to the District
accounts by UBOS. The Accounting Officer promised to follow up the matter

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with UBOS.

Diversion of Funds denies service delivery to the intended community.

The Committee was informed that management made a follow up with UBOS
for reimbursement of the funds but the refund has not yet been received. In
November 2016 a UBOS staff visited the district to verify the claim but still
received no feedback.

Given the time taken and uncertainties of refund from UBOS, the District took
care of the affected project that is the Administration Block in the budget
under Local Revenue for FY 2016/17 as they continue to follow up with UBOS.

Observations
The Committee notes that district resources should not have been diverted to
implement UBOS activities.

Recommendation
i. The committee recommends that the Accounting Officer adheres to the
set financial regulations governing the management of public monies
ii. The Committee upholds the audit recommendation that theAccounting
Officer should in future ensure that conditional grants are not diverted
to unintended projects.
iii. The Committee recommends that the Accounting Officer continues to
follow up with UBOS.

Query 5.3: Procurement

Query 5.3.1: Procurement Irregularities


Section 43(4) of the Local Government Public Procurement and Disposal of
Public assets 2006 states that All procurements and disposals shall be

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conducted in such a manner as to maximize competition and achieve value for
money irrespective of the method of procurement used or the nature of the
works, services or supplies to be procured.
However, a review of the entity procurement records for the financial year
2014/15 revealed the following anomalies;
a) Wrongful Elimination of a Bidder

M/S Mulungi Investments Ltd was awarded a contract to Construct a 3


Classroom block at Kavule P/S Namasagali Sub-county at a contract sum of
UGX 64,994,400.
However it was observed that Naminage Investments (U) Ltd was disqualified
for lack of experience as a prime contractor for the last 3 years despite being
the lowest bidder with a bid sum of UGX 55,963,000.
Scrutiny of the bid documents revealed that Kamuli District had awarded the
bidder (Naminage Investment Ltd) contracts of an equivalent magnitude under
the same procurement method and nature of work in the previous year.
The basis for the disqualification was therefore not clear.
Consequently, the District made a loss of UGX 9,031,400. The Accounting
Officer regretted the omission in the obligation in the financial statements.

The Committee was informed that the bidder in question was disqualified
because he had some falsified documents.

Recommendation
The Committee upholds the Audit recommendation that the Accounting Officer
should ensure that the procurement regulations are adhered to so as to ensure
value for money.

b). Absence of Contract Managers and Implementation Plans


Regulation 119(2) of Local Government PPDA 2006, requires a user department
to nominate contract managers and ensure that contract implementation plans

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are in place.
However, it was observed that user departments did not appoint contract
managers and did not prepare contract implementation plans. As a result
contractors were not closely monitored leading to unsatisfactory works in some
cases like the construction of a 3 classroom block at Kavule p/swhich had the
floor peeling off 2 times from the time of contract completion and some
contracts not being implemented.

The Committee was informed that the documents in question were there but
they were misfiled.

Recommendations
The Committee upheld the audit advisory that the Accounting Officer ensures
that user departments appoint contract supervisors and ensure contract
implementation plans are prepared as required by the procurement regulations
The Accounting officer indicated that he had taken note of the
recommendation.

Query 5.5: Understaffing


The District has an approved staffing structure of 371 employees. However,
out of the 371 approved positions only 241 are filled leaving a balance of 131
vacant posts.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.6: Audit Inspection of Kamuli Hospital

Query 5.6.1: Redundant X-ray Equipment.

For observations and recommendations refer to crosscutting issue paragraph 5

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of this report.

Query 5.6.2: Improper Assets Register

The assets register presented for examination lacked information pertaining to;
costs, location and dates of acquisition of the assets. Absence of the above
information impairs replacement planning, confirmation of existence of the
equipment and capital budgeting. Some of the assets that lack the above
details include; operating beds for the eye clinic, Refrigerators, computers and
vehicles.

For observations and recommendations refer to crosscutting issue paragraph 13


of this report.

Query 5.6.3: Failure to dispose of obsolete assets

Vehicles have been lying in the compound reportedly for more than 5 years
without being disposed off.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

32. NAMAYINGO DISTRICT


Query 5.1: Over Payment of Salaries
Payroll analysis carried out revealed that 10 members of staff who were
supposed to earn salaries amounting to UGX.4,784,554 according to their
scale were instead paid UGX.9,321,558 resulting into a salary overpayment of
UGX.4,537,004.
For observations and recommendations refer to crosscutting issue paragraph 3.1
of this report.

Query 5.2: Service Delivery

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Query 5.2.1: Water Sector

a. Poor Water Coverage and Non Functioning Water Sources


According to the District Development Plan and sector Objectives for the
financial year 2014/15 the district was to increase water coverage to 77%.
A review of the performance reports water coverage in the district was 34%
while 21% of the water services were non-functional.
The low water coverage exposes the communities to unsafe water hence a risk
of water borne diseases.
The Accounting Officer attributed the shortcomings to low funding; but
promised to lobby for more funding.
The Committee was informed that the District managed to lobby for UGX. 1
billion from Development Partners and that currently piped water is being
installed in the district
The Accounting Officer submitted documentary evidence.

Observation
The Committee was satisfied with the evidence.

Recommendation
The Committee recommends that the query be dropped.

b. Lack of Water Quality Surveillance


Section 4.14 of the water and sanitation sector guidelines 2009/2010 requires
Local Governments to carry out measurement for water quality of newly
constructed and existing water sources.
However, out of the 429 old water sources, only 50 were tested for water
quality by National Water and Sewerage Corporation. This represents 11%.
Failure to test water consumed by the community, subjects them to the risk of
taking unsafe water which may lead to contracting of waterborne diseases.
The Accounting Officer attributed the lack of water testing equipment to

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financial constraints.
The Committee was informed that a water testing kit has now been bought and
more will be bought from the budget of FY 2016/17.

Observation
The Committee was satisfied with the explanation.

Recommendation
The committee recommends that the query be dropped.

Query 5.3 Health Services

Audit reported poor infrastructure in the Health facilities in the district.

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

Query 5.4: Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

Query 5.5: Review of Internal Audit

Query 5.5.1: Internal Audit Function


A review of Internal Audit function revealed that the department was
understaffed with 3 out of the approved 5 positions filled.
In light of the above, the internal audit departments role of providing internal
oversight to management may be affected. In her response, the Accounting
Officer indicated that she sought clearance from Ministry of Public Service to
recruit a Senior Internal Auditor in 2016/17 FY to beef up the staffing position
in the unit. This will enable the unit to have 4 out of 5 staff in the

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establishment.

Observation
According to the new public service structure the query does not stand.

Recommendation
The committee recommends that the query be dropped.

33. IGANGA DISTRICT

Query 5.1: Unacknowledged Payments


It was observed that UGX. 24,500,000 in respect of transfers to lower units
and payments for supplies and services lacked acknowledgement receipts.
Consequently, audit was unable to confirm that the funds reached the
beneficiaries intended.

Management acknowledged the anomaly and attributed it to the Electronic


funds payment system where payees become reluctant to issue receipts once
they have received the money.

The committee was informed that the missing receipts had been for UMEME
electricity payments done through Electronic Fund Transfer by Iganga
Hospital. The district has since shifted to YAKA for easy acquisition of
electricity receipts. Documentary evidence was presented to the committee

Observation
The Committee was satisfied with the explanation.

Recommendation
The Committee recommends that the query be dropped.

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Query 5.2 Asset Management

For observations and recommendations refer to crosscutting issue paragraph 13


of this report.

Query 5.2.1: Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

Query 5.2.2: Encroachment on Forest Reserve


It was observed that, Nabukolyo Local Forest Reserve, a permanent wetland
with 16 Hectares had been encroached on by Rice growers while 32 hectares of
Wakatanga Local Forest Reserve had been encroached on by Maize farmers.

The Accounting Officer explained that the district had joined hands with
National Forestry Authority to handle the issue.

The Committee was informed that:


I. The district forest officer had embarked on sending notices to
encroachers and taking police action on them;
II. Serious tree farmers had been issued with forest permits; and
III. Community sensitization meetings were held.

Observation
The Committee acknowledged the efforts made by the accounting officer to
fight encroachers on the forest reserves.

Recommendation
The Committee upheld the query because the efforts free the forests of

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encroachers is still on going.

Query 5.2.3 Failure to Maintain Vehicle Movement Registers


The District does maintain log books to record vehicle movement. In the
absence of vehicle movement log books, audit could not link fuel consumption
to service delivery.

For observations and recommendations refer to crosscutting issue paragraph 14


of this report.

Query 5.3: Understaffing


The district has an approved structure of 1,091 staff. However, out of the
approved staff of 1091, only 774 (71%) were filled leaving 317 (29%) positions
vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.4: Service Delivery

Query 5.4.1: Education Sector

a) Standards of Education in Primary Schools


For observations and recommendations refer to crosscutting issue paragraph 2
of this report.

Query 5.4.2: Inspection of Health Centers and the Hospital

The standard requirements of a health center were not met.

For observations and recommendations refer to crosscutting issue paragraph 5

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of this report.

Query 5.5: Inadequate Internal Audit Reviews


Internal audit did not carry out any audit of procurement procedures contrary
to the regulation. Failure to audit procurement procedures may lead to shoddy
works and substandard goods being supplied.

The Accounting Officer attributed this to understaffing and huge volume of


work in the unit.

The Committee was informed that effective this FY the Internal Audit would
endeavor to review procurement procedures every quarter given that it is a
requirement of the PFMA, 2015.

Observation
The Committee noted that the Accounting Officer did not have any supporting
document.

Recommendation
The committee recommends that the query be upheld.

34. LUUKA DISTRICT

Query 5.1: Expenditure

Query 5.1.1: Incompletely Vouched Expenditure


Audit reported that expenditures amounting to UGX. 2,841,000 lacked
supporting documents therefore he could not confirm that the funds were used
for the intended purposes.

The Accounting Officer informed the Committee that he submitted various

131
payment vouchers but the receipts were not seen by auditors. The affected
accountabilities were for people who went for capacity building but the
institutions did not give them receipts on time.

He submitted the receipts to the Committee.

Observations
The Committee was not satisfied with accountability and concludes that the
documents are forged.

Recommendations
The Committee rejects the accountability and recommends that:
i. The query be upheld;
ii. Accounting Officer to recovers the UGX 2,841,000 from the Human
Resource Officer for negligence, the Accountant, the CFO and the
then Accounting Officer.

Query 5.3: Procurement


Query 5.2.1: Splitting Procurements
Audit observed that the contract of UGX. 99,857,166 for renovation of Kiyunga
HC IV qualified for open bidding but was split and awarded through selective
bidding in an effort to reduce on the level of competition.

The Accounting Officer explained that the decision was made because the
works had to be completed in one month because the Financial Year was
coming to an end.

The Committee however found that the contract spilled over to the next
financial year.

The Committee upheld the advice of the Auditor General to avoid splitting of

132
procurements in future and to ensure compliance with the procurement law.

It was observed that projects worth UGX 24,221,270 lacked performance


security.
Absence of performance security exposed the district to risk of losses in the
event that the contractors failed to effectively perform contract obligations.

The Accounting Officer explained that other remedial actions had been taken
including deduction of 10% from the contractors first payment to compensate
for the performance security.

Recommendations
The Committee upholds the recommendation of the Auditor General to always
ensure that contractors fulfill their contract obligations.

Query 5.4: Budget Performance

Query 5.5.1: Shortfall in Government Grants


Audit observed that out of the budgeted Government grant of UGX.
16,448,641,000 only UGX.16,195,937,164 was released, leading to a shortfall
of UGX. 252,703,836.

Observation
The District needs to budget for both grants from the Central Government and
Locally generated revenue.

The Committee was informed that the district collects UGX 80,000,000
annually.

Recommendations
The Committee recommends that:

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The MoFPED should always release all the funds as appropriated by
Parliament.

Query 5.5: Others

Query 5.5.1: Evaluation of Internal Audit


Audit found that the department only had 2 of the 5 approved posts filled.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.6: Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

Query 5.7: Non Maintenance of Vote Books


Audit found that all the departments did not properly maintain vote books
contrary to the regulation. This weakens control over expenditure.

The Committee was informed that it is now a practice that every vote controller
initials in the vote book to ascertain the availability and movement of funds.

Observation
The district was not maintaining the vote books as required by the regulations.

Recommendations
The Committee recommends that the District maintains a vote book for every
department to ensure proper control of expenditure.

Query 5.8: Service Delivery

134
Query 5.8.1: Education Sector

For observations and recommendations refer to crosscutting issue paragraph 2


of this report.

Query 5.8.2 Water Sector


Inspection of Ikumbya Borehole at Bunafu Trading Center revealed that the
borehole was not functional.

Inspection of Busiiro Shallow well Waibuga Sub County revealed that the water
quality is poor and it is dirty.

The Accounting Officer attributed the poor quality of water to the galvanized
pipes that were used.

The Committee was informed that Bunafu borehole was repaired by replacing
the pump bucket and it is currently functional.

For Busiiro Shallow well the contractor has just finished drilling another
shallow well in the same area.

Observation
The Committee was satisfied with the explanation.

Recommendation
The Committee recommended that the query be dropped.

Query 5.8.3: Health Sector

Kiyunga Health Center IV


The renovation of General ward at Kiyunga HC IV was at a cost of UGX

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42,050,716 and the contract completion date was June 2015.
The audit inspection revealed the following shortcomings:
The civil works had not been completed by the time of inspections in
August 2015
Medical equipment which were in the general ward before renovation
were dumped in the compound
There is no running water in the ward.
The Committee was informed that works were done in accordance with BOQs.

Water is at reservoir but requested for funds to move it close.

The three companies that were contracted to do different aspects of work at the
health center worked at different rates and the work spilled over.

The current status is that the project is complete and functional.

Audit found that objective of finishing work in Financial Year not met.

Observation
The Committee observed that:
i. Procurement Officer together with Engineer lied before Committee and
presented false docs. Admitted rendering query on Splitting
Procurement Standing.
ii. They paid Contractor all the contract money without completion
certificate issued. It is irregular defaulted in both supervising and
procuring contractors
iii. The project manager should have supervised to ensure that contract is
completed.

Recommendation
For observations and recommendations refer to crosscutting issue paragraph 1.1

136
of this report.

35. JINJA DISTRICT

Query 5.1: Expenditure

Query 5.1.1: Under Delivery of Drugs by National Medical Stores


For observations and recommendations refer to crosscutting issue paragraph 5
of this report.

Query 5.2.1 Non Delivery of Medical supplies


Audit observed that an amount of UGX. 906,061,920 had been allocated to the
District for supply of medicines by National Medical Stores. However, it was
observed that only UGX. 854,579,967 worth of drugs was supplied. The
balance of UGX. 84,960,928 could not be accounted for.

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

Query 5.2: Overpayment of Salary


The district paid an exess of UGX. 6,660,006 in respect of salary contrary to
the Standing Orders.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.3: Fixed Assets Management


For observations and recommendations refer to crosscutting issue paragraph 13
of this report.

Query 5.3.1: Lack of Land Titles

137
For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query 5.4: Staffing Gaps


The district has an approved staff structure of 419 posts. It was however
observed that out of the 419 approved establishment, only 175 positions are
filled leaving a gap of 244 posts vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.5: Status of Project Implementation

Query 5.5.1: Inspections of Health Facilities

An inspection of selected health centers revealed that the standards are not
met.

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

Query 5.5.2: Education Sector


a) Assessment of the Minimum Recommended Infrastructure in
Primary Schools.

For observations and recommendations refer to crosscutting issue paragraph 2


of this report.

36. NAMUTUMBA DISTRICT


Query 5.1: Doubtful Tax Remittance

138
Taxes amounting to UGX 6,924,172 lacked acknowledged receipts by
Uganda Revenue Authority (URA).

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.2: Procurement

Query 5.2.1: Force Account

It was observed that by the District was awarded a contract for the hire
of road equipment under force account mechanism at a contract sum of
UGX 25,072,231 using direct procurement.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.3: Fixed Assets Management

Query 5.3.1: Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

Query 5.4: Staffing Gaps

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.4: Service Delivery

Query 5.5.1: Education Sector

139
Analysis of a sample of 10 schools revealed that the required minimum
education standards have not be attained.

For observations and recommendations refer to crosscutting issue paragraph 2


of this report.

5.5.2 Health Sector


Inspections of 8 Health Centers within the district revealed deviations
from the standards as set out by the Ministry of Health.

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

37. BUGIRI DISTRICT

Query 5.1: Poor Contracts Management


Sample projects worth UGX: 490,392,030 did not have progress reports
and implementation plans on file during the operationalization of
Contracts.

Observation
Contracts were skewed due to conflict of interest.

Recommendation
The committee upheld the query

Query 5.2: Non-compliance with the Statutory Obligation


UGX: 1,104,175 in respect of withholding Tax (WHT) deductions lacked
URA acknowledgement receipts.

140
For observations and recommendations refer to crosscutting issue paragraph 11
of this report.

38. KALIRO DISTRICT

Query 5.1: Non Disposal of Assets


The district has vehicles that are old, non-functional and due for
boarding offhowever, this was slowed down by lack of log books which
had been retained by Kamuli district.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.2: Lack of Land Titles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query 5.3: Assessment of the District Internal Audit Unit


The Accounting Officer informed the committee that there were two (2)
staffs in the section. However, customization had been requested from
the ministry of Public Service

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

39. MAYUGE DISTRICT

Budget Performance

Query 5.1.1: Inadequate funding from Treasury

141
The District budgeted to receive UGX 30,124,266,000 from treasury
during the year under review. However, only an amount UGX
21,153,157,744 was released leading to a short fall of UGX
8,971,108,256.

Observation
The Accounting Officer provided satisfactory evidence.

Recommendation
The committee recommends that the query be dropped.

Query 5.2: Fixed Asset management

Query 5.2.1: Lack of Land Titles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query 5.3: Human Resources

Query 5.3.1: Inadequate staffing of Internal Audit Unit


For observations and recommendations refer to crosscutting issue paragraph 4
of this report.

Query 5.4: HEALTH

Query 5.4.1: District Health Service Delivery


Inspection of a number Health Centres revealed that most of the basic
minimum standards had not been met.

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

142
Query 5.4.3: Non Delivery of Medical Supplies
UGX.510, 600,855 had been allocated to the District for supply of
medicines by the National Medical Stores. However, only UGX
391,469,967 worth of drugs was supplied. The balance of UGX
119,830,582 was not supplied.

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

Query 5.5: Erroneous payments amounting to UGX 7,684,723


Audit noted that erroneous payments amounting to UGX 1,807,330 and
duplicate payments amounting to UGX 5,877,393 could not be verified
giving a total of UGX 7,684,723 outstanding.

Management attributed this variances to payroll errors which include;


erroneous less payments the previous month, missed salaries, errors on
the record of the payroll, unapplied EFTS, system errors where basic pay
was not reflected on the system.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

40. BUYENDE DISTRICT

Query 5.1: Supplementary Budget


It was observed that, the budget was revised from UGX 14,564,405,571
to UGX 16, 052,290,612 representing an increase of UGX
1,487,885,041.

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However, there was no evidence that the supplementary was approved by
the District Council. The Accounting Officer had indicated that approval
was obtained but no minutes of council were presented for audit
verification.
The Accounting Officer presented the approval.

Observation
The committee was satisfied.

Recommendation
The Committee recommends that the query be dropped.

Query 5.2: Salary Paid to Retired Staff

Audit observed that two officers received a total of UGX 11,013,969 post
the mandatory retirement age of 60.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.3: Lack of Contract Register


A contracts register was not maintained for all procurements of goods
and services during the financial year.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.4: Inadequate Revenue Register


It was noted that the Town Council did not maintain complete Revenue
Registers for revenue.

144
For observations and recommendations refer to crosscutting issue paragraph 10
of this report.

Query 5.5: Lack of Land Titles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query 5.6: Staffing


The District has an approved establishment structure of 1,596
employees. However, out of the 1596 approved posts only 1,333
positions have been filled resulting in 232 vacant positions representing
50.8% staffing gap.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.7: Service Delivery

Query 5.7.1: District Health Service Delivery


Inspection of the Health Centres revealed that most of the basic
minimum standards were not met.

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

Query 5.7.2: Education Service Delivery

Query 5.7.3: Inadequate standards in Primary Schools

For observations and recommendations refer to crosscutting issue paragraph 2


of this report.

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41. KAYUNGA DISTRICT

Query 5.1: Pay Roll Audit

Query 5.1.1: Overpayment of Salary


Payroll analysis carried out revealed that 421 members of staff who were
supposed to earn salaries amounting to UGX.140,909,923 according to their
scale were instead paid UGX. 191,151,751 resulting into a salary overpayment
of UGX.50,214,828.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.1.2: Staffing Gaps


The District has an approved establishment structure of 620 employees.
However, only 316 (50.97%) posts were filled leaving a staffing gap of 304
(49.03%) employees.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.2: Lack of Land Title

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

Query 5.3: Inspection of Civil Works


The following civil works were found incomplete at the time of audit:
Staff House with 2 stance pitlatrine in Bungoma Primary School and Staff
House with Nsiima Church of Uganda Primary School.

146
For observations and recommendations refer to crosscutting issue paragraph 1.1
of this report.

42. BULISA DISTRICT

Query 5.1: Unaccounted for Advances


A sum of UGX 19,705,820 remained unaccounted for by the time of
audit.

Observation
The Committee was satisfied with accountability of UGX. 15,147,820
being payment of UGX. 14,807,820 to Shataman Contractor Limited and
UGX. 340,000 to Mirimo Godfrey.

Recommendation
The Committee recommends that:
i. Query on UGX. 15,147,820 be dropped.
ii. The balance of UGX. 4,558,000 be recovered.

Query 5.2: Long Outstanding Debtors


Review of the balance sheet revealed that Council had outstanding
advances amounting to UGX 86,406,128 as at the end of the financial
year.

The Committee was informed that funds were erroneously sent to 3


schools and the schools were asked to refund the money as follows:
Mukitale Foundation UGX. 25,092,455
Bugungu UGX. 16,716,690
Biiso UGX. 9,828,409

147
The committee was informed that the other schools were refunding the
money in a phased manner, however Mukitale foundation was not.

Observation
The Committee received a copy of a letter from Mukitale Development
Foundation Senior Secondary Schooladdressed to the CAO of Bulisa
District undertaking to recover the money in three installments.

Recommendation
The Committee recommends that:
i. Bugungu and Biiso should enter into understanding with the
District with a clear schedule as to when to complete payment.
ii. Mukitale Foundation refunds the whole amount of UGX
25,092,455 to the district within this FY.

Query 5.3: Failure to Witness Bid Opening


For 12 contracts worth UGX.444, 617,691, the contracts committee
failed to witness bid opening and sign the record of bid opening.

Failure of contracts committee to witness bid opening compromises


transparency and accountability within the procurement system.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.4.1: Unplanned Procurements

It was observed that although a procurement plan was in place,


procurements worth UGX.450,290,160 had not been included in the
procurement plan for the year under review.

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Conducting procurements outside the procurement plan may create
budget overruns resulting into accumulation of domestic arrears.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.4.2: Failure to Sign Ethical Code of Conduct


It was observed that all sampled contracts worth UGX 1,538,582,597 did
not have signed code of ethical conduct of public officers by members of
evaluation committee.
Failure to sign ethical code of conduct indicates lack of commitment to
ethical principles and may lead to conflict of interest.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.5: Routine Mechanized Road Maintenance of Kihungya


Nyalwera (1.8km).
The works started in January 2015 and completed on 30th March 2015
at a total cost of UGX 18,000,000. The following issues were noted
during inspections;
The planned work was 1.8km but only 1.5km was covered.
Between point 0.6km and 1km, the road was not graded and the culverts
were not installed as per the cost estimates/ BOQs.

The Road had become impassable by the time of audit inspection.


The Committee was informed that the road was swampy at the time of
audit and the machines could not manage to work in that state. However
when the area dried the works continued and was finished.

149
Recommendation
The Committee recommends that the query be dropped.

Query 5.6 Delayed disposal of district assets


A number of district assets especially vehicles and motorcycles were
grounded at the District police offices and Buliisa Health centre IV.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.7 Custody of stores and the other assets


It was observed that the District does not have store nor is there a store
keeper to manage stores.

The Accounting Officer explained that in the financial year (2015/16) the
district plans to embark on the construction of the 1st phase of the
district stores and for the recruitment of the store keeper, permission
had to be sought from the Ministry of Public Service.

The Committee upheld the recommendations of the Auditor General that


the Accounting Officer should create room for a store and to ensure that
a store keeper is recruited and stores records are maintained.

43. KABOROLE DISTRICT

Query 5.1: Lack of Information Communication (ICT) Policy

For observations and recommendations refer to crosscutting issue paragraph 7


of this report.

150
44. KAMWENGE DISTRICT

Query 5.1: Unaccounted for Funds


An expenditure of UGX 2,730,000 lacked supporting documents at the
time of audit.
The Accounting Officer reported to the Committee that the funds were
not satisfactorily accounted for and that deductions from the officer start
in November 2016.

He submitted the unsatisfactory accountabilities to the Committee.

Observation
The Committee found that the Accounting Officer certified the faulty
expenditure.
The Committee observes that it was careless of the Accounting Officer to
certify a document he does not agree with.

Recommendation
The Committee directed that the Accounting Officer recovers the money
from himself with immediate effect amounting UGX 2,730,000,

Query 5.2: Lack of Contracts Registers


There were no Contracts Registers maintained to track status of work
and payments.

The Accounting Officer explained that the Contractor Registers were in


place but they were not provided for audit.

The Committee was presented with a contracts register.

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Observation
The Committee observes that the Contracts Register still needs
reconciliation because it indicates that some contracts still have balances
yet they do not.

Recommendation
The Accounting Officer was directed to reconcile the register

Query 5.3: Community Driven Development (CDD)

Diversion of CDD work plan for the community


It was observed that out of the CDD groups that were sampled out for
inspection, one group called Rwenkubebe Bagurisi Tukore located in
Nyabbani Sub-County received funding worth UGX.2,500,000 for
procuring of harvesting gears and jerry cans for parking.

However, the funds were instead used for purchasing goats thus
diversion of funds.

This was attributed to lack of close supervision.


Unauthorized diversion of funds to unplanned activities negatively affects
proper implementation of planned activities.

The Accounting Officer responded that the group changed its


procurement plan at community level and did not inform the district.

The Committee was informed that the changes were made at the
community level and that the goats are to be branded in the subsequent
work plan.

152
Observations
The Committee observed that:
i. For the Accounting Officer to plan on branding the goats is an
endorsement of the anomaly.
ii. The District should have revised work plan.
iii. Instead of reprimanding the community that erred they were being
rewarded for the misbehavior.

Recommendation
The Committee recommends that the matter be investigated with a view
to prosecution.

Query 5.4: Payroll


It was observed that two of the district staff received double payments
totaling to UGX.823,821.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.5: Understaffing


The district has an approved structure of 150 staff. However, out of the
150 approved positions, only 88 posts were filled leaving 41 posts vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.6: Lack of Land Titles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

153
Query 5.7: Lack of Information Communication (ICT) Policy
For observations and recommendations refer to crosscutting issue paragraph 7
of this report.

45. KIRYANDONGO DISTRICT

Query 5.1: Funds not Accounted for


A sum of UGX 9,839,000 remained unaccounted for by the time of audit.

The Committee was informed that some of the accountabilities were


made and the evidence comprising of fuel receipts and other
accountabilities were submitted. For those that have not yet been made,
the Accounting Officer has written to officers to account for the funds. He
has also put in place a policy of not advancing any funds to an officer
who still has an outstanding advance.

Observation
The Committee observed that:
i. Accountability should be done within one month of receipt of the
funds.
ii. Management and staff have exuded laxity on matters of
accountability of advances.

Recommendation
The Committee recommends that:
i. The accountability being late, it be rejected.
ii. The Accounting officer recovers the money amounting UGX
9,839,000.

Query 5.2: Outstanding Utility Bills for Kiryandongo Hospital


The hospital had outstanding electricity bill amounting to

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UGX.34,444,192. The hospital is at a risk of power disconnection.
The Accounting Officer attributed the outstanding bill to the the
expansion of the Hospital and said that efforts are being made by
management to have the Bills paid.

The Accounting Officer confirmed that in FY 2014/2015 there was an


outstanding utility bill for Electricity for Kiryandongo Hospital of shs.
34,444,192/= as at 30th/06/2015.

The District is paying the outstanding utility bills in installments of


3,000,000/= per quarter.

The Accounting Officer however noted that the utility bills became higher
after the renovations because new equipment was brought in and more
facilities like the New OPD and emergency units opened. This creates
more avenues for power consumption and as a result the PAF Non wage
which is released on a quarterly basis of UGX. 35,174,578/= is not
adequate to meet all the operational expenses of the hospital at the
moment.

The bill has however shot up to 100million arising from the fact tat the
renovations used hospital power. The District is in the process of sorting
out the problem with the Ministry of Health MOH.

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

Query 5.3: Absconded Staff not Deleted From Payroll


UGX.7,009,394 was lost as a result of staff who continued to access the
payroll despite their abscondment from duty.

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For observations and recommendations refer to crosscutting issue paragraph 3.1
of this report.

46. KYENJONJO DISTRICT

Query 5.1: Funds Unaccounted for Funds


A sum of UGX 12,735,000 remained unaccounted for at the time of
audit.

The Committee was presented with accountabilities.

Observation:
The committee was not satisfied with the accountability provided by the
Accounting Officer.

Recommendation:
The Committee recommends that the Accounting Officer recovers the
sum of UGX 12,735,000 that was not accounted for.

Query 5.2: Non Compliance with Statutory Obligations

Non-remittance of Withholding Tax


A sum of UGX. 4,090,173 remained unaccounted for at the time of audit.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.3: Un-reconciled Revenue Returns with Bankings


Audit observed that out of the UGX. 42,952,927 consisting of Local
Revenue returns from Sub counties, only 39,813,829 was reflected in the

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bank accounts by the district, leaving a balance of UGX 3139,098
outstanding.

Observation:
The Accounting Officer admitted the shortcoming and pledged to correct
it.

Recommendations:
The Accounting officer was cautioned and advised to keep reconciled
books at all times.

Query 5.4: Understaffing


The district has an approved structure of 1,968 positions, but has only
1,624 positions filled, leaving 344 positions vacant and representing 17%
of the establishment.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.5: Service Delivery

Construction of an Outpatient Department ward at Kyankaramata


Health Center.
The start and completion dates for the civil works at the health Centre
was in January 2014 to 26th August.

A sum of UGX. 11,658,900 was queried, the audit inspection conducted


over the incomplete works.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

157
Query 5.6: Construction of 15 market stalls at Kyarusozi
A sum of UGX. 2,925,000 was queried arising from the use of iron sheets
of gauge 30 instead of gauge 28 that was recommended.

Observation
This was a sub standard service offered to the people of Kyenjojo.

Recommendations
i. Committee recommends that the Accounting Officer recovers the
sum of UGX 2,925,000 from the responsible officer
ii. Committee recommends that the Accounting Officer reprimands
the responsible officer for providing sub-standard service to the
people of Kyenjojo.

47. HOIMA DISTRICT

Query 5.1: Funds not Accounted For

Unaccounted for Administrative Advances:


Funds totaling to UGX. 18,820,850 unaccounted for at the time of audit.

The Accounting Officer presented accountabilities to the Committee.

Observations
The committee was not satisfied with the explanation made by the
accounting officer.

Recommendation
The committee recommends that accounting officer recovers all the funds

158
amounting UGX 18,820,850.

Query 5.2: Missing Vouchers


Voucher No. 2 of 2nd October, 2015 of UGX 6,500,000 was not presented
for verification by the auditors

Observations
The committee observed that the voucher was missing at the time of
audit and at the time of presentation to the committee a period of over
one year.

Recommendations
The committee recommends that accounting officer recovers funds
amounting UGX 6,500,000 immediately.

Query 5.3 Under Collection Of Local Revenue:


Under collected revenue amounting to UGX. 34,394,100 arising from the
un remitted funds from the market revenue contractors;

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.4: Understaffing:


A staffing level of 50% was realised in the district at the time of audit.
The Accounting Officer explained that, the situation changed in
2015/2016 when the recruited some staff, putting now the staffing level
at 67%.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

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Query 5.5: Incomplete Works

Query 5.5.1 Construction of a 3 stance lined pit latrine at Buhimba


Works on the construction of a pit latrine at Buhimba sub county at a
contract price of UGX. 10,000,000/=. A field inspection revealed that
items worth 1,585,000 had not been supplied

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.5.2 Periodic maintenance of Nyamirima-Kakindo Road


The Audit revealed incomplete periodic maintenance road works on
Nyamirima-Kakindo Road, whose cost amounted to UGX.56, 084,000;
The Accounting Officer informed the Committee that the road had been
completed and the committee was shown the pictures of the road which
confirmed the completion of the road works.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.5.3: Spot Improvement of Munteme-Kajoga Road


The audit observed incomplete works for the periodic maintenance
contract for road works on Munteme-Kajoga Road whose total cost
amounted to UGX.15,432,000;
The Accounting Officer informed the Committee that the road had been
completed and the committee was shown the pictures of the road which
confirmed the completion of the road works.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

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48. BUNDIBUGYO DISTRICT

Query 5.1: Funds not Accounted For

Query 5.1.1: Missing Vouchers


Funds totaling to a sum of UGX. 230,375,671/= were not availed for
audit.
The Accounting Officer was not able to explain this and so was advised to
appear with one Mugamba the former Accounting Officer, now the
Accounting Officer of Katakwi district, in order to clarify on the said
vouchers.

Observation
The committee noted there was no accountability presented to the
committee and all queries were referred to the former accounting officer.
The committee was not able to meet the former accounting officer as he
never turned up when he was summoned.
The committee observed that there was a general intrigue amongst staff

Recommendation
The committee recommends that all the funds be recovered from the
officers

Query 5.1.2: Unaccounted for funds:


Funds totaling to a sum of UGX 146,338,827 remained unaccounted for
at the time of audit.

Observation
There was no accountability for the entire amount of UGX. 146,338, 827

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Recommendation
The Committee recommends that the Accounting Officer recovers the
entire amount totaling UGX. 146, 388,827 from the two officers; one
Mwesigye the former acting Chief Finance Officer and another Mugamba
Eria the former CAO.

Query 5.2: Local Revenue Shortfalls


A sum of 241,046,338/= in revenue shortfall was noted in the District. For
observations and recommendations refer to crosscutting issue paragraph 10 of
this report.

Query 5.3: Overpaid Salaries


A sum of UGX. 72,555,412 was overpaid to the staff of the district

Observations
The Accounting Officer did not provide satisfactory explanation to the
Committee.

Recommendations
The Committee recommends that the Accounting Officer recovers the
said UGX. 72,555,412 with immediate effect.

Query 5.4 Salary Arrears:


A sum of shs.485, 589,855/= in salary arrears was not paid to the staff.
The Accounting Officer explained that the money was to be paid to
several teachers, but so far 334, 000,000 has been paid.

For observations and recommendations refer to crosscutting issue paragraph 3.3


of this report.

162
Query 5.5: Irregular Contract Variation
The contract for the construction of Mirami Sub County was varied from
UGX.123,806, 400 to UGX.194,450,332 representing 57% increase in
the original price, without the approval of PPDA.
The Accounting Officer was unable to respond to the query satisfactorily
in the absence of the procurement Officer.

Observations
The committee noted that this was a violation of the PPDA law.

Recommendations
The committee upholds the auditor generals recommendation

Query 5.6: Lack of Goods Received Notes


Procurements amounting to UGX 14,264,000 lacked goods received
notes.
The Accounting Officer admitted the shortcoming and explained that all
cases were micro procurements below the threshold

Observations
The committee was not satisfied with the explanation offered by the
Accounting Officer

Recommendations:
The committee upholds the query.

Query 5.7: Overpaid salaries


There was up to UGX. 72,555,412/= in terms of overpayment of salary.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

163
Query 5.8: Salary Arrears
A sum of UGX. 485,589,855 remained as outstanding salary arrears
For observations and recommendations refer to crosscutting issue paragraph 3.3
of this report.

Query 5.9: Irregular Contract Variation


The committee was informed that a variation amounting to 57% of the
original contract was made without the approval of PPDA, thus raising a
contract from UGX. 123,806,400 to UGX.194,450,332.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

49.MASINDI DISTRICT

Query 5.1: Follow up of unrecovered Double Paid Salary


In the Audit Report of financial year ended 30th June 2014, a double
payment of UGX 71,256,267 was reported in the month of April 2014.
This Double payment caused a financial loss to the entity and it has not
been recovered to date.

The Accounting Officer informed the committee that out of the UGX.
164,614,967 that was paid in error, Shs 131,080,000 has so far been
recovered from staff as at 31st July 2016 and hope to complete the
recovery by 30th September 2016.

He submitted evidence of recovery.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

164
Query 5.2: Under Staffing
The district has an approved structure of 145 staff, However out of the
approved posts only 85 positions had been filled leaving a staffing gap of
60 positions representing 41% understaffing.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.3: Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

50. KIBAALE DISTRICT LOCAL GOVERNMENT:


Query 5.1: Absence of Revenue Register
The Accounting Officer explained to the committee that the district has
addressed the issue and presented the register for verification by the
committee.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.2: Absence of Salaries establishment registers:


The Accounting Officer explained to the committee that the district has
addressed the issue and presented the salaries establishment register for
verification by the committee.

Observation
The Register is now maintained by the district and is satisfactory.

165
Recommendation
The committee advised the Accounting Officer to continue maintaining
the register, and dropped the query.

Query 5.3: Understaffing

The district has an approved structure of 3,724 staff. Out of the 3,724
approved posts, only 2,868 posts were filled, leaving a balance of 875
posts vacant, representing 39% of the approved posts.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

51. KYEGEGGWA DISTRICT

Query 5.1: Unaccounted for funds:


Funds amounting to 18,657,100/= was dissipated to staff administrative
advances. The Accounting Officer provided documents for accountability

The Accounting Officer submitted accountabilities to the Committee.

Observation:
Documents for 2,583,000/= were doubtful and thus the funds were not
satisfactorily accounted for.

Recommendations
The Accounting Officer was advised to recover the sum of UGX.
2,583,000.

Query 5.2: Missing Vouchers


The committee was informed that sum of UGX 2,324,028 could not be

166
audited and therefore accounted for as there missing vouchers.

The Accounting Officer presented the vouchers and other relevant


documents.

Observations
The committee was satisfied with the vouchers presented.

Recommendations
The Committee recommends that the query be dropped

Query 5.3: Idle Anesthetic Machine


The district received an anaestheric machineas a donation from BTC on
21/10/2014. The machine uses halothane, isoflurane, oxygen and
sevoflurane which NMS does not supply.

The Committee was informed that the machine is now lying idle at
hospital.
The Accounting Officer explained that he had since written to the
Minister of Health seeking for the Ministers intervention.

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

Query 5.4: Understaffing


Out of the district approved staff structure of 241, only 184 positions
were filled leaving 57 positions vacant representing 24% of the approved
structure.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

167
52. KASESE DISTRICT

Query 5.1: Incomplete structure at Kahokya Health Centre II


The Committee was informed that there was an abandoned construction
work at Nyamirami Health Centre IV at Kahokya.
The Accounting Officer informed the Committee that the works in the
staff house at Nyamirami Health Centre IV were now complete and that it
is was now under use. The Committee tasked the staff of the Auditor
General at that region to ascertain the works at the Health Centre.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.2: Uninstalled Maize Mills


The committee was informed that the district contracted Mupala agency
group to supply and install six maize mills in three SCs, two divisions
and 1 town council at a contract sum of UGX 113, 704, 800.

Observation
The committee noted the mills could not be installed pending the needs
assessment.

Recommendation
The committee recommends that the query be dropped

Query 5.3: Irregular Levy Of 3% Development Tax


The Committee was informed of a tax of 3% levied by the district on all
persons who win tenders to provide services to the district.

For observations and recommendations refer to crosscutting issue paragraph 8


of this report.

168
Query 5.4: Failure to Raise Demand Notes
The Committee was informed that the administration failed to raise
demand notes for UGX. 167,284,497.
The Accounting Officer explained that efforts had been made to recover
the said monies.

Observation
The Committee received evidence to show the efforts taken however
whereas the committee was satisfied with the accountability for UGX.
25,407.146, a sum of UGX. 135,481,841 remained unaccounted for.

Recommendation
i. The committee advised the Accounting Officer to proceed with the
legal means of recovering that sum of money.
ii. The committee referred the matter to the CID to inquire into the
conduct of the Chief Finance Officer and to advise the committee
accordingly.

Query 5.5: Unaccounted for funds:


The Committee was informed that the administration had made
administrative advances to the tune of UGX. 5,000,000/= to officers but
had not provided the required accountability.

The Accounting Officer presented the accountabilities.

Observation
The committee was not convinced with the accountability presented on
the sum of UGX. 3,400,000.

169
Recommendation
The Committee recommends that the UGX3,400,000 be recovered.

Query 5.6: Failure to report Micro Procurements


Procurements worthy UGX12,038,900 were not reported to the Contracts
committee for ratification.

Observation
This may have been intended to conceal procurements outside the
procurement plans

Recommendation
The Committee recommends that the Accounting Officer should be
cautioned.

Query 5.7: Failure to Follow the Procurement Plan


The Committee was informed that the administration did not follow the
procurement plan in the construction of a classroom block.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.8: Failure to Supervise Contract Works


The Committee was informed that the administration failed in its role to
supervise contract management in the district.
For observations and recommendations refer to crosscutting issue paragraph 1.1
of this report.

Query 5.9: Construction of 5 Km Road Barrier


The Committee was informed that the administration failed to construct
a 5 km road barrier on Muhenga-Muhokya Road;

170
the Accounting Officer explained to the Committee that this barrier had
been constructed and completed despite the delay at its initial stages.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 6.0: Failure To Present Personal Files


The Committee was informed that the administration had not presented
personal files of staff members who had been deleted from the pay roll.

The Accounting Officer explained that the district had eventually sorted
out and presented the said files for inspection of the Committee,

Observation
The Committee was satisfied with the explanation offered by the
Accounting Officer

Recommendation
The Committee recommends that the query be dropped.

53. NTOROKO DISTRICT ADMINISTRATION


Query 5.1: Understaffing
The Committee was informed that the District administration had an
approved structure of 349 staff, however only 179 positions were filled at
the time of audit, leaving out 170 positions representing 49% not filled.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

171
Query 5.2: Untitled District Land

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

Query 5.3: Periodic Maintenance of Rwebisengo-Rwangara Road


The Committee was informed that the Periodic maintenance works on
Rwebisengo-Rwangara Road done under Force on Account, at a cost of
UGX 34,000,000/= had been stalled. The Accounting Officer explained
that the works had been executed and completed; all the defects were
addressed within the defect liability period.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

54. BUKEDEA DISTRICT

Query 5.1: Un Accounted for Funds


At the time of audit UGX.5,238,000 remained unaccounted for.

The Accounting Officer informed the Committee that the funds have now
been accounted for and submitted accountabilities to the Committee.

Observations

The Committee observed that:


i. The accountabilities were doubtful because they did not tally.
There were instances where the same individual was paid out of
pocket allowance for 108 days and 112 days for similar activities
around the same period of time. An officer cannot spend those
numbers of days in a single activity when he has other work since

172
the officer in question was an Assistant Health Officer.

ii. Abuse of office is cited in the action of the Accounting Officer in ii


above.

Recommendations
The Committee recommends that:

i. The Accounting Officer should make good of the entire sum of


UGX.5,238,000.

ii. The Committee recommends that the Accounting Officer be


investigated for the irregularity.

Query 5.2.1: Delayed Completion of Civil Works

The district signed a contract with a Local firm for construction of a 2


Classroom Block and an office at Abitibit Primary school. By the time of
audit in August 2015, UGX.39,407,940 (57%) had been paid.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.2.2: Audit Inspection of the Primary school facilities


Audit inspection revealed that most of the schools had very poor
accommodation for the teachers and poor classroom structures.

For observations and recommendations refer to crosscutting issue paragraph 2


of this report.

173
Query 5.3: Book Keeping in U.P.E Schools
For observations and recommendations refer to crosscutting issue paragraph 17
of this report.

Query 5.4 : Staffing Gaps


The district has an approved establishment of 117 out of which only 49
(42%) positions were filled leaving a staffing gap of 68 (58%).

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

55. KABERAMAIDO DISTRICT

Query 5.1 Unauthorized Excess Expenditure


It was observed that UGX. 45,994,919 was spent in excess of approved
revised budget estimates of UGX.462,014,855 for the Statutory Bodies
item without evidence of approval by council.
The Committee was informed that the Accounting Officer submitted the
excess expenditure to council and it was regularized.

Observation
The Committee was satisfied with the explanation.

Recommendation
The Committee upheld the auditor generals advice that the Accounting
Officer should always seek for approval of the excess expenditure from
the Council and strengthen commitment control system.

Query 5.2: Irregular Salary Payments

UGX.17,141,102 was irregularly paid to various individuals who had

174
retired, died, and others to duplicated staff names while others lacked
Consequently, the district may have lost funds.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.3: Local Revenue Shortfall

It was reported that UGX 133,844,871 was collected out of the budgeted
UGX.155,206,772resulting into a shortfall of UGX. 21,361,901.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.4: Unpaid Salary Arrears


The Auditor General reported that 48 staff members did not receive their
salary arrears totalling to UGX.38,501,604 for several months, with
arrears dating as far back as 2006/2007.

For observations and recommendations refer to crosscutting issue paragraph 3.3


of this report.

Query 5.5: Incomplete Projects and Shoddy Works


Projects worthy UGX 295million expected to be completed within the FY
were still ongoing at the end of audit.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.6: Staffing Shortage


The District has an approved structure of 315 staff. However, of the

175
approved staff of 315 only 113 (37%) are filled leaving a staffing gap of
338 198 (63%) vacancies.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

56. KOTIDO DISTRICT

Query 5.1: Unaccounted For Funds


It was observed that a sum of UGX.19,591,000 remained unaccounted
for at the time of audit.
The Committee was presented with accountabilities for UGX. 15,000,000
leaving a balance of UGX. 4,500,000 unaccounted for. The Accounting
Officer informed the Committee that:

i. The accountabilities for the UGX. 15,000,000 had been verified by


the District Internal Auditor.

ii. He had instructed recovery of UGX. 4,500,000.

Observations
The Committee observed that the accountabilities provided do not tally.

Recommendation
The Committee directed the accounting Officer to recover UGX.
4,500,000 from the responsible officers including the former Accounting
Officer with immediate effect.

Query 5.2: Unpaid Salary Arrears


A review of the payroll revealed that 24 staff members did not receive
their salaries totaling to UGX 98,667,386 over several months.

176
For observations and recommendations refer to crosscutting issue paragraph 3.3
of this report.

Query 5.3: Long Outstanding Receivables


A review of the financial statements revealed that receivables amounting
to UGX 108,703,734 remained uncollected by the year end. The figure
comprised of staff advances of UGX.50,351,867 and uncollected revenue
from contractors of UGX.58,351,887.

For observations and recommendations refer to crosscutting issue paragraph 16


of this report.

Query 5.4: Incomplete Works


During inspection it was observed that construction works for staff
houses in different schools and health centers were incomplete and
contracts were beyond the expiry periods. The amount already paid to
the contractors is UGX. 350,562,261 and the balance. 266,991,067.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.5: Education Sector

Query 5.5.1: Kacheri Secondary School

The Inspection of Kacheri secondary school revealed the following


shortcomings:
A school facility (a block of 4 classrooms with chairs) constructed at a
cost of UGX 239,456,000 has remained unutilised for the last two years.
The school facilities are not properly maintained. There is

177
bush in the compound and surroundings.
The school buildings and furniture were abandoned
without any security.
The Accounting Officer explained that the school lacked
sanitary facilities, housing and accommodation for
teachers and that these are planned for in the financial
year 2016/2017.

The Committee was informed that the Ministry of Education has not yet
taken over the school but the district has requested them to do so.

Observations
The Committee observed that:
i. The District of Kotido did not plan for the school before going into
construction.
ii. Leaving the school idle is wastage of Government resources since
substantial amount of money has already been sunk in there.

Recommendation
The Committee recommends that the District should continue following
up with the Ministry of Education and Sports to take over the school.

Query 5.5.2: Payment for No Work Done

During the FY 2011/12, the district contracted a local firm for


completion of an administration block at Panyangara SS at a contract
sum of UGX. 189,701,500. The contract start and end dates were
15/12/2011 and 10/5/2012 respectively. A total payment of UGX
182,424,753 (96%) had been made by 27/5/2014.
It was observed that a total of UGX 15,664,000 was paid to the
contractor for no work done.

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The Accounting Officer promised that the district will compel the
contractor to complete the remaining works before retention money is
paid.

Observation
The Accounting Officer failed to substantiate the extra payment.

Recommendation
The committee recommends that the accounting officer makes good of
the lose and the CID should investigate the matter.

Query 5.5.3 Construction of rain harvesting water tank at Maaru


Primary school

A local firm was awarded a contract for construction of rain water


harvesting water tank at a sum of UGX 43,717,000 and full payments
has been made to the contractor except retention. The works had short
comings. A sum of UGX 2.8 million was paid for no work done and
retention money had not been paid.

Observation
The committee noted that the quality of works was not satisfactory
including the gutters fitted, no steel pipes among others.

Recommendation
The committee recommends that the accounting officer makes good of
the extra monies paid for no work done.

Query 5.5.4: Lack of Land Titles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

179
Query 5.5.5: Lack of Cash Books in School.
For observations and recommendations refer to crosscutting issue paragraph 17
of this report.

Query 5.6: Health Management

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

Query 5.7: Poor Assets Management


Documentation review and verification revealed the following
shortcoming:-
District vehicles taken for repairs to different garages have not
been picked by the district some for as long as 4 years due to
accumulated costs and failed service.
All district assets are not engraved.

The Committee was informed that the assets will be disposed off in the
next 2 to 3 weeks.

Observation
The Committee observes that the assets have still not been disposed off.

Recommendation
The Committee upholds the query.

Query 5.8 Staffing Shortage


The district has an approved structure of 763 positions for both
traditional and health staff. However, out of the approved 763 positions
only 480 (63%) positions were filled, leaving 183(24%) posts vacant.

180
For observations and recommendations refer to crosscutting issue paragraph 4
of this report.

57. NAKAPIRIPIRIT DISTRICT

Query 5.1: Lack of Revenue Assessment


The Auditor General reported that no revenue assessment was carried
out during the year under review.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.2: Un-accounted for Funds


UGX. 32,687,192 remained unaccounted for by the end of the financial
year.

The committee was informed that the activities were still ongoing at the
time of audit but are now complete and the accountabilities were
submitted.

Observation
The Committee observed that the only valid accountabilities amount to
UGX. 6,292,000 being accountabilities for funds advanced to Kitimoe
D.A., Loput Calisto and accountabilities for remittances of withholding
Tax to URA.

Recommendation
The Committee recommends that the Accounting Officer should recover
UGX 26. 39million

181
Query 5.1: Service Delivery

Query 5.1.1: Rehabilitation of Namalu-Loreng Road


During the financial year 2014/15, the district planned to rehabilitate
Namalu-Loreng road (15km) at a cost of UGX 525,543,000. At the time of
audit in August 2015, a total of UGX 266,862,366 had been spent on the
road.
However, documentation review and the audit inspection revealed the
following shortcomings:

The payment for hire of road equipment totaling to


UGX 132,352,000 was not supported by daily worksheets to
show work done.
Only 3km of the road was graveled leaving a section of 12km
not graveled. Besides, the part worked is very narrow.

The Accounting Officer explained that the grading was done on 9km but
due to heavy rains, the road could not be traced.

Observations
The committee finds the submission by the accounting officer suspect as
the road worked could not disappear without trace. The admission by the
accounting officer tantamount to fraud and wasteful expenditure.
The committee noted variance in the road length reportedly worked on by
the accounting officer as per the works purportedly certificate of
completion adduced indicating 21 kilometers as opposed to the contract
length of 15 kilometers.
The committee rejected the accountability based on the document
provided by the accounting officer.

182
Recommendations
The committee recommends that the accounting officer makes good of
the loss.

Query 5.1.2: Delayed Projects

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.1.3: Irregular payment of hardship allowance

Circular standing instruction No.2 of 2010 stipulates officers entitled to


hardship allowances as those who work in hard to reach places as their
work stations.
Contrary to the instruction, management paid UGX 51,301,008 as
hardship allowance to some of its staff working at the headquarters and
Town Council.

The Accounting Officer explained that recovery of the money from the
responsible staff was on-going.

Observation
The committee observed that the entire district was a hard to reach area
and it was unfair to isolate the town council and some sub counties
within the districts not to be hard to reach areas.

Recommendation
The committee recommends that:
i. All the districts approved by MoPS as hard to reach should include
the urban centers.
ii. The accounting officer recovers the UGX 51,301,008 from the non-

183
entitled officers.

Query 5.1.4: Payment to staff who died and those who transferred
service.
It was observed that a cumulative figure of UGX. 20,691,180 was paid to
some district staff who passed on and those who transferred service
because they were left on the wage bill for extra months after they left or
died.

Efforts to recover the money.

Observation
The Committee noted the efforts to recover the funds

Recommendations
The accounting officer should continue with the recovery

Query 5.2 Lack of Land Title

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

58. SOROTI DISTRICT

Query 5.1: Budget Performance


UGX.21, 945,658,555was budgeted for in respect of Central Government
Grants, Donor funds and Local Revenue but only UGX.
20,455,153,431was released resulting in a shortfall of UGX.1,
490,505,124 (7%).

The Accounting Officer explained that this was due to non-disbursement

184
of some donor funds and other government transfers from NAADS and
NUSAF grants that had been budgeted for.
The Committee was informed that:
i. An officer to handle revenue has been appointed;
ii. The district is working towards revenue enhancement so as to
improve on its capacity to bridge the gap between the funds needed
to implement District programs and the amount that is remitted
from the Center.

Observations
The Committee observed that there is need for the District to step up
revenue collections so as to bridge the gap between the funds needed to
implement District programs and the amount that is remitted from the
Center.

Recommendation
The Committee recommends that the Accounting Officer should conduct
revenue assessment and step up revenue collection as a matter of
urgency.

Query 5.2: Un accounted for Funds


Funds totaling to UGX. 9,442,000 remained unaccounted for at the time
of audit.

The Accounting Officer submitted the accountabilities.

Observation
The Committee observed that only accountabilities for UGX. 8,207,000
were genuine. These were accountabilities from Omutos Edward, Oboi
Richard and Okiror.

185
Recommendation
The Committee recommends that the Accounting Officer recovers the
outstanding balance of UGX. 1,655,000.

Query 5.3: Dry Boreholes


The district signed a contract with a local firm for drilling, casting,
installing and test pumping 12 deep bores under lot-1 out of which, 5
boreholes paid for at a total cost of UGX.43,565,836 were dry implying
that no value for money was achieved.

The Accounting Officer attributed shortcoming to differences in the


sighting and drilling contractor and yet dry wells are discovered after test
pumping has been done.

The Committee was given a scientific explanation on determination of


geological sites.

Observation
The Committee observed that the explanation exonorates the District on
this matter.

Recommendation
The committee recommends that the query be dropped.

b. Audit Inspection of Primary School facilities


For observations and recommendations refer to crosscutting issue paragraph 2
of this report.

Query 5.4: Human Resource Management

Query 5.4.2: Irregular Salary Payments

186
A review of the Bank of Uganda Salary Statement revealed that salaries
totalling to UGX 14,332,440 were paid to various staff without any
support documents and lacked mapping templates which are the source
documents for the Salary payments.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.4.3: Staffing Gaps

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query5.5: Non Compliance with Statutory Obligations

Query 5.5.1: Un-remitted PAYE


An amount of UGX.4,206,000 was not remitted to Uganda Revenue
Authority in PAYE.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.5.2: Non Remittance of WHT


UGX. 27,502,668 was paid to different suppliers of Ngora town council
but 6%WHT totalling to UGX.1,650,160 was not recovered.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

187
59. NAPAK DISTRICT LOCAL GOVERNMENT

Query 5.1: Local Revenue Shortfall


It was observed that UGX.163,978,000 was collected as local revenue
against the budgeted UGX.328,157,000 resulting into a shortfall of UGX
164,179,000. This constituted 50% of the budgeted revenue.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.2: Failure to return Conditional Unspent Balances


Section 17(2) of the Public Finance Management Act 2015 requires an
Accounting Officer who has not spent money that was appropriated on
that vote for the financial year to return it back to the consolidated fund.
In a bid to justify retention of funds, the district included commitments
at the Year-end amounting to UGX 53,448,400 that had neither been
incurred nor certified as works in progress.
This is irregular.

For observations and recommendations refer to crosscutting issue paragraph 9


of this report.

Query 5.3: Unaccounted for Funds


UGX.30, 269, 697 remained unaccounted for at the close of the financial
year.

The Accounting Officer submitted accountability for the UGX.


14,719,000.

188
Observation
The Committee was satisfied with the accountability worthUGX.
14,719,000.

Recommendation
The Committee recommends that the Accounting Officer recovers the
outstanding balance of UGX. 15,550,697.

Query 5.4: Irregular Collection of 2% Development Tax

For observations and recommendations refer to crosscutting issue paragraph 8


of this report.

Query 5.5: Payroll

Query 5.5.1: Failure to Absorb UGX 1,030,968,856meant for salaries


The district failed to absorb UGX 1,030,968,856 meant for salaries hence
a reduction in indicative planning figure.
The Accounting Officer attributed the failure to absorb the funds to
delayed recruitment of new staff caused by delays in consultations
between Ministry of Public Service and Ministry of Health because they
wanted to run a joint advert.

Observation
The committee observed that the District had eventually recruited some
staff.
Delayed recruitment of staff was caused by the demand by the Ministry
to run joint advertisements for vacant positions.

Recommendation
The committee recommends that the Ministry of Public Service ensure

189
that monies intended to cater for salaries are remitted to the districts in
time.
Refer to the general observations on failure to absorb funds meant for
salaries

Query 5.5.2: Overpayments of Salaries


A review of the payroll and Napak Districts Salary Bank statement
revealed that overpayments of salaries amounting to UGX.42,615,934
were made to several employees between the month of July to September
of 2014.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.6: Un authorized Excess Expenditure


The District incurred UGX 24,074,361 in excess of the approved budget
estimates for works department without making approved virements or
reallocations

The Committee upheld the query.

60. AMURIA DISTRICT

Query 5.1: Incomplete Projects

It was observed that projects worth UGX. 151,106,022 undertaken


during the financial year had not been completed on schedule and
according to the work plans.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

190
Query 5.2: Procurement Anomalies

It was observed that revenue contract procurements worth


UGX.15,130,000lacked procurement files.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.3: Unaccounted for Funds

UGX. 7,885,000remained unaccounted for at the time of audit.


The Committee was informed that the Officer who was supposed to
provide the accountability died.

Observation
The relevant officer did not appear before the committee for terminal
illness. He was later declared to have passed on

Recommendation
The Committee recommends that:
i. This funds be written off .
ii. The Accounting Officer be cautioned.

Query 5.4Under Staffing


The district has an approved structure of 162 positions. However, out of
the approved 162 positions only 55(34%) positions were filled leaving
107(66%) posts vacant

For observations and recommendations refer to crosscutting issue paragraph 4

191
of this report.

Query 5.5: Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

61. NGORA DISTRICT

Query 5.1: Un accounted for Funds


Funds totaling to UGX. 9,024,000 remained unaccounted for at the time
of audit.

In the absence of the accountabilities, it was difficult to confirm that the


funds were utilised for the intended purposes.

The Accounting Officer submitted accountability for the funds except


UGX. 560,000 advanced to Opolot Martin.

Observations
The Committee was satisfied with the accountabilities.

Recommendation
The Committee recommends that the Accounting Officer recovers UGX.
560,000 from Opolot Martin.

Query 5.2: Failure to Undertake Revenue Assessments


The district contracted out local revenue totaling to UGX.89,286,000
without evidence of any assessment carried out.. Tendering out
unassessed revenue sources leads to setting of unrealistic reserve prices
which may result into loss of future.

192
For observations and recommendations refer to crosscutting issue paragraph 10
of this report.

Query 5.3: Book Keeping in U.P.E Schools

For observations and recommendations refer to crosscutting issue paragraph 17


of this report.

Query 5.4.1 and 5.4.2: Idle Dental Machine and Theatre Equipment
The district paid UGX.16,000,000 for the supply of Dental Machine and
UGX. 34,670,000 for supply of an operating bed, Autoclave Machine and
Anaesthetic Machine to Ngora Health Centre IV.
However, the dental machine was still idle and packed 20 months after
delivery and the other machines were also still packed 2 months after
delivery.
Having functional equipment that are not in use denies the public the
needed service.
The Committee was informed that the theatre is now in place and the
machines are operational in the hospital. The machines had not been
connected because UMEME delayed to connect power.

Observations
The Committee observed that Ngora District did not plan properly to
syncronise the delivery of the machines with the power connection.

Recommendation
The Committee recommends that the query be dropped.

193
Query 5.4.3 Audit Inspection of Primary school facilities

For observations and recommendations refer to crosscutting issue paragraph 2


of this report.

Query 5.5 Staffing Gaps


The district has an approved structure of 49 staff. However, out of the
approved staff of 49 only 25 (51%) positions were filled leaving 24 (49%)
positions vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.6 Stores/Inventory Management.


It was observed that the stores lacked a qualified personnel the items
were not properly arranged.

The Committee was informed that the stores Assistant has now been
recruited, a store built and an up to date stores ledger kept.

Observation
The Committee was satisfied with the explanation.

Recommendation
The Committee recommends that the query be dropped.

62. KUMI DISTRICT


Query 5.1 Wasteful Expenditure

A local firm was awarded a contract to construct an arch bridge on

194
Ogoloi-Ongoria Swamp at a cost of UGX. 45,381,000 funded by NUSAF
By the time of audit all the money had been paid.

However, physical inspections in September 2015 revealed that the arch


bridge was constructed in the middle of a swamp without any connecting
roads rendering the expenditure wasteful and no value for money
achieved for the money spent.

The Accounting Officer explained that the district had anticipated more
financing from NUSAF to open the linking roads but the funding never
came.

The Committee was informed that the district has now got funds to
construct the linking roads under the NUSAF III water sheds projects.
The Accounting Officer submitted evidence of correspondences between
Kumi District and Prime Ministers Office and also the MOU between
Kumu District and NUSAF.

Observation
The Committee was satisfied with the explanation.

Recommendation
The Committee recommends that the query be dropped.

Query 5.3 Delayed projects


It was observed that a project for construction of an operating theatre at
Kumi HC IV contracted to a local contractor at a contract price of
UGX.179,549,400 was rolled over from financial year 2013/14 to
2015/16.

For observations and recommendations refer to crosscutting issue paragraph 1.1

195
of this report.

Query 5.3 Local Revenue Shortfall

UGX. 214,631,696 was collected in Local Revenue against a budget of


UGX. 322,823,941 resulting in a shortfall of UGX. 108,192,245 (34%).

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.4 Unaccounted for funds


An amount of UGX. 8,861,000 remained unaccounted for at the time of
audit.

The Accounting Officer submitted the accountabilities.

Observations
The Committee was only satisfied with accountabilities worth UGX.
2,145,000 being accountabilities of funds advanced to Spike
Investments.

Recommendations
The Committee recommends that the outstanding balance of UGX.
6,716,000 be recovered by the Accounting Officer.

63. KAABONG DISTRICT

Query 5.1 Irregular Purchase of Land


Regulation 25 (1) (a) of Local government PPDA regulations 2006 require
the Procurement and Disposal Unit to manage all Procurement or

196
Disposal activities of the Procuring and Disposing entity.

The district directly purchased land at Kaabong Town Council for a


prison facility at a cost of UGX. 30,000,000. By the time of audit in June,
2015, the first instalment of UGX 15,000,000 had been paid with the
remaining balance of UGX 15,000,000 scheduled for settlement in the
subsequent financial year. However, the following shortcomings were
identified:-
The procurement was done without involving the Procurement and
Disposal Unit (PDU) contrary to Regulation 25 (1&2) of the
LGPPDA Regulations 2006 there by flouting the PPDA regulations.

No purchase agreement was availed for audit verification.

No survey was conducted by authorised person from the Ministry


of Lands to ascertain the suitability of the land for public purpose
contrary to section 2 (1) of Land Acquisition Act 1965 (as
amended).

The Government Valuer was not involved to determining the


property value.

Consequently, the district may not have obtained value for money.

The Accounting Officer explained that efforts are underway to regularize


and formalize acquisition of the land though retrospectively and
belatedly.

Observation
The committee observed that the sum of UGX. 15,000,000 was paid
contrary to the laws of Uganda, allegedly for purchase of land at the
request of Uganda Prisons Service, and expected to be later by the
Prisons Authorities.

197
Recommendation
The Committee recommends that the Accounting Officer responsible for
the expenditure refunds the UGX 15,000,000 illegally paid for the
purchase.

Query 5.2
a) Shoddy work at Kerenga Health Center IV
For observations and recommendations refer to crosscutting issue paragraph 1.1
of this report.

b) Completion of walkway at Karenga HC IV

For observations and recommendations refer to crosscutting issue paragraph


1.1 of this report.

Query 5.3 Unaccounted For Funds


UGX. 2,862,000 remained unaccounted for at the close of the financial
year.

The Committee was informed that at the time of audit theaccountabilities


were with the IGG.

Observation
Documents for the accountability were later retrieved and scrutinized to
the satisfaction of the committee.The IGG office was involved in the
inquiry into the matter and had taken all the documentation that was
required for accountability

Recommendation
The Committee recommends that the query be dropped

198
Query 5.4 Absence of deposit account for retention monies

The district signed contracts worth UGX 1,263,091,480 in the financial


year 2014/15 in the various departments attracting retention money
totalling to UGX 126,309,148 payable to various service providers. It was
observed that the retention monies were kept in the different
departmental expenditure accounts awaiting defect liability period of the
finished works to elapse.

The Accounting Officer explained that a request to open an account for


retention funds had already been submitted to the Accountant General
and feedback was being awaited.

The Committee submitted evidence of effortsto open the account in a


letter the Accounting Officer wrote to the Accountant General. However
the district did not receive a response and the money was remitted back
to the Consolidated Fund

Observation
The PFMA requires entities to return money at the end of the financial
year including retention fees.

Recommendation
There is need toamend the PFMA on the return of money at the end of
the financial year as it is not possible to pay retention fee within defect
liability period of the public works.

Query 5.4 Lack of School Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

199
Query 5.5 UPE Schools

Query 5.5.1 Lack of Cash Analysis Books

For observations and recommendations refer to crosscutting issue paragraph 17


of this report.

Query 5.5 Human Resource


Query 5.5.1 Payroll Anomalies.

A review of the district payroll revealed several anomalies as outlined


below:

8 Teachers absconded from duty but continued to earn


salary leading to a loss of UGX 54,835,488 during the year.

1 teacher who died on 1/1/2014 has been earning from


payroll for the last 14 months, resulting into a loss of UGX
8,511,874.

8 staff members whose interdictions were lifted one year ago


have not received their salary arrears totalling to UGX
78,485,293. Furthermore 17 new employees (Teachers &
Nurses) have not accessed the payroll resulting into arrears
of UGX 7,852,351.

Non-payment of employees negatively affects service delivery


and employee performance while delay to delete employees
who have left service may result in loss of funds.

For observations and recommendations refer to crosscutting issue


paragraph 3.1 of this report.

200
Query 5.6.2: Under Staffing

The District has an approved structure of 779 of both district and health
staff, but only 441 (56.7%) are filled leaving a staffing gap of 338 (43.3%)
vacancies

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.7 Stores Management Kaabong Hospital

Query 5.7.1 Delayed destruction of Expired drugs

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

Query 5.7.2 Inadequate storage space for medicine

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

64. KATAKWI DISTRICT

Query 5.1 Unspent Balances

Audit reportedan amount of UGX.19,889,543that remained unutilised by


the end of the financial year 2014-2015 but was not returned to the
Consolidated Fund.

For observations and recommendations refer to crosscutting issue paragraph 9


of this report.

Query 5.2 Local Revenue Shortfall

It was observed that UGX 199,666,448 was collected out of the budgeted
UGX. 299,098,000resulting into a shortfall of UGX. 99,431,552. This

201
constituted only 33% of the budgeted revenue.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.3 Payroll Anomalies


Irregular salary payments
UGX.8,759,567 was paid to 3 officers that were not validated during
payroll audit.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Unpaid salary arrears

42 staff members did not receive their salary arrears totalling to UGX.
83,296,727.

For observations and recommendations refer to crosscutting issue paragraph 3.3


of this report.

Query 5.4: Service Delivery

Query 5.4.1: Abandoned Culverts

The district paid for 18 culverts at a total cost of UGX.3,060,000 for use
on various road works but they were abandoned on the road sides.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.4.2 :Incomplete Projects and Shoddy Works

202
Projects worth UGX. 809,701,780 planned and undertaken during the
financial year and expected to have been completed before the closure
of the year were still on going at different stages or abandoned and
with some elements of substandard works noted.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.5 Staffing Shortage

The district has an approved structure of 157 staff, but only 74 (47%) are
filled leaving a staffing gap of 83 (53%) positions.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.6 Financial Management of UPE Funds

For observations and recommendations refer to crosscutting issue paragraph 17


of this report.

65. ABIM DISTRICT

Query 5.1 Irregular Procurements

A review of the procurements record revealed shortcomings as follows:

The district used non compliant firms for procurements worth


UGX. 155,852,990.

Used Selective bidding but with less than 3 bidders for a


procurement worth UGX. 210,817,332

Procurements worth UGX. 238,898,882 lacked records

203
Unplanned procurements worth UGX. 62,693,684

Contracts with un supported contingency provisions amounting to


UGX. 16,667,316

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.2 Irregular Levy of 2% Development Tax

The district levied a total of UGX 28,916,066 as 2% development tax from


its suppliers without the Ministers approval.

For observations and recommendations refer to crosscutting issue paragraph 8


of this report.

Query 5.3Non Compliance to Statutory Obligations

30% PAYE deductions totalling to UGX 10,406,000 recovered from


Councillors emoluments were not remitted to URA.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.4 Financial Management of UPE Funds

For observations and recommendations refer to crosscutting issue paragraph


17of this report.

Query 5.6 Payroll

A review of the district payroll revealed anomalies as outlined below.


The district had outstanding arrears amounting UGX 73,175,741

204
by the end of 2014/2015 Financial Year.
UGX 18,406,716 was paid to non-validated employees.

For observations and recommendations refer to crosscutting issue paragraph


3.1 of this report.

Query 5.7: Service Delivery

Query 5.7.1: Education Sector

a. Abandoned Construction of a 4 in 1 staff house at Katala


Primary School.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.7.2: Health Sector

a. Construction of 4 sets of lined latrines at Abim Hospital

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.7.3: Inadequate Infrastructure under Primary Education in


the District

For observations and recommendations refer to crosscutting issue paragraph 2


of this report.

Query 5.7.4: District Hospital Facilities

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

205
Query 5.8 Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

Query 5.9 Staffing Gaps

The district has an approved structure of 1346 positions, but only 959
(71%) are filled leaving a staffing gap of 387 (29%) positions.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

66. SERERE DISTRICT

Query 5.1 Service Delivery

Query 5.1.1 Education Sector

a) Book Keeping and financial management of UPE Funds


For observations and recommendations refer to crosscutting issue paragraph
17 of this report.

b) Inadequate and Dilapidated Infrastructure in Primary Schools


Service.
For observations and recommendations refer to crosscutting issue paragraph 2
of this report.

Query 5.2: Staffing Gaps


The District has an approved structure of 157 staff. However, it was
observed that out of the approved staff level of 157 posts only 65(41%)

206
posts were filled leaving a staff gap of 92(59%) posts.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

67. MOROTO DISTRICT

Query 5.1 Under Staffing


The District has an approved establishment of 364 positions but only
178 posts (49%) were filled leaving 186 vacant posts representing (51%)
of the establishment.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.2 Financial management of UPE Funds


For observations and recommendations refer to crosscutting issue paragraph 17
of this report.

Query 5.3 Failure to Collect Rent Arrears


Rental arrears of UGX 45,400,000 arising from renting out office space to
different organisations remained outstanding by the time of audit.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.4Salary Payment to Non Validated Staff.


For observations and recommendations refer to crosscutting issue paragraph 3.1
of this report.

207
68. AMUDAT DISTRICT

Observation

The Committee upheld the audit queries on Amudat District because


they did not report for a meeting with the Committee on the scheduled
date.

69. AGAGO DISTRICT LOCAL GOVERNMENT


Query 5.1: Understaffing
The District has an approved structure of 137 staff. However, it was
observed that out of the establishment of 137 posts, only 46 posts were
filled leaving 91 posts vacant representing 66% of the establishment

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.2: Nugatory Expenditure


Uganda Revenue Authority [URA] imposed a UGX. 156,500,000 penalty
on the District for non-remittance of taxes

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.3: Irregular Development Tax

For observations and recommendations refer to crosscutting issue paragraph 8


of this report.

Query 5.4: Unaccounted for Funds


Audit reported that advances amounting to UGX.25, 449,200 were not
accounted for at the time of audit.

208
The Accounting Officer submitted the accountabilities to the Committee.
Observations
The Committee observed that the accounting officer accounted for the
funds though not within the one month as stipulated in the law.

Recommendations
The Committee recommends that the query be dropped, but caution be
administered to the Accounting Officer to in future ensure that funds are
accounted for within the statutory period..

Query 5.5: Lack of a Land Title

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

70. ALEBTONG DISTRICT


Query 5.1: Lack of Land Title

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

Query 5.2: Lack of Basic Facilities in Kakira Primary School

For observations and recommendations refer to crosscutting issue paragraph 2


of this report.

5.3 Understaffing
The district has an approved structure of 126 staff. Out of the 126
approved posts, only 54 positions were filled, leaving 72 posts vacant,
representing 57% of the approved structure.

209
For observations and recommendations refer to crosscutting issue paragraph 4
of this report.

71. AMOLATAR DISTRICT

Query 5.1: Unaccounted for Funds


At the time of audit advances totalling UGX.39,929,500remained
unaccounted for.
The Accounting Officer submitted accountabilities to the Committee.
The Committee was informed that at the time of audit some staff did not
attach the relevant documents to the accountabilities.

Observations
The Committee observed that:
i. There is a lot of laxity among the staff in the district on matters of
accountability.
ii. The Accounting Officer did not perform his supervisory role in
ensuring that the accountabilities were done properly.
iii. Some of the documents presented did not appear to be genuine.

Recommendations
The Committee:
i. Rejects the accountability;
ii. Recommends that the Accounting Officer recovers the money
within a period of one month from the date of adoption of this
recommendation.
iii. Recommends that the Accounting Officer be held liable for
noncompliance with the accounting regulations.

210
iv. The Committee referred the Accounting Officer, the Chief Finance
Officer and the Senior Commercial Officer, Mr. Richard Okello to
CIID over forged accountability documents of the UGX19,291,000.
v. The Committee further tasked the CID to investigate matters of
accountability in Amolatar District.

72. AMURU DISTRICT

Query 5.1: Overpayment of Salary


payroll analysis carried out revealed that 345 members of staff were
supposed to earn salaries amounting to UGX.120,860,963 according to
their scales were instead paid UGX.246,803,309 resulting into a salary
overpayment of UGX. 125,362,859.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.2: Unaccounted for Funds

At the time of audit it was found that UGX.83,166,346 advanced to


Council officials had not been accounted for.

The Accounting Officer presented accountabilities to the Committee.

Observations

The Committee observes that: -

i. There was no documentary evidence availed to support


advances made to the councilors;

211
ii. The Accounting Officer disregarded the regulations and
the advice of the Auditor General.

Recommendations

The Committee recommends that the Accounting Officer refunds the


UGX. 83,166,346 that was not accounted for by the Accounting Officer
Reprimand.

Query 5.3: Irregular Development Tax

For observations and recommendations refer to crosscutting issue paragraph 8


of this report.

73. DOKOLO DISTRICT

Query 5.1: Unaccounted for Funds

It was reported thatUGX. 22,979,000 remained unaccounted for at the


time of audit.

The Committee was informed that the works were on going at the time of
audit.

Observations

The Committee observes that:


i. Supporting documents namely; the Local Purchase Order dated
08th May, 2015 was not in conformity with the demand note;
ii. The supporting document could not be authentic pro forma
invoice of UGX.2,086,000 submitted by Young Star and Service

212
Company Limited in Lira did not have quoted prices and left out
labor costs. This was upon a handwritten requisition from a
one Peterson Oyoo, for Assistant Engineering Officer.
iii. The Accounting Officer disregarded procurement procedures and
guidelines.
iv. The Accounting Officer did not give satisfactory explanation on the
fuel consumption for 20 days.
v. The committee observed that the capacity ofe general the staff of

Recommendations

The Committee recommends that the Accounting Officer recovers


Shs.1,000,000 advance made to Mr. Bernard Otim the Fisheries Officer.

Query 5. 2: Irregular Development Fees

For observations and recommendations refer to crosscutting issue paragraph 8


of this report.
.
74. KITGUM DISTRICT

Query 5.1: Inspection of Kitgum Main Hospital

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

Query 5.2: Stalled Projects


Audit inspection carried out in June 2015 on various projects rolled over
from the previous year, revealed that some projects had stalled.

For observations and recommendations refer to crosscutting issue paragraph 1.1

213
of this report.

75. NWOYA DISTRICT LOCAL GOVERNMENT

Query 5.1: Funds not Accounted for

Audit observed that funds amounting to UGX. 37,975,969 advanced to


various council officers to carry out council activities remained un
accounted for

The Accounting Officer informed the Committee that the funds were not
fully accounted for as some officers had retired financial accountabilities
but not the technical accountabilities.

Observations

The Committee observes that: -

i. the Accounting Officer continued to authorize payment of


advances to officers who had not retired previous
advances;
ii. the Accounting Officer was negligent in accounting for
advances; and
iii. the Accounting Officer flouted the regulations.

Recommendations

The Committee directs the Accounting Officer to recover the


UGX.37,975,969 from the responsible officers within three months from
the date of adoption of this recommendation.

214
Query 5.2 Understaffing
The District has an approved structure of 146 staff. However, it was
observed that out of 146 posts, only 49 posts were filled leaving 97
vacant posts representing 66% of the establishment.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

76. OTUKE DISTRICT LOCAL GOVERNMENT


Query 5.1Unaccounted for Funds
Advances amounting to UGX.25,381,700remained unaccounted for at
the time of audit.

The Accounting Officer submitted accountability of funds without an


activity report.

Observations

The Committee observes that:


i. Service delivery is greatly hinged on prudent financial management
practices, among other factors. Failure to manage public funds in
accordance with the law grossly affects service delivery to local
communities and should be discouraged.
ii. By not accounting for funds in time, the Accounting Officer flaunted
Regulations 43(2) and (3) of the Local Government Financial and
Accounting Regulations, 2007.

iii. The accountability for funds was not adequately supported.

215
Recommendations

The Committee recommends that:


i. The District Health Officer be held solely responsible for the
anomaly;
ii. The Accounting Officer recovers the UGX. 25,381,700.

Query 5.2: Understaffing


The district has an approved structure of 699 staff. However, it was
observed that out of the 699 approved posts, only 562 were filled, leaving
137 posts vacant representing 20%

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

77. GULU DISTRICT

Query 5.1 Over Payment of Salary


At the time of audit it was found that the district overpaid salary
amounting to UGX.26,102,493 contrary to the approved salary structure.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

5.1.2. Payment of Salary to Non District Staff


The Auditor General observed that UGX.71,972,777 was paid to
employees whose names were appearing on the payroll but not on the
district staff list.

216
The Accounting Officer explained that Council was still awaiting the
outcome of the special audit being carried out by the District Internal
Auditor.

The Committee was informed that the affected staff are district
employees and their files were presented to the Committee as evidence of
their existence.

Observation
The Committee was concerned that the Accounting Officer did not give
Auditor General the said files at the time of audit.
ii. such behavior was attributed to negligence.

Recommendation
i. The Committee recommends that the Human Resource Officer and
the Accounting Officer should be held liable.
ii. The Accounting Officer should recover the UGX. 71,972,777 within
one month from the date of adoption of this recommendation.

5.2 Under Collection of Local Revenue


The district budgeted local revenue of UGX.950, 581,000 but only
UGX.620,016,634 was realised resulting in a shortfall of
UGX.330,564,366 representing 35% of the budgeted local revenue.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

4. Goods not Taken on Charge


It was observed at the time of audit thatmotor vehicle tyres worth
UGX.22,446,600 that were purchased by the district could not be traced
to the stores

217
The Chief Administrative Officer informed the Committee that the goods
in question were old tyres that should have been taken to the stores
when new ones were bought.

Observations
The Committee observed that it is the new tyres that did not pass
through the stores.

Recommendations
The Committee recommends that the query be dropped with caution to
the Accounting Officer.

5. Delayed Completion of Works


Awach Health Center
The Auditor General reported delayed works at a contract sum of
UGX.65,284,450 for the renovation of an Operating Theatre at Awach
Health Centre IV.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

ii. Staff House at Pagik Primary School


Construction of staff house at Pagik P/S at a Contract sum
UGX.75,311,300.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

iii. Odek bridge along Acet-Jinkomi Road


Construction of Odek bridge along Acet-Jinkomi Road at a Contract sum
UGX.315,457,453. The Committee was informed that works were

218
finished. The documents were handed over to the Committee. The
certificate of completion has not yet been issued because it is still under
the defect period.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

78. PADER DISTRICT


Query 5.1 Transfers to Un operational Institutions
According to quarterly releases to Local Government Documents a total
of UGX.161,056,000 was transferred from the Ministry of Education and
Sports to Pader Technical and Farm School on a quarterly basis via the
district vote 547.

However, it was observed that the Technical school was not operational
in the district rendering the transfer fictitious. In previous audit reports,
it was reported that Operational Funds amounting to UGX.555,933,000
were transferred to the same Technical and firm School for the financial
years 2012/2013 and 2013/2014.

The Accounting Officer explained that Pader Technical Farm School


exists in Pader Sub County but for the last three financial years
(2012/2013, 2013/2014) and (2014/2015) it is under construction. The
Accounting Officer further stated that Inspector General of Government
regional office, Gulu is already investigating the matter. However, he
stated that since the monies were direct transfers to the institution yet to
be operationalized, the Ministry of Education and Sports is responsible
because it advises the PS/ST for the releases.

Observation
i. The committee established that the Institute was non existent

219
ii. The committee finds the release a ploy by the Ministry of finance,
planning and economic development to defraud government,

Based on the information availed to the committee, it amounted to


connivance between the accounting officer of Pader district at the time
and the ministry of finance and education responsible officers.

Recommendation
i. The committee finds the transaction suspect and accordingly
recommends that a thorough investigation be conducted.

ii. The total sum of monies of UGX 716million involved be recovered


from the officers

5.2 Unaccounted for Funds


The Auditor General reported that UGX.67,849,000 advanced to various
Council officials to carry out council activities was not accounted for.
The Accounting Officer informed the Committee that during the period
under review, some activities were still on going. They were concluded
and the accountabilities were presented to the Committee.

Observations
i. The Committee observes that the Audit was done after the closure
of the Financial Year so the activities could not have still been on
going.

ii. The Committee rejected the accountabilities because most of them


were travels which required prompt evidence of accountability

Recommendations
The Committee recommends that the Accounting Officer should recover
the money from the officers a total sum of UGX 67,849,000.

220
Query 5.3 Over Payments of Salaries
The district over paid salaries amounting to UGX.32,334,357.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.4 Irregular Tax Levy


The District levied and collected 2% development tax totaling
UGX.35,236,426 on contracts awarded to service providers without
approval of the Minister.

For observations and recommendations refer to crosscutting issue paragraph 8


of this report.

Query 5.5 Delayed Completion of Civil Works


It was observed that a contract amounting to UGX.71,004,310 was
awarded to a local firm for construction of three classroom block at
Lacekocot Primary School. By the time of audit, October 2015 a sum of
UGX.63,903,879 representing 90% of the contract sum had been paid,
however, the works had not been completed and the contract period had
expired.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

79. LAMWO DISCTRICT


Query 5.1. Un-Accounted for Funds
UGX.37,218,100 advanced to Council staff for various activities
remained unaccounted for by the close of the financial year.

221
The Accounting Officer informed the Committee that the monies have
now been accounted for except for two officers who have loans. He
provide evidence of the recoveries.

Observations
The Committee was satisfied with the evidence of recoveries.

Recommendations
The Committee recommends that the query be dropped except for the 2
officers.

Query 5.2. Irregular Levy of Development Fees1


For observations and recommendations refer to crosscutting issue paragraph 8
of this report.

Query 5.3 Incomplete Projects2


Audit inspections carried out on two roads revealed that the works are
incomplete.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

80. LIRA DISTRICT


Query 5.1 Over Payment of Salary3
Payroll analysis carried out found that 539 members of staff who were
supposed to earn salaries amounting to UGX.185,558,234 according to
their scale were instead paid UGX.218,514,089 resulting into a salary

222
overpayment of UGX.32,955,855. In addition, duplicate payments
amounting to UGX.8,419,256 were made to five staff.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.2. Unaccounted for fuel Deposits


UGX.24,000,000 deposited with a fuel station remained unaccounted for
by close of the financial year.
The Accounting Officer presented Fuel issue orders and
invoices/statements and receipts as proof of accountability.
The Committee was concerned that the Accounting Officer did not
present the receipt to auditors during audit.

Observations
The Committee observed that:
i. The fuel money was paid to Shell Malindi yet the receipt is for Shell
Lira which are two different petrol stations.
ii. In a number of instances private cars were fueled. The Committee
rejected the explanation that the private number plates
belonged to hired road equipment that were doing the road
works with permission from the Ministry of Works.
iii. The signatories on the fuel vouchers were not consistent. At one
point the same person signed on one voucher as an Accounting
Officer and on another as a driver.

Recommendation
The Committee recommends that the documents relating to this query were
doubtful and the matter was referred the supervising Engineer to the CIID.

223
Query 5.3. Non Remittance of Withholding Tax
For observations and recommendations refer to crosscutting issue paragraph
11 of this report.

Query 5.4. Delayed Completion of Lira Soroti Road


The audit of the construction of Low Cost Sealing at Boroboro-Lira Soroti
road, at a contract sum of UGX.199,447,169 revealed that the works
were incomplete.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.5. Unverified Health Equipment Donated to Ogur HC IV


Ogur Health Centre IV received a donation of Health equipment worth US
$450,000 from NUHITES and USAID programmes. However, the
equipment was not availed for physical inspection. There is a risk that
the equipment could have been lost.
The Accounting Officer informed the Committee that a team from Office
of the Chief Administrative Officer visited the Health Centre and found
the equipment there.

Observations
The Committee observed that:
i. The committee asked the district to take stalk of donations from
development partners.
ii. The district must always record donations in its books.

Recommendation.
The committee recommends that District properly receives and records
the equipment accordingly.

224
81. APAC DISTRICT
Query5.1 Unaccounted for Funds
The Auditor General reported that a total of UGX.85,520,700 remained
unaccounted for by the end of year.
The Accounting Officer submitted a Distribution list for the ox ploughs.
The Committee was informed that the Production Officer who was the
focal Point Person in this transaction refused to come to the Committee
meeting.

Observations
The Committee observed that:

i. The Accountabilities given were not genuine and were therefore


rejected by the Committee.

ii. The Production Officer deliberately refused to come to the meeting


and the Chief Administrative Officer did not put effort to ensure
that he comes for the meeting.

Recommendations
The Committee recommends that:
i. The Accounting Officer and the other officers involved be
investigated by CIID.

ii. The Accounting Officer recovers the money from the former
Accounting Officer, the Chief Finance Officer, the Production
Officer, the Procurement Officer and all other departmental
heads who were involved in this procurement.

225
Query 5.2: Unsupported Payment of Domestic Arrears
A review of cash flow statement revealed that domestic arrears paid
during the year amounted to UGX.3,789,821,272. However, the
supporting documents were not provided for audit. Besides the
Statement of Outstanding commitments as at 30th June 2014 on Page 50
of the Financial Statements shows a balance of only UGX.23,085,261.
In addition, the same statement of outstanding commitments reported
outstanding statement of UGX.200,698,807 by 30th June 2015 whereas a
schedule of accounts payable on page 52 reported a balance of
UGX.127,830,185 rendering the Financial Statement balances reported
misleading.
The Accounting Officer explained that there was a mix-up since monthly
arrears cleared within FY 2014/15 was added to the arrears of the
2013/14 for the year and they have separated the arrears of previous
financial year. There was however no change in the financial statements.
The Committee was informed that those were not domestic arrears but
rather errors that arose from the fact that the staff had not been trained
on how to use the IFMIS. In this case the payments were not
accompanied by source of revenue hence their reflection as domestic
arrears.
The Accounting Officer said reconciliations have since been made and
errors corrected.

Observation
There was incompetence by the Chief Finance Officer

Recommendation
The Committee recommends that the query be dropped.

Query 5.3 Unauthorized Reallocation

226
During audit it was observed that reallocations amounting to
UGX.4,532,761,373 were made on four programs without authority and
proper reallocation warrants.

The Accounting Officer admitted the shortcoming and pledged to ensure


proper budgetary planning and ensure reallocations are properly
authorized.

The Accounting Officer informed the Committee that this problem also
arose from the faulty accounts.

Observation
The committee noted that CFO was recalled from retirement and was of
advanced age unable to perform his duties effectively.

Recommendation
The Committee advised the Accounting Officer to:
i. The committee recommends that a substantive CFO be recruited.
ii. In future seek authority before reallocations are done.
iii. The district should prioritize training of staff in financial
management

Query 5.4 Overpayment of Salary


It was observed that the district paid excess of UGX.54.450,679 in
respect of salary contrary to the Standing Orders.
The Accounting Officer stated that deductions are being made from those
who had been overpaid.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.
Query 5.5 Unspent Balances

227
It was observed that the district had unexpended balances of
UGX.1,812,072,691 of which UGX.1,765,395,052 was returnable to the
Consolidated Fund at the close of the year.
For Committee Observations and Recommendations refer to the
Crosscutting issue paragraph 9.

Query 5.6 Abandoned Low cost road sealing


The District contracted a local firms for construction of a Low Cost
Sealing road of 2kms at UGX.363,143,268. The contract was awarded
on 6th June 2014 and completion date was 19th December 2014.
By the time of inspection in August 2015, UGX.104,636,723 representing
(29%) of the contract price had been paid. However, the works had been
abandoned by the Contractor.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

82. OYAM DISTRICT

Query 5.1 Over Payment of Salaries


Payroll analysis carried out revealed that 103 members of staff were
overpaid UGX.68,146,072.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.2Lack of Revenue Registers


For observations and recommendations refer to crosscutting issue paragraph 10
of this report.

228
83. KOLE DISTRICT

Query 5.1Lack of Land Title


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query 5.2 Aboke HC.IV


An audit inspection was carried out on Aboke Health Centre IV and the
infrastructure was found lacking.

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

84. IBANDA DISTRICT

Query 5.1 Non Compliance with Statutory obligations


Query5.1.1 Non-deduction of PAYE
A review of payrolls revealed that UGX.35,798,400 paid as gratuity and
UGX.72,000,000 paid as retainer allowance to staff was not subjected to
Pay As You Earn (PAYE) amounting to UGX.32,170,124.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query5.2 Non-Deduction of Local Service Tax (LST)

A review of the payroll for the period July 2014 to October 2014 revealed
that the district did not levy, charge LST worth UGX.9,245,000 from
some of its staff.

229
For observations and recommendations refer to crosscutting issue paragraph 10
of this report.

Query 5.3 Irregular Payment of Allowance


A review of the payroll for the financial year revealed that a total of
UGX.7,223,750 in form of consolidated lunch allowance was paid to staff
on study leave.

The Committee was informed that that the officers were informed of the
anomaly and letters to effect recoveries were written to them.

The payment of the allowance was irregular.

Recoveries of UGX. 3.9 million have so far been made and will be cleared
by the end of Financial Year 2016/17.

Observation
The Committee noted the progress of the deductions.

Recommendation
The Committee recommends that the recoveries be effected and
completed by the end of this Financial Year.

Query 5.4 Outstanding Mineral royalties


The Ministry Energy and Mineral Development made a public notice on
21/05/2015 in the New Vision indicating that it had paid to the district
UGX.4,095,321 in respect of mineral royalties.

However, a review of the district cash book and bank statement revealed
that the district only received UGX.1,043,391 out of UGX.4,095,321 on
17th April 2015 leaving a balance of UGX.3,051,930 outstanding.

230
The Committee was informed that a follow up with the Ministry of Energy
and Mineral Development was done but to date the payments have not
been made.

Recommendation
The Committee upheld the query.

85. ISINGIRO DISTRICT


Query 5.1 Under Collection of Local Revenue
It was observed that out of the budgeted local revenue of
UGX.948,927,000, only UGX.427,204,909 was realised leading to a
shortfall of UGX.521,722,209 representing 55% of the budget.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.2 Out Standing Salary Arrears


It was observed that salary arrears of UGX.65, 488,850 remained
outstanding at the time of audit.

For observations and recommendations refer to crosscutting issue paragraph 3.3


of this report.

Query 5.3 Unrecovered Salary Payments


Irregular salary payments amounting to 7,903.066 was reported in the
audit.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

231
Query5.4 Unaccounted funds
UGX. 3,492,500 was advanced to a district employee to carry out official
activities remained unaccounted for by the time of audit.

The Accounting Officer explained that the unaccounted for funds were
advanced to a former District Engineer who resigned and that the matter
had been reported to Police.

Observation
The Committee observed that the work of Parliament in regard to audit
queries needs to be harmonized with the work of the IGG.

Recommendation.
The Committee recommends that the query should be dropped because
the Accounting Officer has no avenues of recovering the money from the
individual.

Query 5.5 Understaffing


The district had an appoved staff establishment of 297 positions.
However, out of the approved positions, only 155 (52.2%) positions were
filled leaving 143 (47.8%) posts vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.6 Lack of Information Technology Policy

For observations and recommendations refer to crosscutting issue paragraph 7


of this report.

232
Query 5.7 Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

86. KABALE DISTRICT


Query 5.1 Staff Salary Arrears
Salaries worth UGX.626,759,249for Primary, Secondary & Tertiary
Teachers, Health & District staff were outstanding as at 30th June 2015.

For observations and recommendations refer to crosscutting issue paragraph 3.3


of this report.

Query 5.2 Local Revenue Shortfall


It was observed that out of the UGX.957,189,226 local revenue that was
budgeted for, only UGX.355, 055,508 (37%) was collected leading to
under collection of UGX.602,133,718 (63%).

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.3 Uncollected Rental Revenue


During the period under review, monthly rental deductions amounting
to UGX.58, 167,000 were not effected from staff salaries.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.4 Lack of financial Statements for Health Centres

For observations and recommendations refer to crosscutting issue paragraph 17

233
of this report.

Query 5.5 Understaffing


The district had an appoved staff establishment of 138 positions.
However, only 97 (70%) positions were filled leaving 41 (30%) posts
vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query5.6: Education
Performance of UPE Schools
Education
a) Performance of UPE Schools
For observations and recommendations refer to crosscutting issue paragraph 2
of this report.

Query 5.7 Health Sector

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

Query5.8 Lack of Information Communication Technology (ICT)


policy
For observations and recommendations refer to crosscutting issue paragraph 7
of this report.

Query5.9 Lack of Land Titles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

234
87. KIRUHURA DISTRICT

Query 5.1 Non. Compliance with Statutory Obligations

Query 5.1.1 Untaxed Gratuity And Allowances


It was observed that the district paid UGX.89,651,039 in respect of
gratuity to political leaders and retention allowance to medical doctors
without subjecting the payments to the Pay As You Earn of
UGX.26,895,312.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.2 Failure to deduct WHT


The district did not deduct withholding tax amounting to
UGX.2,013,402.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.3 Outstanding Salary Arrears


It was noted that the district accumulated salary arrears for health staff
and teachers amounting to UGX.294,495,032.

For observations and recommendations refer to crosscutting issue paragraph 3.3


of this report.

235
Query 5.4 Direct Procurements
The district procured supplies and services worth UGX.9,919,000 using
direct procurement method without justification and approval by the
contracts committee.

The Accounting Officer explained that the district did not have approved
providers for the procurements.

The Committee was presented with Vouchers for accountability.

Observations
The Committee observed that:
i. the dates on the vouchers did not tally.
ii. The Accounting Officer flaunted the procurement procedures

Recommendations
The Accounting Officer should recover the UGX. 9,919,000 for which she
failed to account.

Query 5.5Non-Deduction of Local Service Tax


It was observed that the district did not levy and charge local service tax
on some of its employees amounting to UGX 1,920,000.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.6 Inadequate facilities in Primary schools

For observations and recommendations refer to crosscutting issue paragraph 2


of this report.

236
Query 5.7 Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

Query 5.8 Under Staffing


The district had an appoved staff establishment of 356 positions.
However, out of the approved positions, only 148 (42%) positions were
filled leaving 208 (58%) posts vacant with most departmental heads
acting those positions.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.9 Lack of Information Technology Policy

For observations and recommendations refer to crosscutting issue paragraph 7


of this report.

88. SHEEMA DISTRICT

Query 5.1 Payroll Issues

Query5.1.1 Failure to honour staff contractual obligation


A review of the payroll data revealed that various district officers
acquired loans from various financial institutions and the district
guaranteed to remit monthly deductions to the financial institutions.
However, the district did not honour its obligation. The District officers
owed institutions a total sum of UGX.201,181,640in form of monthly
deductions at the time of audit.

237
Failure to deduct the required installments owed to financial institutions
is a breach of the loan agreements and may lead to litigation.

The committee was informed that the district no longer guarantees staff
loans so employees deal directly with the lending organizations.

Observations
The committee observed that there was no documentary evidence that
the district cancelled the guarantees to staff loans that were already
entered into or that the district had started honoring its obligations for
the loans it guaranteed. This could lead to litigation.

Recommendation
The committee upheld the audit query.

Query 5.1.2: Non Deduction of Pay As You Earn (PAYE) on Gratuity


A review of the payroll data revealed that payments of UGX.38, 029,429
were effected as gratuity to political heads of the District. However PAYE
amounting to UGX.11, 408,829 was not deducted from the payments
made.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.2: Non-Compliance with Statutory Obligations


Query 5.2.1 Non Remittance of Taxes

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query5.2.2: Non Deduction of Local Service Tax (LST)

238
The district failed to deduct local service tax from staff for the year under
review amounting to UGX.10,875,000.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5. 3. Lack of Land Titles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query 5.4: Understaffing


The district had an appoved staff establishment of 155 positions.
However, only 87 (56%) positions were filled leaving 68 (44%) posts
vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.5: Lack of an Up to date fixed assets register


For observations and recommendations refer to crosscutting issue paragraph 13
of this report.

Query 5.6: Incomplete Fixed Assets Register at Kitagata Hospital


For observations and recommendations refer to crosscutting issue paragraph 13
of this report.

89. RUBIRIZI DISTRICT


Query 5.1 Lack of Representation of Lower Local Governments on
the Evaluation Committee

239
It was observed that procurements worth UGX.724,027,971undertaken
for Sub-counties were evaluated at the district without representation of
the sub-counties on the evaluation committee.

The Accounting Officer admitted the shortcomings and promised to have


at least a representative of the users nominated to the evaluation
committee for future projects.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.2Outstanding Salary Arrears


A review of the staff records of the entity revealed that salary arrears
remained unpaid at the time of audit.

For observations and recommendations refer to crosscutting issue paragraph 3.3


of this report.

Query 5.3 Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

Query 5.4Lack of Framework Contracts


For the year under review, the district procured fuel, stationery and
repair services from several suppliers worth UGX 29,014,725 without
framework contracts and yet these were supplies of continuous nature.

The Committee was informed that the framework contracts are now in
place and provided evidence.

240
Observation
The Committee was satisfied with the evidence.

Recommendation
The Committee recommends that the query be upheld.

Query 5.5: Human Resource

Query 5.5.1: Understaffing


The district had an appoved staff establishment of 629 positions.
However, out of the approved positions, only 288 (45%) positions were
filled leaving 339 (55%) posts vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

90. KANUNGU DISTRICT

Query 5.1: Under Collection of Local Revenue


The district budgeted for local revenue of UGX.145,000,000, but only
collected UGX.122,710,924 which is (85%) leaving a shortfall of
UGX.22,289,076 representing (15%).

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.2: Understaffing


The district has an appoved staff establishment of 150 positions.
However, only 85 i.e (57%) positions were filled leaving 64 i.e (43%) posts
vacant.

241
For observations and recommendations refer to crosscutting issue paragraph 4
of this report.

Query 5.3: Lack of an Information Communication Technology (ICT)


Policy
For observations and recommendations refer to crosscutting issue paragraph 7
of this report.

91. MBARARA DISTRICT

Query 5.1 Outstanding Salary Arrears


It was observed that the district accumulated salary arrears for health
workers and teachers amounting to UGX.181,341,578.

For observations and recommendations refer to crosscutting issue paragraph 3.3


of this report.

Query 5.2 Accumulated Rental Arrears


Council failed to collect UGX. 67,762,000 from tenants who reside in
councils residential and office blocks.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.1 Lack of Land Titles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

242
Query 5.2: Under Staffing
The district had an appoved staff establishment of 918 positions.
However, out of the approved positions, only 483 (53%) positions were
filled leaving 435 (47%) posts vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

92. BUHWEJU DISTRICT

Query5.1 Under Collection of Local Revenue


The district budgeted to collect local revenue of UGX.183,197,000 but
only collected UGX.105,155,488 representing 57% leading to a shortfall
of UGX.78,041,512 (43%).

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.2 Outstanding Salary Arrears


A review of the employees records revealed that some district employees
had not accessed the payroll resulting into salary arrears of
UGX.136,268,682.

For observations and recommendations refer to crosscutting issue paragraph 3.3


of this report.

Query 5.3: Lack of Land Titles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

243
Query 5.4 : Non- compliance with statutory obligations

Query 5.3.1 Untaxed Allowances


It was observed that UGX.55,164,367 paid as salary arrears, retention
allowance and sitting allowance to staff was not subjected to Pay As You
Earn (PAYE). This resulted into tax arrears worth UGX 8,080,773.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

5.3.1 Non-deduction of Local Service Tax (LST)


A review of payrolls for the period of July 2014 to October 2014 revealed
that the district did not levy, charge and collect LST worth
UGX.4,601,250 from some of its staff.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.5 Under Staffing


The district had an appoved staff establishment of 175 positions.
However, out of the approved positions, only 93 (53%) positions were
filled leaving 82 (47%) posts vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

93. BUSHENYI DISTRICT

Query 5.1: Un Paid Salary Arrears

244
some employees did not access the payroll within the four weeks of
assumpting of duty which led to the accumulation of salary arrears
amounting to UGX.107,570,405.

For observations and recommendations refer to crosscutting issue paragraph 3.3


of this report.

Query 5.2 Salary Over Payment to District Staff


A review of the payroll for the financial year 2014/15 revealed that the
district made overpayments of UGX.16,473,978 to various officers.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.3 Non-compliance with statutory obligations


A review of the payroll revealed that gratuity payments to political leaders
amounting to UGX.9,072,000 were effected without deducting PAYE
amounting to UGX.2,721,600.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.4 Under Staffing


The district had an appoved staff establishment of 629 positions.
However, out of the approved positions, only 454 (72%) positions were
filled leaving 175 (28%) posts vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

245
Query 5.5: Expired Drugs
For observations and recommendations refer to crosscutting issue paragraph 5
of this report.

Query5.6: Lack of an Information Technology Policy


For observations and recommendations refer to crosscutting issue paragraph 7
of this report.

94. RUKUNGIRI DISTRICT

Query 5.1 Rehabilitation of 13.1 km Access roads in Nyarushanje


Sub County.
The inspections carried out on 30th June 2015 on Nyakishenyi Minera
section covering a distance of 5.6 Km and the bridge works revealed poor
workmanship by the Contractor.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.2 Lack of Land Titles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query 5.3 Non Deduction of Local Service Tax (LST)


The district failed to deduct local service tax from staff on its payroll
amounting to UGX. 7,735,000.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

246
Query 5.4 Understaffing
The district has an approved structure of 2,664 staff. However, out of
the approved positions of 2,664 only 2,264 (85%) positions were filled
during the year leaving a balance of 400 (15%) positions vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

95. MITOOMA DISTRICT

Query 5.1 Lack of Land Titles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query 5.2 Under Staffing


The district had an appoved staff establishment of 1,298 positions.
However, only 1,158 (89%) positions were filled leaving 140 (11%) posts
vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.3 Retired Staff on Payroll


The Auditor General reported a payment of UGX. 23,676,147 to retired
staff in the year under review.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

247
96. NTUNGAMO DISTRICT

Query5.1 Lack of Land Titles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query5.2 Non Compliance with the statutory obligations


It was observed that staff were paid transport allowance worth
UGX.27,270,000without deducting PAYE amounting to UGX.8,181,000.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.3 High Drop Out Ratio


For observations and recommendations refer to crosscutting issue paragraph 2
of this report.

Query 5.4 Under Staffing


The district had an appoved staff establishment of 314 positions.
However, only 228 (73%) positions were filled leaving 86 (27%) posts
vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.5 Health Service


For observations and recommendations refer to crosscutting issue paragraph 5
of this report.

Query 5.6 Financial Statements for Health Centres


For observations and recommendations refer to crosscutting issue paragraph 17

248
of this report.

97. KISORO DISTRICT

Query 5.1 Local Revenue Shortfall


The District budgeted forlocal revenue of UGX.524,892,358 but only
collected UGX.302,763,016 leaving a shortfall of UGX.222,129,342
(43%).

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.2 Untaxed Gratuity and Allowances


It was observed that UGX.92,348,838 was paid in respect of gratuity to
political leaders and retention allowance to doctors without subjecting
the payments to PAYE.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.3 Under Staffing


The district had an appoved staff establishment of 372 positions.
However, out of the approved positions, only 209 (56%) positions were
filled leaving 163 (44%) posts vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.4 Lack of Information Technology (IT) Policy


For observations and recommendations refer to crosscutting issue paragraph 7
of this report.

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Query 5.5 Inadequate standards in Primary Schools
For observations and recommendations refer to crosscutting issue paragraph 2
of this report.

Query 5.6 Congestion in Kisoro Hospital


For observations and recommendations refer to crosscutting issue paragraph 5
of this report.

98. BUKWO DISTRICT

Query 5.1 Lack of Performance Guarantees

The Special Conditions of the contract GCC52.1 also required that a


performance security be provided for the contracts above fifty million.
However, it was observed that contracts worth UGX 669,167,530 lacked
performance guarantees.

The lack of contract performance guarantees exposed the district to risk


of losses in the event that contractors failed to effectively perform their
contract obligations.

The Accounting Officer admitted the shortcoming and explained that


contracts were completed within the time specified in the contract
agreement but did not provide project completion certificates.

Observation

The Committee noted that evidence was not provided to the committee.

Recommendation

The Committee upheld the query.

250
Query 5.2 Inconsistencies in Quarterly Salary budgets, Releases
and payments
An analysis of the districts annual wage budget of UGX 9,786,138,132
and the quarterly budgeted release of UGX 2,446,534,533 revealed
discrepancies between budgeted figures, quarterly releases, and actual
payments.

The Accounting Officer explained that whereas Ministry of finance was


expected to allocate a budget to the district in line with the payroll
provided by Ministry of Public Service at the beginning of the financial
year, Ministry of Finance released funds based on monthly cash flow
advice from the Ministry of Public Service which was not correct as
Ministry of public service deletes staff from the payroll without the
knowledge of the accounting officer, hence creating the variation.

The Committee was informed that this arose from a number of staff,
mostly teachers who were deleted from the payroll due to loans well
above 50% of their salaries

Recommendations
The Committee upheld the query.

Query 5.3 Non maintenance of Motor vehicle log books


Audit observed that there were no vehicle movement registers maintianed
to record the movement of the district vehicles. In the absence of the
vehicle logbooks, audit was not able to confirm that fuel UGX.
208,878,020 was used on solely on district.

For observations and recommendations refer to crosscutting issue paragraph 14


of this report.

251
Query 5.3 Evaluation of Internal Audit Function
A review of the function of Internal Audit revealed the following
shortcomings;

i. Understaffing

According to the organization structure, the department is supposed to


have three technical staff namely; the Chief internal auditor, the auditor
and examiner. However, the position of the internal auditor was vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Underfunding

The department budgeted for a total amount of UGX. 57,051,000.


However, out of the budgeted UGX.57,051,000 only UGX. 29,787,434
was provided representing only 52.2%. The underfunding was attributed
to failure by the district to collect adequate local revenue. The
department is funded from local revenue.

Recommendation
The Committee upheld the query

iii. Lack of Audit Documentation

The work of Internal Audit was not documented Audit Working Paper
Files rendering the conclusions unreliable.

Recommendation
The Committee upheld the query

252
Query 5.5 Assessment of the Performance of the Local
Governments Public Accounts Committee (LGPAC).
Section 16 of the Local Government Financial and Accounting Regualtion
2007 require that the Local Government Public Accounts Committee
(LGPAC) to examine the reports of the Auditor General, the need of
internal audit and any other reports of commision of enquiry and
produce a report for submission to Council and the Ministry. It was
however observed that no LGPAC, reports were submitted to the district
Council for consideration.

This weakens the oversight function.

The Accounting Officer explained that he had since written to LGPAC to


have the reports discussed for their onward submission to the district
council for consideration.

The Committee upheld the query.

Query 5.8 Unaccounted for Administrative Advances


It was observed, that a sum of UGX. 1,870,000 remained unaccounted
for at the time of audit.

The Committee upheld the query

99. BULAMBULI DISTRICT

Query 5.1 PAYROLL AUDIT


Query 5.1.1 Over payment of salary
Payroll analysis carried out revealed that 264 members of staff who were
supposed to earn salaries amounting to UGX.100,213,881 according to

253
their scale were instead paid UGX.132,868,320 resulting into a salary
overpayment of UGX.32,654,439.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.2 Funds not Properly Accounted for

Query 5.2.1 Unaccounted for funds


A sum of UGX.5,937,000 advanced to council employees remained un
accounted for at the time of audit.

The Committee was informed that UGX 720,000 under Khanka Rogers
that wasnt accounted for was not for stationery, printing, binding,
photocopying and fuel but was for payment of allowances

Observations
The Committee observes that the documentation provided had
discrepancies and looked forged.

Recommendations
The Committee recommends that UGX 5, 935,000 be refunded by the
CFO and Internal Auditor.

Query 5.2.2: Incompletely Vouched Expenditure


It was observed however, that a sum of UGX 41,329,230spent on various
activities was not adequately supported with accountability documents
and acknowledgment receipts as contrary to the Regulations.

Observation
The Committee observed that the documents submitted appeared forged

254
and suspect.

Recommendations
The Committee upheld the query.

Query 5.3 Understaffing


The district has an approved structure of 1,601 staff. However, out of the
approved 1,601 positions, only 1146 (71%) were filled leaving 465 (29%)
positions vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.4 Lack of Land Title


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query 5.5 Service Delivery

Query 5.5.1 Mayembe Health Centre IV


For observations and recommendations refer to crosscutting issue paragraph 5
of this report.

Query 5.6 Functioning of DPAC


Section 88 (7&8) of the Local Governments Act,1997, requires the
District Public Accounts Committee (DPAC) to examine the reports of the
Auditor General, chief internal auditor and any reports of Commissions
of inquiry and submit its report to the council and to the Minister
responsible for Local Governments. Contrary to the Act, it was observed
no quarterly internal audit reports for the financial year 2014/15 had
been discussed. The Accounting Officer attributed the shortcoming to

255
inadquate funding due to poor local revenue base and budget cuts on
central government funds.

Delays by District Public Accounts Committee (DPAC) to discuss the


Internal Audit reports undermines the committees role of ensuring
effective financial management and service delivery.

Recommendation
The Committee upheld the query

100. BUSIA DISTRICT

Query 5.1.1 Under Collection of Local Revenue


Out of the budgeted Local Revenue of UGX. 438, 671,200 only
UGX.164,498,335 (37%) was realized leading to a shortfall of UGX.247,
172,865 (62.5%).

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.1.2 : Lack of Proper Assessment of Council Revenue


local revenue assessment was not conducted in the District for the year
under review contrary to the regulations.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.1.3: Delayed Implementation of the Property Rates


Valuation
It was observed that a valuation list/report was received by the district
on 11/02/2014, but no further activity has taken place to date (1 year

256
and 5 months down the road) despite the fact that the district had
budgeted UGX 29,500,000 for the activity. The delayed completion of the
process directly translates to loss of revenue to the district.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.1.4: Failure to remit shared Local Revenue from Sub


Counties
It was observed that an amount of UGX.10,227,000 had not been
remitted to the district.

Recommendation
The Committee upheld the query.

Query 5.2: EXPENDITURE

Query 5.2.1: Un-accounted for Funds


It was noted that UGX 4,965,500 paid out for various activities during
the year under review remained un-accounted for by the time of audit.

The Accounting Officer explained that accountabilities were available but


the accountabilities were not presented for audit verification.

Observation
The Committee noted that the Accounting Officer was unable to respond
to the query.

Recommendation
The committee recommends that the accounting officer recovers all the
monies UGX 4.965million

257
Query 5.2.2: Incompletely Vouched Expenditure
It was observed that a sum of UGX. 6,387,080lacked the necessary
supporting documents.

The Accounting Officer explained that the missing documents were


available but were not presented for audit verification.

The Accounting Officer submitted the said documents to the Committee.

Observation
The Committee was not satisfied with the documents.

Recommendation
The Committee recommends that:
i. The query be upheld
ii. The Accounting Officer recovers the UGX 6.387million

Query 5.2.3: Doubtful Tax Remittances


It was observed that payments amounting to UGX 5,923,000 purportedly
paid to URA lacked acknowledgment receipts.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.3: Procurement

Query 5.3.1: Irregular Constitution of the Evaluation Committee

Evidence provided in Minute 3 of the 1st DCC meeting of 15/07/2014,


revealed that the secretary District Contracts Committee, Mr. Olowo

258
Appollo was appointed to the Evaluation Committee for the rehabilitation
of community access roads.

The Accounting Officer explained that her decision was based on


Regulation 15 requiring her to nominate persons to the Contracts
Committee for the approval of the Secretary to the Treasury.

Observation

The Committee was not satisfied with the explanation

Recommendation

The committee recommends that the accounting officer be cautioned.

Query 5.3.2: Unsupported Evaluation reports


Audit of Twenty one (21) procurement files worth 1.6bn revealed that
whereas evaluation reports had been prepared, there were no individual
score sheets to support the results as required by the regulations.

Observation

The Committee was not satisfied with the explanation.

Recommendation

The committee recommends that the accounting officer be cautioned and


desist from deviating from procurement procedures.

Query 5.4 SERVICE DELIVERY

Query 5.4.1: Health Services

Inspections were done on Majanji HC II, Masafu Hospital and other three

259
non functional health centers.

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

101. BUTALEJA DISTRICT

Query 5.1.1 Unsupported Payment of Salary Arrears

Audit revealed that on 13th January, 2015, the Accounting Officer


submitted a request for payment of salary arrears amounting to
UGX.563,921,414 out of which UGX 219,432,034 was paid leaving a
balance of of UGX.344,489,380 outstanding. The arrears relate to
financial years (1999-2014).

For observations and recommendations refer to crosscutting issue paragraph 3.3


of this report.

Query 5.1.2: Over-payment of salary

It was observed that council paid an excess of UGX 47,936,821 in


respect of salary contrary to the standing orders.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.2 Unaccounted for Advances


It was, observed that a sum of UGX.20,431,500 remained unaccounted
for at the time of audit.

Observation
The Committee observed that no accountability documents were

260
submitted.

Recommendation
The committee upheld the query and therefore recovery be immediately
effected by the accounting officer

Query 5.3 Weak Controls over Fuel Use


It was observed that management spent a sum of UGX. 152,610,618 on
fuel without maintaining logbooks and fuel orders for purposes of
monitoring the motorvehicle movements and fuel usage.

For observations and recommendations refer to crosscutting issue paragraph 14


of this report.

Query 5.4 Assessment of the Internal Audit Function


A review of the Internal Audit function revealed the following
shortcomings;
The departments work plan included plans to audit schools,
health centers and sub counties. However, no reports were
presented for audit verification.
The work of Internal Audit lacked Audit Working Paper Files
rendering the conclusions made unreliable.

The weaknesses were attributed to possible capacity gaps and this


weakens the internal control at the District.

The Committee was informed that at the time of audit the headed audit
working papers were not in place though however the formatted working
papers were now in place and the audit capacity gap had now been filled
up with the recruitment of one extra examiner of accounts

261
Recommendation
The Committee recommends that the query be dropped.

Query 5.5 Lack of Information Technology Policy


For observations and recommendations refer to crosscutting issue paragraph 7
of this report.

Query 5.6 Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

102. KAPCHORWA DISTRICT

Query 5.1 Failure to Repay Unspent Balances to the Consolidated


Fund.
A review of the financial statements revealed that there was unspent
balance of UGX 237,345,720 at the closure of the year. However, these
funds had not been returned to the Consolidated at the time of audit.
The district appears to have a low absorption capacity.

For observations and recommendations refer to crosscutting issue paragraph 9


of this report.

Query 5.2 Un-supported Payables


A review of financial statement revealed that the district had UGX
130,201,210 committed creditors at the year end.

For observations and recommendations refer to crosscutting issue paragraph 14


of this report.

262
Query 5.3 Un-clear Payment of Domestic Arrears
A review of the Cash flow statement indicated that the district paid
domestic arrears amounting to UGX.53,465,507 as domestic arrears.
However, no details in form of a schedule and evidence of existence of
arrears were not provided for audit verification.

The Accounting Officer explained that these were direct payments that
included payments to staff for their arrears but no supporting evidence
was provided for verification.

The Committee was informed that: -

i. The financial system had recognized that 53,465,507 had


been paid in domestic arrears which wasnt the case
ii. The district had sought for technical support from the
Ministry of Local Government which promised to support the
district to address the anomaly

Observations

The Committee observes that whereas the Accounting Officer was aware
of the Local Government Act and its provisions on tax revenue, he did
not advise Council on the illegality of the tax.

The Committee further observes that the entity risked lawsuits brought
against it by contractors on account of illegality of a tax imposed on
them.

Recommendations

The Committee upheld the query.

263
Query 5.4 Funds not Accounted for

Query 5.4.1 Incompletely Vouched Expenditure


Vouchers amounting to UGX 17,464,343 lacked the necessary
supporting documents.

Observations
The Committee observes that the documents submitted appeared forged
and suspect without any supporting documentation

Recommendations
The Committee recommends that the Accounting Officer to recover UGX
17, 464, 343 with immediate effect.

Query 5.4.2 Un-Accounted for Administrative Advances


UGX.12,405,500 advanced to district officers remained unaccounted for
by the time of audit.

The Committee noted that the Accountabilities presented appeared


forged without any proper explanation.

Recommendation
The Committee recommends that the Accounting Officer recovers the
funds with immediate effect

Query 5.4.3 Missing vouchers


Payment vouchers under various departments totaling UGX
7,077,176were noted missing and therefore not availed for audit.

264
Observation
The missing vouchers were availed except the committee was not
satisfied with the voucher for a sum amount UGX 1,229,684.

Recommendation
The committee recommends that the accounting officer recovers the
whole amount of UGX 1,229,684 immediately.

Query 5.5 Delayed Completion of Construction of a Two (2)


classrooms & office block at Chebelat P/S.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.6 Failure Dispose Off Assets


It was observed that grounded vehicles and motor cycles which had been
recommended for boarding off by the Board of Survey in its report for the
financial year 2013/2014 had not been boarded off at the time of audit.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.7 Delayed deletion of retired staff from the payroll


It was however established that there was delays in deleting retired staff
from the Payroll which resulted in loss of UGX.2, 883,679.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

265
103. KWEEN DISTRICT

Query 5.1 Unsupported Settlement of Domestic Arrears

Payment note 14 to the Cash flow statement shows that the district paid
a total of UGX.172, 896,375 as domestic arrears. However, the
supporting documents were not presented for audit verification rendering
expenditure doubtful.

The Accounting Officer explained that the arrears related to salaries but
no documentary evidence was availed for audit verification.

The Accounting Officer submitted the documents for verification.

Observation
The Committee was satisfied with the documents

Recommendation
The Committee recommends that the query be dropped.

Query 5.2 Over payment of salary


An analysis carried out on the payroll for the Financial Year 2014/2015
revealed that the District paid salary amounting to UGX 24,739,485 to
employees over and above the approved salary scale.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

104. KIBUKU DISTRICT

Query 5.1 Local Revenue Shortfall

UGX 119,896,000 was budgeted for, but only UGX 74,947,000 was

266
realized leading to a shortfall of UGX 44,949,000.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.2 Incompletely Vouched Expenditure

It was observed that a sum of UGX 22,250,000 lacked accountability


documents.

Observation
The committee observes there was both lack of proper explanation and
supporting documents

Recommendation
The committee recommends that the accounting officer recovers the
whole amount of UGX 22,250,000

Query 5.2 Procurements

Query 5.2.1 Unapproved Micro Procurements

It was observed that monthly reports on micro procurements worth UGX


22,707,250 were not prepared and reported to the contracts committee
for approval.

The responsible Officer that is the Procurement officer was not available
to respond.

Recommendation
The Committee directed that the Accounting Officer prevail upon the
procurement officer to respond or else refund the monies used worth

267
UGX 22,707,250.

105. MANAFWA DISTRICT

Query 5.1 Funds not Properly Accounted for


Query 5.1.1 Unaccounted for Advances
A sum of UGX13, 321,500 remained unaccounted for at the time of
audit.
The Committee was informed that at the time of audit council officers
had received administrative advances but had not yet availed
accountabilities.

The Committee was availed with the accountabilities

Observations
The Committee found the accountability for UGX 13, 321,500 doubtful.

Recommendation
The Committee directed that the Accounting Officer recover the funds
amounting to UGX 13, 321,500 from the responsible officers

Query 5.1.2 Incompletely Vouched Expenditure


An amount of UGX 53,369,800 was paid out for various activities
without relevant supporting documentation.
The Committee was presented with the vouchers.

Observation
The Committee scrutinized the accountabilities presented and they were
doubtful.

268
Recommendation
The Committee recommends that the accounting Officer recovers the
total amount of UGX 53,369,800 immediately.

Query 5.2 Understaffing


The district has an approved structure of 2,787 staff. However, out of the
approved staff of 2,787, only 1,753 (62 %) were filled leaving 1,034 (37 %)
positions vacant.
For observations and recommendations refer to crosscutting issue paragraph 4
of this report.

Query 5.3 Review of the Internal Audit Function


Evaluation of the department revealed the following;

i.Under Funding
Out of the UGX 25,258,000 provided for in the budget, only UGX10,
183,000 was released representing only 40% of the budget. A weak
internal audit function undermines internal controls.

The Committee upheld the query.

ii. Under Staffing


The Unit lacked a substantive head and was operating with only 3 staff,
out of the five approved position representing 40% understaffing.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

iii. Failure by management to discuss the Internal Audit reports


Management failed to discuss the internal Audit reports produced during
the financial year contrary to Section 1.6.3 of the Local Governments

269
Internal Audit Manual, 2007. Failure to discuss and implement
recommendations of the internal audit renders its functionality
irrelevant.
The Accounting Officer admitted the shortcomings and promised to
discuss the reports and implement all the recommendations therein.

Observation
The Committee was not satisfied with the explanation

Committee Recommendations
The Committee upholds the query.

Query 5.4 Lack of Land Title

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

Query 5.5 Delayed Completion of Civil works at Bukimanya Health


Centre III
The district contracted Local Contractor to construct Bukimanya HC III
at a contract price of UGX.179, 262,236 in 2010/2011 financial year. By
time of inspection in September 2015 a sum of UGX.170, 299,000 had
been paid leaving only UGX.8, 963,236. However, inspection revealed
that the building had stalled, appeared to have been abandoned and had
developed cracks.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

270
106. PALLISA DISTRICT

Query 5.1 Funds not properly accounted for


Query 5.1.1 Lack of Acknowledgement Receipts from URA
It was observed that UGX. 37,307,015 deducted from employees as PAYE
was not supported by URA acknowledgment receipts.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.1.2 Incompletely Vouched Expenditure


it was observed that a sum of UGX.36, 657,650 was not adequately
supported with accountability documents

Observation
The Committee was not given a satisfactory explanation.

Recommendation
The committee recommends that the Accounting Officer recovers all the
funds from the officers with immediate effect amounting UGX.36,
657,650.

Query 5.1.3 Un accounted for Funds


It was observed that UGX. 8,154,000 advanced to various officers
remained unaccounted for by time of audit.

Observation
The Committee was not given a satisfactory explanation.

Recommendation

271
The committee recommends that the funds be recovered immediately

Query 5.2 Local Revenue Shortfall


UGX 759,435,000 was budgeted for, but only UGX 195,220,750 (25.7%)
was realized leading to a shortfall of UGX 564,214,250 representing
74.3% under performance.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.3 Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

107. TORORO DISTRICT

Query 5.1: Payroll Audit

Query 5.1.1: Overpayment of salary


Payroll analysis carried out revealed that 1,230 members of staff who
were supposed to earn salaries amounting to UGX.969,759,052
according to their scale were instead paid UGX.1,436,516,721 resulting
into a salary overpayment of UGX. 533,242,331.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.1.2 Retired staff still accessing payroll


A number of persons supposed to have retired during the year remained
on the payroll for several months receiving salaries amounting to

272
UGX.75,179,202.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.2 Funds not Properly Accounted for


Query 5.2.1 Lack of Acknowledgement Receipts from URA
It was observed that UGX 65,940,400 purportedly paid to URA lacked
acknowledgement receipts.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.2.2 Un-Accounted for Administrative Advances


It was observed that UGX.49,388,363remained unaccounted for by the
time of audit.
The Committee was presented with accountabilities for all the advances
except UGX 640,000 which was advanced to the then RDC under PRDP
project.

Observation
The Committee was satisfied with the accountabilities execpt the one of
the RDC (Ms Ajilong Bessy)

Recommendation
The Committee recommends that the Accounting Officer recovers the
UGX 640,000 from the then RDC immediately.

Query 5.2.3 Incompletely Vouched Expenditure


Payment vouchers worth UGX. 80,342,500lacked the necessary
supporting documents.

273
The Committee was presented with accountabilities.

Observation
The Committee was not satisfied with the accountabilities.

Recommendations
The Committee recommends the accounting officer recovers the funds
immediately amounting to UGX. 80,342,500

Query 5.3 Failure to maintain contract management records


It was observed that in a sample of 14 contracts valued at UGX.1,
457,758,987 the contract management records were not properly
maintained. The documents including; implementation plans, site
minutes, work records and related contract work progress reports for
contracts undertaken were not presented for audit verification.

Observation
The Committee was not provided with the relevant documents.

Recommendation
The Committee upheld

Query 5.4 Failure to collect property rates/taxes


The district set out to collect property tax and demand notices were
issued for UGX.670, 626,897, for the FY 2014/2015, but realized only
UGX.270, 209,017 leaving a balance of UGX.400,417,880 by the end of
the year.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

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Query 5.5 Under Staffing

The district has an approved establishment of 2119 staff. However, out


of the approved 2119 staff only 1723 (81%) were filled leaving 396 (19%)
vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.6 Failure to Dispose off Assets


A review of the districts vehicle fleet revealed a number of grounded
vehicles and motorcycles which should have been disposed of. It was
observed that some of the said vehicles and motorcycles have since been
vandalized.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

108. SIRONKO DISTRICT

Query 5.1 Unaccounted for Funds

Query 5.1.1 Incompletely Vouched Expenditure

.it was observed that a sum of UGX 35,420,000lacked accountability


documents.

The Accounting Officer presented the vouchers and alledged


accountabilities to the Committee.

Observation

The accoutabilities were not satisfactory because of inconsistencies

275
Recommendations

The Committee recommends that the Accounting Officer refunds the


UGX. 34,420,000

Query 5.1.2 Un accounted for advances

It was observed that a sum of UGX 33,072,000 remained unaccounted


for at the time of audit.

Observation

The accountabilities were not satisfactory because of inconsistencies

Recommendations

The Committee recommends that the Accounting Officer refunds the


UGX. 33,072,000 immediately

Query 5.1.3 Lack of Acknowledgement Receipts from URA


It was observed that a sum of UGX 11,705,741purportedly paid to URA
in respect of PAYE and WHT lacked acknowledgement receipts rendering
the payments doubtful.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.2 Irregular 2% Development Tax


It was observed that a sum of UGX.19,811,244 was collected by the
district.
For observations and recommendations refer to crosscutting issue paragraph 8
of this report.

Query 5.3 Lack of Land Titles

276
For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query 5.4 Failure to maintain a Contracts Register


It was observed that contracts registers were not being maintained. This
irregularity was attributed to poor coordination between PDU and
various departments. Departments were not availing requisite
information to PDU.
For observations and recommendations refer to crosscutting issue paragraph 12
of this report.

Query 5.5 Audit Inspection Budadiri Health Centre IV

Lack of Minimum Basic Requirments

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

Query 5.6 Failure to maintain Log Books

Vehicle movement log books were not availed for audit verification.

For observations and recommendations refer to crosscutting issue paragraph 14


of this report.

Query 5.8 Review of Financial Statements

Query 5.8.1 Local Revenue Shortfall

It was observed that out of the budgeted sum of UGX 926,982,743 only
UGX 460,239,253 was realized leading to a shortfall of UGX 466,743,490
representing 50.4%.

277
For observations and recommendations refer to crosscutting issue paragraph 10
of this report.

Query 5.8.2 Failure to recover salary Advances

Financial statements indicated outstanding advances amounting to UGX


7,335,473 that have remained outstanding for more then one Financial
year.

Observation

The Committee was not presented with evidence of recovery.

Recommendation

The Committee upheld the query.

Query 5.8.3 Long Outstanding Salary Arrears

It was noted that the district accumulated salary arrears for employees
amounting to UGX315,193,294.

For observations and recommendations refer to crosscutting issue paragraph 3.3


of this report.

Query 5.8.4 Long Outstanding Creditors

A review of the financial statements revealed that Creditors totaling to


UGX 39,754,700 have been outstanding for over 9 years.

For observations and recommendations refer to crosscutting issue paragraph 15


of this report.

278
109. BUDAKA DISTRICT

Query 5.1 Funds not Accounted for

Query 5.1.1 Un- accounted for Administrative Advances

It was however observed that a sum of UGX 18,124,000 advanced to


various officers remained unaccounted for at the time of audit.

Observation

This practice is irregular as there is no council money budgeted for staff


advance and the practice infringe on council development programs end
up delaying works or projects

Recommendation

The committee recommends that the accounting officer recovers all the
monies amounting UGX 18,124,000 with immediate effect.

The Committee noted that staff paid money in advance to purchase


property that was due for boarding off, and until now the property had
not been boarded off.

The accounting officer and the chairman of the district are responsible
for enticing the staff with advance deposit.

Recommendation

The committee recommends that the Accounting Officer and the


chairperson should be held liable..

Query 5.1.2 Incompletely Vouched Expenditure

It was observed that an amount of UGX.3,082,000 lacked payment


vouchers and the necessary supporting documents.

279
The Committee was presented with vouchers for the expenditures.

Observation
The committee observed with serious concern the manner in which
public funds were being abused in Budaka district

Recommendation
i. Mr. Ndoboli and the CFO should refund UGX. 812,000 for
paying safari day allowance for a meeting held at their station.
ii. The Committee recommends that the Accounting Officer
recovers the UGX. 1,374,000 from

Query 5.2 Understaffing

The District Council has an approved structure of 530 approved


positions. However, out of the approved 530 positions, only 303
positions were filled, leaving 228 posts vacant, representing 47% of the
establishment.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.
.

Query 5.3 Lack of an ICT Policy

For observations and recommendations refer to crosscutting issue paragraph 7


of this report.

5.4 SERVICE DELIVERY

5.4.1 Non-Functioning Health Centre Mugiti HC III

It was observed that the district constructed and completed Mugiti HC III

280
at a cost of UGX.292,468,766.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.4.2 Incomplete staff house at Mugiti H/C III

Ms. Buyela Building Contractors Ltd was awarded a contract for the
construction of staff house at Mugiti H/C III at a contract sum of UGX.
66,666,667. The project was scheduled to start on 15/07/2014 and be
completed by 15/02/2015.

However, at the time of the Audit inspection on 8th July 2014, UGX
41,350,551 (62%) had been paid to the contractor and the project was
still incomplete despite expiry of the period. Further there was no
evidence on file to show that approval of extension of the contract period
was granted.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.4.3 Maintenance of Iki-iki -Budaka road 12.5 Kms

An amount of UGX 175,229,900 was spent towards periodic


maintenance of Iki-iki-Budaka road (12.5km) under force account.
However, Audit inspection carried out on 7th July 2015 revealed the
following shortcomings:-

Only 6 out of 36 culverts had been installed. The rest were


abandoned as can be shown in the photograph below.

Headwalls were poorly constructed as can be seen in the


photograph below.

281
Records had indicated that Gravel worth of UGX. 163,481,000
were purchased but there was no evidence of receipt.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.4.4 Completion of floor tiling at Naboa HC III


MS Half London Engineering and Consult Ltd was contracted at UGX.9,
922,500 for the above works and by the end of the financial year
2014/15, UGX. 1,011,740 were still outstanding. Inspections of the
works revealed that the tiles were already breaking even before the
facility has been put to use.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

110. BUDUDA DISTRICT

Query 5.1 Unaccounted for Funds

Query 5.1.1 Un- accounted for Advances

It was, observed that, a sum of UGX 69,632,147advanced to various


officers for executing council activities remained unaccounted for at the
time of audit.

The Accounting Officer submitted the accountabilities.

Observations

The Committee was not satisfied with the accountability.

Recommendation

282
The Committee recommends that the Accounting Officer recovers the
total amount of UGX 69,632,147 immediately.

Query 5.1.2 Incompletely Vouched Expenditure

It was observed that UGX 42,481,410lacked the necessary supporting


documents.

The Committee was presented with vouchers.

Observation
The Committee was not satisfied with the vouchers.

Recommendation
The Committee recommends that the Accounting Officer recovers the
UGX. 42,481,410 immediately

Query 5.1.3 Lack of Acknowledgement Receipt for Tax


Remittance

UGX. 11,321,359 deducted from suppliers as WHT was not supported


with URA acknowledgement receipts.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.1.4 Missing Vouchers

Payments totaling to UGX5,746,800were not supported bypayment


vouchers.

283
The Accounting Officer did not submit any supporting documents.

Recommendations
The Committee recommends that:
i. The query be upheld .
ii.The Accounting Officer immediately recovers the UGX5,746,800.

Query 5.2 Staffing Gaps

The district has an approved staffing structure of 1087 staff. However,


out of the approved 1087 positions only 938 (86%)positions were filled
leaving 148 posts vacant which represents 14% of the establishment.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.3 Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.
.

Query 5.4 Evaluation of Internal Audit Department


Out of a budget of UGX 50, 614,000 only UGX 39,350,475 was provided
leaving a a balance of UGX 11,263,525. A weak internal audit function
compromises internal controls and could result in future to detect fraud
and errors.

The Accounting Officer attributed the underfunding to a poor local


revenue base and also indicated that a recruitment plan had been
generated and forwarded to the Ministry of Public Service for approval.

284
Recommendation
The Committee upheld the query.

Query 5.5 Service Delivery

Query 5.5.1 Health Sector

Inspection of Bududa Hospital and Bulucheke Health Centre III found


the facility in a poor state.

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

Query 5.5.2 Works

a) Installation of Solar System for ProductionDepartment -

A contract was awarded to Supreme Power Enterprises Ltd to install the


solar system at a contract sum of UGX 18,844,000 on 12th February
2015 and had been fully paid. However, audit inspection of the solar
system by the time of audit on 18/8/2015 had shortcomings.

The four solar modules/mono/poly solar cells of 240 watts


costing UGX 4,800,000 were not installed.

The 5 installed sockets were not functioning.

Wires and cables 1.5 and 2.5mm, single and twin, M/strand
were not installed in the entire building.

The Committee was informed that the contractor went back to the site
and provided a solar system with a six months guarantee.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

285
111. MBALE DISTRICT

Query 5.1 REVENUE MANAGEMENT

Query 5.1.1 Outstanding Revenue Arrears

A review of the statement of arrears of revenue revealed that the district


had outstanding revenue amounting to UGX 1,026,358,254.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.2 Funds not properly accounted for

Query 5.2.1 Incompletely Vouched Expenditure

A sum of UGX 13,831,850was spent on various activities, but the


expenditure was not adequately supported with accountability
documents and acknowledgment receipts.

The Committee was presented with the expenditure vouchers.

Observations

The Committee found the vouchers doubtful.

Recommendations

The Committee upheld the query to have the sum of UGX 13,831,850
recovered immediately.

Query 5.2.2 Funds un accounted for

It was observed that UGX 10,577,850remained accounted for by the time


of audit.

The Committee was presented with accountabilities.

286
Observations
The Committee observes that the Accountability was fraudulent.

Recommendations
The Committee recommends that:
i. The query be upheld.
ii. The Accounting Officer immediately recovers the UGX. 10,577850

Query 5.3 Long Outstanding Staff Salary Arrears

It was observed that the District had accumulated salary arrears of


UGX18,883,372 since 2007/08 to date.

For observations and recommendations refer to crosscutting issue paragraph 3.3


of this report.

Query 5.4 Lack of Risk Management Policy

The Head of Finance is responsible for advising on risk management and


effective systems of internal control. This role is carried out in
collaboration with the Internal Audit function. These arrangements need
to ensure compliance with all applicable legislation and regulations, and
other relevant statements of best practice, and ensure that public funds
are properly safeguarded and used economically, efficiently, and
effectively in accordance with the statutory and other provisions that
govern their use.

It was observed that the District did not have a risk management policy
in place.

The Accounting Officer informed the Committee that the policy was
developed, tabled before council and approved.

Observation
The Committee was satisfied with the progress.

287
Recommendation

The Committee recommends that the query be dropped

Query 5.5 SERVICE DELIVERY ISSUES

Query 5.5.1 Inspection of Nakaloke Health Centre III

The inspection of Nakaloke Health Center revealed poor infrastructure,


facilities and equipment.

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.
.
Query 5.5.2 Project Implementation

Inspection was carried out on a sample of projects carried out during the
Financial Year revealed that two projects namely; Construction of motor
bike ambulance shade at Bumadanda and Nakaloke HCIIs and
Construction of 5 stance lined pit latrine at Nabiiri Primary School had
been abandoned by the contractors before completion.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

B. MUNICIPAL COUNCILS

1. ARUA MUNICIPALITY

Query 5.1 Status of Uganda Support for Municipal Infrastructure


Development Program (USMID) Project Implementation

288
For observations and recommendations refer to crosscutting issue paragraph 1.3
of this report.

Query 5.2 Delayed Completion of Afra Road


The maintenance of Afra road (0.5 km) was done using Force on Account
mechanism at UGX 616,977,880 using Uganda Road Fund. The scope of work
involved grading, formation and shaping of road, application of 2 seals,
construction of head walls & wing walls on culvert lines, installation of culvert
lines on road and access road, supply of some construction lines and
relocation of utilities and installation of street lights.

It was observed that at time of inspection, the Council had spent UGX
489,783,196, however, according to the bills of quantities the f works had not
yet been completed.

Observation
The Committee learnt that the works have been ongoing for three years and
observed that for works on half a Km of road to run for 3 years and still remain
incomplete is unacceptable.

Recommendation
The Committee recommends that the matter be investigated with a view to
prosecution.

Query 5.3. Under Staffing


The Municipal Council had an approved structure of 232 staff. However, out of
approved posts, only 135 posts had been filled leaving 106 posts vacant
representing 46% of approved structure.

For observations and recommendations refer to crosscutting issue paragraph 4

289
of this report.

Query 5.4. Value For Money Findings on Infrastructure Projects


Value for money audit were carried out on infrastructure projects in the
Municipality.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

2. FORT PORTAL MUNICIPALITY

Query 5.1 Lack of Revenue Registers


Paragraph 4.6.2 (2) of the Local Governments Financial and Accounting
Manual 2007, (LGFAM 2005) requires each source of revenue to be maintained
in a separate Revenue Register clearly indicating the amounts received, the
amount due, payer, date when collection was made and receipt number.
However, revenue details were not fully recorded and each source of revenue
was not maintained in a separate revenue register contrary to the
requirements.
In the absence of revenue registers it is difficult to monitor and assess the
performance of each revenue source.

The Accounting Officer explained that a team has been put in place to generate
the registers in the required format.

The Committee was informed that:


i. At the time of audit the Revenue Registers were in place but
format was wrong. It was a capacity problem but the
Municipality has now recruited the right staff.
ii. In Financial Year 2015/16 the Municipality constituted a team
to make an assessment of all revenue sources and compile

290
revenue registers.
iii. The arrears were compiled.
iv. In regard to rent arrears the Committee was informed that
there is controversy of the ownership of the estate. At some
point the Central Government claimed it but later it was
established that it belongs to council. At the time of the
uncertainity arrears accumulated.
v. The market had wrangles and revenue was lost.
vi. The Committee sought information about Mbana Properties and
was informed that It is firm that helps collect property rents
from UMEME

Observation
i. The Committee observes that the Accounting Officer takes
responsibility for the accumulation of rent arrears arising from
negligence.
ii. Contract terms with the tenants are not clear so there seems to
be connivance to defraud the Municipality of revenue.
iii. The Committee notes that there is under collection, under
estimation and under declaration of revenue.
iv. The Committee observes that there is laxity in the enforcement
unit.

Recommendation
The Committee recommends that:
i. The Accounting Officer takes responsibility for what should have been
collected coz of negligence.
ii. Law enforcement Officer be held responsible for non compliance and
sanctions must be put and evidence shown by November 30th 2016.
iii. The Accounting Officer should ensure that the enforcement unit
performs its role and all revenue arrears are collected. If need be the

291
debtors should be sanctioned.
iv. The Accounting Officer submits details of all companies contracted to
collect revenue and the council minutes awarding the contracts.
v. The Accounting Officer should ascertain how much revenue could have
been lost.
vi. The Auditor General should conduct a Special Audit on markets under
the World Bank.

Query 5.2 Payments Direct from General Fund Account


A total of UGX 65,003,954 was spent directly from the General Fund Account.

The Accounting Officer informed the Committee that he noted the anomaly
after audit and he cautioned the Treasurer.

Observation
The Accounting Officer is responsible for the anomaly because he should have
supervised. Caution for such an offence is too lenient.

Recommendations
The Committee recommends that the Accounting Officer takes responsibility
for the anomaly

Query 5.3 Under collection of Local Revenue


Council had an approved budget of UGX.2,825,375,323 out of which only
UGX.1,454,981,475 was realized resulting in a shortfall of UGX1,370,375,848
representing a 49% under collection.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

292
Query 5.4 Unsupported Salary Arrears
A total of UGX 4,867,366 was paid to employees as salary arrears. However,
the payments were not supported by approved claim forms.

The Accounting Officer explained that for the arrears paid without supporting
documents, recoveries shall be effected.

Observation
Payments without approved claims are irregular.

Recommendation
The Committee recommends that the Accounting Officer recovers the money
immediately.

Query 5.5 Salary Overpayments


It was observed that a total of UGX 10,622,114 was paid to employees over and
above their net pay as reflected on the monthly payrolls.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.6 Status of Uganda Support to Municipal Infrastructure


Development Program (USMID) Project Implementation

For observations and recommendations refer to crosscutting issue paragraph 1.3


of this report.

Query 5.7: Understaffing


The Municipal Council has an approved staff structure of 291
positions. However, out of the 291 positions, only 185 positions are filled
leaving a staffing gap of 115 vacant positions representing 40% of the

293
establishment.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.8 Non-performing Loan


The Municipal Council undertook a vehicle Loan Revolving Fund from the
Ministry of Local Government and procured a Pick up Double Cabin Navara at
a cost of UGX.98,405,598 Reg. No.UG 2980 R. However, at the time of audit
the loan had an outstanding balance of UGX.64,482,349 with the Ministry of
Local Government.
The Ministry has effectively issued a warning letter as referenced with intention
to automatically recover the funds from unconditional grant.
This will consequently affect service delivery. In addition, there was no contract
agreement availed to the audit team or loan statement to verify the amount.

Observation
The Committee observed that MoLG should not obstruct district officials from
making independent decisions to buy motor vehicles of their choice as it had
been noted that the ministry had imposed on the council particular motor
vehicle which were also weak and the service of the vehicles were also directed.

Recommendation
The committee noted the whole scheme of motor vehicle loan by MoLG be
investigated

Query 5.9 Failure to dispose of old Motor Vehicles


The entity had motor vehicles that were wasting away in the parking lot.

The Committee was informed that the Board of Survey did not attach values to
the vehicles, and others do not have log books.

294
For observations and recommendations refer to crosscutting issue paragraph 12
of this report.

Query 6.0 Management of Information Communication Technology (ICT)


For observations and recommendations refer to crosscutting issue paragraph 7
of this report.

Query 7.0 Value For Money Findings on Infrastructure Projects

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

3. KASESE MUNICIPALITY

Query 5.1 Receivables


There were outstanding receivables amounting to UGX.21,890,103 at the end
of the Financial year.

For observations and recommendations refer to crosscutting issue paragraph 16


of this report.

Query 5.2 Mileage Allowances


It was observed that mileage allowances to the tune of UGX 22.84million were
paid out from different accounts without supporting evidence contrary to the
Standing Orders.
The Accounting Officer attributed this to an error on the vouchers and
presented documentary evidence.

Observation
The Committee received and looked through the voucher and found them

295
satisfactory

Recommendation
The Committee recommends that the query be dropped

Query 5.3 Weak Controls over Procurement of Supplies


It was observed that purchases to the tune of UGX.27,340,000lacked Local
Purchase Orders and Purchases to the tune of UGX.17,310,000 lacked Goods
Received Notes.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

4. LIRA MUNICIPALITY
Query 5.1 Unaccounted for expenditure

An amount of UGX 25,434,000 lacked required supporting documents.

The Accounting Officer informed the Committee that all the accountability
documents were submitted to the Auditor General at the time of audit except
the attendance list for the field activity. The attendance lists were not
submitted because the Accounting Officer and his team did not know that they
were required for the accountability which was a field visit by staff who had
acknowledged receipt of the funds.

Observation
The Committee observed that:
i. The payments were irregular because the officers were paid safari day
allowances yet they were working in their duty station. According to the public
Service Rules, Safari Day allowance is paid to an officer when they work in the
field at a place of 20killometers away. The Officers in question were paid for

296
work done within the Municipality.
ii. that the voucher for the payment that was tendered to the Committee by the
Accounting Officer as evidence was dated three months after the closure of the
Financial Year.
iii. The Accounting Officer continued to flaunt the public service regulation
because by the date of this meeting they were still paying officers safari day
allowance even when the worked less than 20km away from their duty
stations.
iv. The committee was not satisfied with the accountabilities presented;

Recommendation

The committee recommends that the accounting officer recovers the funds
from the officers immediately

Query 5.2 Status of USMID project implementation


For observations and recommendations refer to crosscutting issue paragraph 1.3
of this report.

Query 5.3. Value For Money Findings on Infrastructure Projects


A value for money audit was carried out on infrastructure projects in the
Municipality.

For observations and recommendations refer to crosscutting issue paragraphs


1.1 and 1.2 of this report.

5. IGANGA MUNICIPALITY
Query 5.1 Unauthorized Bank Over drafts
Management obtained bank overdrafts without approval from council
totaling to UGX. 12,280,480.

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The Accounting Officer communicated to the concerned Officers and secured
the council minutes that were not shown to the auditors.

Observation
The Committee observed that the explanation is not satisfactory and upheld
the advice of the Auditor General that in future the Accounting Officer should
ensure that councils accounts are not overdrawn without prior permission of
the Council.

Recommendation
The Committee recommends that:
i. The query stands.
ii. The committee recommends that the funds be recovered from the
Accounting officer and CFO.

Query 5.2 Payables


An amount of UGX. 452,957,716 worth of payables remained outstanding at
the end of the year.

The Committee was informed that the payables built up because of budget
cuts. The Accounting Officer submitted the list of outstanding payables

For observations and recommendations refer to crosscutting issue paragraph 15


of this report.

Query 5.3 Unpaid Salary Arrears


Council accumulated staff salary arrears amounting to UGX. 100,745,400.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

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Query 5.4: Unaccounted for Funds

UGX. 13,733,000 remained unaccounted for at the end of the Financial Year.

The Committee was informed that the accountability has now been made
and the documents were submitted.

Observations
The documents presented for accountability were not satisfactory.

Recommendation
The Committee recommends that the UGX. 13,733,000 be recovered from the
responsible officers immediately.

Query 5.5 Non Compliance with Statutory Obligations

A sum of UGX. 3,339,000 purpotedly paid to URA as withholding tax lacked


official acknowledgement receipts from URA.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.6 Understaffing


The Municipal Council has an approved structure of 174 positions. However
out of these only 92 positions are filled leaving 82 posts vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

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Query 5.7 Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

Query 5.8 Education Sector


Standards in sampled Primary Schools

For observations and recommendations refer to crosscutting issue paragraph 2


of this report.

Query 5.9Inspection of Health Facilities


Standards in simple Health Centres

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

Query 5.10 Completion of a new block at Prison HC II


For observations and recommendations refer to crosscutting issue paragraph 1.1
of this report.

6. JINJA MUNICIPALITY

Query 5.1 Local Revenue Short Fall


It was observed that out of the budgeted Local revenue of UGX.3,777,517,170,
only UGX.1,931,209,985 was realized leading to a shortfall of
UGX.1,846,307,177.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

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Query 5.2 Status of Uganda Support to Municipal Infrastructure
Development Program (USMID) Project Implementation

For observations and recommendations refer to crosscutting issue paragraph 1.3


of this report.

Query 5.3 Lack of Land Tittles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query 5.4 Receivables


Jinja Municipal Council failed to collect outstanding revenue from different
sources amounting to UGX.2,707,996,392. The receivable figures increased
from UGX.2,316,976,338 in 2013/14.

For observations and recommendations refer to crosscutting issue paragraph 16


of this report.

Query 5.5 Outstanding Commitments


Jinja Municipal Council accumulated outstanding commitments
amounting to

UGX.815,181,449 by the end of the Year under review. This arose from failure
to remit revenues to the lower local councils of Walukuba, Mpumudde

For observations and recommendations refer to crosscutting issue paragraph 15


of this report.

Query 5.6 Service delivery

Query 5.6.1 Health Sector

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Audit found that the facilities in Walukuba Health Center IV, Mpumudde HC
IV,Jinja HC III,Kimaka HC II, Masese Port HC II, Masese III HC II, Kisima HC II
were not satisfactory.

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

Query 5.6 Value For Money Findings on Infrastructure Projects

A value for money audit was carried out on infrastructure projects in the
Municipality.
For observations and recommendations refer to crosscutting issue paragraph 1.1
and 1.2 of this report.

7. MUKONO MUNICIPALITY

Query 5.1 Incompletely Vouched Expenditure

Audit observed that payment vouchers totaling UGX.140,098,870 lacked


supporting documents.

The Accounting Officer informed the Committee that at the time of audit the
documents were there but there was a problem with the filing system.

He presented the required accountability documents.

Observation
The Committee observed that acknowledgement of payment was done on a
plain sheet of paper that is not stamped. The Committee observed that these
kinds of papers can very easily be forged and advised the Accounting Officer to
use letter heads for this purpose.

302
Recommendations
The Committee upheld the query.

Query 5.2 Non Deduction of Withholding Tax


Audit observed that tax worth UGX.5,324,570 was not remitted by the
Municipal Council.

The Accounting Officer informed the Committee that deductions had been
made and the evidence was provided.

The Committee was informed that Mukono Municipality paid the withholding
tax to Uganda Revenue Authority from other sources and deducted the money
from the contractors in the subsequent contract.

The tax receipts from Uganda Revenue Authority was presented to the
Committee.

Observations
i. The Committee observed that the fact that the Accounting Officer paid
the withholding tax from other sources of funding instead of claiming it
from the contractor with the intention of deducting it from the
subsequent payments from other contracts meant that he awarded the
next contract to these same contractors with out competitive bidding.
ii. The Committee was informed that IFMIS deducts withholding Tax
automatically. The Committee then questioned how the withholding Tax
would be deducted twice.
iii. The Committee noted that the contractors were not notified of the fact
that they owed Mukono Municipality Withholding Tax. This renders the
Municipalities action of paying off the withholding Tax to URA from
other sources instead of claiming it from the contractors suspicious.

303
iv. The Committee noted that of the 23 companies that did not pay
withholding tax only 8 have been given new contracts. The intention to recover
the withholding tax from the companies becomes even more doubtful.
v. The Committee further observed that the Accounting Officer in a number
of instances instead of advancing the money to companies that provided
services they paid individuals to evade tax.

Recommendations
The Committee recommended that the Accounting Officer should recover the
money from the emoluments of the Chief Finance Officer because:
i. He failed to recover the money that the Municipal Council paid to URA.
ii. Cannot explain where he got the funds from to pay URA.
iii. He failed to advise the Accounting Officer on this matter yet he is the
Principal Advisor on Financial matters.

Query 5.3 Withholding Tax Payable

Audit observed that withholding tax totalling to UGX.17,290,729 was not


remitted to URA by the close of the year.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.4Understatement of Receivables

A review of the municipality valuation roll for property rates indicated that the
chargeable amount from properties was UGX.9,512,935,000 and the tax
collectable was UGX.681,833,797. Audit however observed that the receivables
were disclosed at UGX 142,837,442, implying that the receivables were
understated by UGX.538,996,355. Furthermore, management did not budget
for collectable property tax.

304
For observations and recommendations refer to crosscutting issue paragraph 16
of this report.

Query 5.5 Doubtful Expenditure on Utility Bills

Audit revealed that, during the year the Municipal Council paid
UGX.48,753,148 purportedly to settle outstanding utility bills. However, the
payments were not supported by utility bills nor utility ledgers.

The Accounting Officer informed the Committee that the money was spent on
other utilities; like money was utilized for fuel and firewood for road works.

Observations:

The committee observed that the expenditure by Mukono Municipality was


irregular as the accountability documentation adduced was not in tandem with
the queried expenditure

Recommendation
The committee recommends that accounting officer and line heads of
departments refunds the monies immediately.

Query 5.6 Under Staffing


The Municipal Council has an approved structure of 197 staff. However, out
of the 197 approved posts, only 120 were filled, leaving 77 posts vacant,
representing 36.5% of the approved structure.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

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Query 5.7 Management of Information Technology
For observations and recommendations refer to crosscutting issue paragraph 7
of this report.
.
Query 5.8 Service Delivery

Query 5.8.1 Loss of Bitumen


A review of the stores register revealed that 3 drums of bitumen valued at UGX
3.186million were not accounted for by stores personnel

Observation
The committee noted outright negligence by the stores manager denying the
population service delivery.

Recommendation
The Committee recommends that the stores personnel makes good of the
amount of UGX 3.186million immediately

Query 5.9 Inspection of Jinja Misinye Primary School


The Accounting Officer informed the Committee that they have now
constructed a 5 stance pit latrine.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

8. ENTEBBE MUNICIPALITY

Query 5.1 Local Revenue Shortfall


The budgeted revenue for the year was UGX.3,144,578,929. However, only
UGX.2,072,387,848 was realized leading to a shortfall of UGX.1,072,191,081
,equivalent to 34% of the approved budget.

306
For observations and recommendations refer to crosscutting issue paragraph 10
of this report.

Query 5.2 Receivables


Receivables amounting to UGX.213,688,889 remained outstanding at the year
end.

For observations and recommendations refer to crosscutting issue paragraph 16


of this report.

Query 5.3 Delay in Completion of a Maternity Ward at Katabi Health


Centre III .
A local firm was awarded a contract for construction of a maternity ward at
Katabi HCIII at a contract sum of UGX 185,328,120. The start date was 22nd
April 2014 and expected completion date was 30th June 2015. Audit
inspection of the maternity ward in September, 2015 revealed that works were
behind schedule by three months

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.4 Status of Uganda Support to Municipal Infrastructure


Development Program (USMID) Project Implementation
For observations and recommendations refer to crosscutting issue paragraph 1.3
of this report.

Query 5.5 UNDERSTAFFING


The Municipal Council has an approved structure of 135 staff. However, out of
the 135 approved posts, only 82 are filled leaving 53 posts vacant representing
38.5% of the approved structure.

307
For observations and recommendations refer to crosscutting issue paragraph 4
of this report.

Query 5.6 Lack of Land Titles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query 5.7 Value For Money Findings on Infrastructure Projects


The value for money audit was carried out on infrastructure projects in the
Municipality.

For observations and recommendations refer to crosscutting issue paragraph 1.1


and 1.2 of this report.

9. MASAKA MUNICIPALITY

Query 5.1 Payroll irregularities

Query 5.1.2 Unaccounted for funds

A review of the expenditure records showed that UGX.12,268,730 in respect of


administrative advances to several council employees for various activities
under different accounts remained unaccounted for.

The Committee was informed that there is a misstatement of UGX 3.742m in


regard to Assured Engineering Ltd. The payment vouchers are less than this
amount. In regard to Allied Axis there was no excess payment either. For the
rest of the money amounting to UGX. 2,901,730 the recoveries are on going.

Observations
The committee observed that the accounting officer had taken steps to recover

308
the money.

Recommendations
The Committee recommends that the recoveries should continue.

Query 5.2 Status of Uganda Support to Municipal Infrastructure


Development Program (USMID) project implementation

For observations and recommendations refer to crosscutting issue paragraph 1.3


of this report.

Query 5.3 Under Staffing


The Municipal Council had an approved staff establishment of 197 positions.
However, only 136 (69%) positions were filled leaving 61 (31%) posts vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.4Non-Disposal of Assets


A review of the Municipal Council Asset register and physical inspections
conducted in August 2015 revealed a number of old and obsolete assets due
for boarding off and these included; motor vehicles and other assets.
.
For observations and recommendations refer to crosscutting issue paragraph 12
of this report.

Query 5.5: Value For Money Findings on Infrastructure Projects

A value for money audit was carried out on infrastructure projects in the
Municipality.

309
For observations and recommendations refer to crosscutting issue paragraph 1.1
and 1.2 of this report.

10. BUSIA MUNICIPALITY

Query 5.1 Lack of Acknowledgment Receipts for Tax Remittances

It was observed that UGX.66,064,907 in respect of PAYE and 6% WHT


allegedly remitted to URA lacked acknowledgement receipts.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.2 Incompletely vouched Expenditure

It was observed that payment vouchers from operations Account totaling


UGX.57,146,687 lacked supporting documents.

The Accounting Officer presented the vouchers.

Observations

The Committee was satisfied with vouchers worth UGX. 41,374,987 but
vouchers worth UGX. 15,771,700 were not presented.

Committee Recommendations
The Committee recommends that the Accounting Officer should recover UGX.
15,771,700 immediately.

Query 5.3 Unaccounted for Administrative Advances


A sum of UGX 46,251,928advanced to various officers remained unaccounted

310
by the time of audit.

The Accounting Officer submitted the accountabilities to the Committee.

Observations
The Committee observed that only UGX. 5,556,000 was accounted for. The
administrative study tour worth UGX. 23,000,000 was conducted but the
procurement process for the transport was irregular.

Recommendation
i. The Committee recommends that the balance of UGX. 17,665,000 be
recovered immediately.
ii. The Accounting Officer must adhere to procurement laws in the future.

Query 5.3 Missing Vouchers

It was observed that expenditure amounting to UGX. 6,142,000were not


supported with expenditure vouchers.

The Accounting Officer submitted the vouchers for verification.

Observation
The Committee was satisfied with the vouchers.

Recommendation
The Committee recommends that the query be dropped.

Query 5.4 Payables


The Municipal Council had accumulated commitments by year end amounting
to UGX. 165,246,177.

311
For observations and recommendations refer to crosscutting issue paragraph 15
of this report.

Query 5.5 Incomplete Procurement Records

A test check on procurement files of UGX.318,244,407 revealed missing


procurement records.

Inadequate procurement records may be intended to conceal irregularities in


the procurement process.

The Accounting Officer claimed that all missing documents had been retrieved
but did not present them for verification.

The Accounting Officer presented the relevant documents.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.6 Lack of Land Titles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query 5.7 Salary Arrears


Council has accumulated arrears amounting to UGX.11, 878,656 as at 30th
June 2015.

For observations and recommendations refer to crosscutting issue paragraph 3.3


of this report.

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Query 5.8Delayed Completion of Project

During the financial year 2013/2014, a contract of UGX 1,807,699,504 was


awarded to M/s Engineering Trade Links ltd for construction of the main office
block at Busia Municipal Council. By the time of audit in September 2015,
UGX.429, 864,902 had been paid to the Contractor. However, audit inspection
revealed that the Contractor had abandoned the site.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

Query 5.9 Long Outstanding Receivables


The entity had long outstanding receivables amounting to UGX.66,226,169 at
the closure of the year which had been outstanding for more than one year.

For observations and recommendations refer to crosscutting issue paragraph 16


of this report.

11. MBALE MUNICIPALITY

Query 5.1 Incompletely Vouched Expenditure


A sum of UGX 33,288,580lacked adequate supporting documents.

The Committee was presented with accountabilities.

Observations
The accountabilities were doubtful.

Recommendations
The Committee upholds the query and therefore recommends the recovery of
UGX 33,288, 580 only from the respective officers.

313
Query 5.2 Missing Payment Vouchers
Expenditure totaling UGX 10,670,139 was not supported by payment
vouchers.

The Accounting Officer submitted the missing vouchers and they were verified
by the auditors.

Observations
The Committee was satisfied with the accountabilities.

Recommendations
The Committee recommends that the query be Dropped.

Query 5.3 Lack of Tax Acknowledgment Receipts

A sum of UGX 11,203,385 deducted from Contractors and Suppliers in respect


of 6% withholding tax was not supported with acknowledgment receipts from
Uganda Revenue Authority.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.4 Under Collection of Local Revenue


Out of the budgeted amount of UGX 1,934,918,000only UGX1,314,309,993
(67.8%) was realized leading to a shortfall of UGX 620,608,007 representing
32% of the budgeted local revenue.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.5 Use of Inappropriate Procurement Method


Council contracted M/S Chikooku General Agencies to renovate the Municipal

314
office block at a cost of UGX.77, 262,150. However, the entity used selective
bidding method instead of the open bidding method that was applicable.

Use of inappropriate method of procurement undermines the principles of


competition, fairness and value for money.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.6 Unspent Balances


A review of the financial statements revealed that there was unspent balance of
UGX 149,210,972at the closure of the FY.

For observations and recommendations refer to crosscutting issue paragraph 9


of this report.

Query 5.7 Status of Uganda Support to Municipal Infrastructure


Development Program (USMID) Project Implementation

For observations and recommendations refer to crosscutting issue paragraph 1.3


of this report.

Query 5.8 Over Payment of Salary


Payroll analysis carried out revealed that 364 members of staff who were
supposed to earn salaries amounting to UGX.120,203,937 according to their
scale were instead paid UGX.222,591,293 resulting into a salary overpayment
of UGX.102,387,356.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

315
Query 5.9 Lack of Land Titles
For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query 5.10 Value For Money Findings on Infrastructure Projects

A value for money audit was carried out on infrastructure projects in the
Municipality.

For observations and recommendations refer to crosscutting issue paragraph 1.1


and 1.2 of this report.

12. TORORO MUNICIPALITY

Query 5.1 Outstanding receivables


A review of the balance sheet revealed that the Council had accumulated
outstanding receivable amounting to UGX.1, 397,702,463 at year end.

For observations and recommendations refer to crosscutting issue paragraph 16


of this report.

Query 5.2 Un-Accounted for Administrative Advances


A sum of UGX. 6,033,646paid out for various activities remained unaccounted
for by the time of audit contrary to Financial Regulations.

The Accounting Officer presented accountabilities.

Observations
The Committee was satisfied with the accountabilities but notes laxity on
matters of accountability on the part of the Accounting Officer and his staff.

316
Recommendation
The committee recommends that the query be dropped.

Query 5.3 Incompletely Vouched Expenditure


A sum of UGX. 4,743,311 lacked the necessary supporting documents.

The Accounting officer presented the documents for verification.

Observation
The Committee noted that though some of the evidence given were on
photocopies, were satisfactory.

Recommendation
The committee was satisfied and recommend the query be dropped.

Query 5.4 Lack of a Detailed Contracts Registers


It was observed that the availed register did not indicate details of payments
made on contracts and details of retention monies and penalties as stipulated
by the manual.
Failure to properly maintain a Contract Register implies inability to keep track
of previous payments and could lead to double payments.

Recommendations
Committee upheld the query because evidence of a contract register was not
presented.

Query 5.5 Purchase of Land for Morukatipe View Primary School


It was observed that Council purchased a piece of land measuring 64m by 60m
from Mr. Omella Geoffrey at a price of UGX. 38,000,000 during the year.
However, there was no Government Valuers report.

317
Consequently, there is a risk that the land could have been purchased at a
price higher than the market price resulting into loss on the part of the
Municipal Council.

The Committee directed the Accounting Officer to submit the valuation Report.

Observation
The committee observed that purchase of land by districts and municipal
councils was not guided by government valuer and this could be deliberate by
the officers to defraud councils.
A case in point is the purchase of land in the way of the standard gauge
railway project which was also under consideration for compensation by
Government.

Recommendation
The committee recommends that the accounting officer refunds the money
immediately.

Query 5.6 Status of Uganda Support to Municipal Infrastructure


Development Program (USMID) Project Implementation

For observations and recommendations refer to crosscutting issue paragraph 1.3


of this report.

Query 5.7 Under Staffing


The Municipal Council has an approved structure of 109 positions. However,
out of the 109 positions, only 55 positions (50.5 %) were filled leaving a
balance of 54 posts representing 49.5% of the establishment.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

318
Query 5.8. Value For Money Findings on Infrastructure Projects

A value for money audit was carried out on infrastructure projects in the
Municipality.

For observations and recommendations refer to crosscutting issue paragraph 1.1


and 1.2 of this report.

13. BUSHENYI-ISHAKA MUNICIPALITY

Query 5.1 Under Collection of Local Revenue


Out of the UGX.907,638,900 local revenue that was budgeted, only
UGX.719,981,484was realized resulting in a shortfall of UGX.190,274,411
representing (20.7%) of the budgeted amount.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.2 Lack of Land Titles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query 5.3 Understaffing


The Municipal Council had an appoved staff establishment of 200 positions.
However, out of the approved positions, only 98 (49%) positions were filled
leaving 102 (51%) positions vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

319
Query 5.4 Lack of Information Communication Technology Policy

For observations and recommendations refer to crosscutting issue paragraph 7


of this report.

14. KABALE MUNICIPALITY

Query 5.1 Lack of Land Titles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query 5.2 Local Revenue Shortfall


out of UGX.1,244,366,088 of local revenue budgeted, only UGX.1,002,718,322
was realized, resulting into a short fall of UGX.241, 647,766 representing 19%
of the budgeted Local revenue.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.3 Status of Uganda Support to Municipal Infrastructure


Development Program (USMID) project implementation

For observations and recommendations refer to crosscutting issue paragraph 1.3


of this report.

Query 5.4 Under Staffing


The Municipal Council had an appoved staff establishment of 147 positions.
However, out of the approved positions, only 64 (44%) positions were filled
leaving 71 (56%) vacant posts.

For observations and recommendations refer to crosscutting issue paragraph 4

320
of this report.

Query 5.5 Audit Inspection of Kamukiira Health Centre IV


Inspection by audit revealed that Kamukiira Health Centre IV lacked transport
facilities, adequate storage space for medicines and vaccines, medical
equipment, an ambulance, a stand-by generator, adequate patients wards,
and staff accommodation. There is a risk of poor health service delivery to the
community.

For observations and recommendations refer to crosscutting issue paragraph 5


of this report.

Query 5.6 Value For Money Findings on Infrastructure Projects

A value for money audit was carried out on infrastructure projects in the
Municipality.

For observations and recommendations refer to crosscutting issue paragraph 1.1


and 1.2 of this report.

15. MBARARA MUNICIPALITY

Query 5.1 Local Revenue Shortfall


Out of the budgeted local revenue of UGX.3,528,747,717 Council collected only
UGX.2,434,574,415 resulting into a shortfall of UGX.1,094,173,302
representing 31% of the budgeted amount.
Observation
i. The committee observed that the shortfalls in revenue in the
council was a result of deliberate connivance between staff and those
contracted to collect the revenue and there was connivance in

321
procurement rendering contractual obligations useless.
ii. The committee noted the Mbarara Municipal Council violated
known standards to give contracts for revenue collection not to take
more than one year however in the FY 2014/15, council committed
collection of revenue to a company for 5 years without review. The
committee was shocked to learn that had been the nature of MC
iii. The committee also noted that there was a racket of officers
dealing with other officers in Government to protect them in case of any
action.
iv. The committee also noted that in an attempt to review the
contract, it was flatly rejected by the contractor and when a substantive
accounting officer returned to office, he just signed the contract without
any due diligence

v. The officers responsible in this matter are the town clerk, the
treasure, procurement officer, revenue officer and assistant town clerk,

The committee therefore recommends that,


i. This matter be thoroughly investigated by the CIDs who are
already doing the job with a view of prosecution
ii. The investigation should extend to other government officials
including the police in Mbarara and other government departments
covering the region
iii. Given the amount of under collection, under declaration and
under estimation of revenues in MC and other auditor general should
carry out a special audit to establish revenue sources, revenue capacities
and untaxed areas.

Query 5.2 Outstanding Salary Arrears


Council accumulated salary arrears for health workers and teachers
amounting to UGX.38,684,282.

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For observations and recommendations refer to crosscutting issue paragraph 3.3
of this report.

Query 5.3. Lack of Land Titles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query 5.4. Untaxed Gratuity and Allowances


UGX.26,985,600 was paid in respect of gratuity to political leaders and
retention allowance to doctors without subjecting the payments to Pay As You
Earn amounting to UGX.8,095,680.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.5. Outstanding Debtors


A sum of UGX.437,698,988 remained unrecovered from the debtors at year
end. Failure to properly manage debtors may lead to eventual loss of revenue
to council.

For observations and recommendations refer to crosscutting issue paragraph 16


of this report.

Query 5.6. Status of Uganda Support to Municipal Infrastructure


Development Program (USMID) project implementation
For observations and recommendations refer to crosscutting issue paragraph 1.3
of this report.

Query 5.7. Under Staffing


The Municiap Council had an appoved staff establishment of 114 positions.

323
However, only 67 (59%) positions were filled leaving 47 (41%) posts vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.
Query 5.8. Lack of Documented Risk Management Policy
Management has not established a risk management policy.

The Accounting Officer explained that Council had embarked on forming a risk
management committee that would formulate the policy.

The Committee was informed that a Committee was formed and are currently
making a draft.

Observation
The Committee was satisfied with the progress.

Recommendations
The Committee recommends that the query be dropped.

Query 5.9 Value For Money Findings on Infrastructure Projects

A value for money audit was carried out on infrastructure projects in the
Municipality.

For observations and recommendations refer to crosscutting issue paragraph 1.1


and 1.2 of this report.

16. NTUNGAMO MUNICIPALITY

Query 5.1 Under Collection of Local Revenue


Out of the UGX. 464,919,500 local revenue that was budgeted, only UGX.

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368,793,306 (79%) was collected leading to under collection of UGX.
96,126,194 (21%).

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

Query 5.2 Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

Query 5.3 Under Staffing


The Municipal Council had approved staff establishment of 160 positions.
However, only 69 (43%) positions were filed leaving 91 (57%) posts vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5. 4Lack of ICT Policy

For observations and recommendations refer to crosscutting issue paragraph 7


of this report.

17. RUKUNGIRI MUNICIPALITY

Query 5.1 Lack of Land Titles

For observations and recommendations refer to crosscutting issue paragraph 6


of this report.

Query 5.2 Understaffing

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The Municipal Council had an approved staff establishment of 215 positions.
However, only 120 (56%) positions were filled leaving 95 (44%) posts vacant.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.3 Lack of a master Plan


Council has no approved master plan from the Ministry of Lands Housing and
Urban Development. This exposes the council to a risk of unplanned
developments.

The Committee was informed that the Master Plan has now been approved and
it is on display.

Observation
The Committee observed that the master plan must fit in Ugandas national
development plan.

Recommendation
The Committee recommends that the query be dropped.

Query 5.4 Non Deduction of Local Service Tax ( LST)


Council failed to deduct local service tax from staff amounting to UGX.2,
375,000.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

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18. MOROTO MUNICIPALITY

Query 5.1 Over Payment of Salary Arrears

A review of Bank of Uganda statements revealed that a total of UGX


47,782,870 was paid as salary arrears to various staff instead of the amount
on the IPPS of UGX.27,795,467 causing over payment of UGX.19,987,403.

For observations and recommendations refer to crosscutting issue paragraph 3.3


of this report.

Query 5.2 Outstanding Receivables


UGX 370,527,515 in respect of house rent and property rate remained
outstanding at the year-end.

For observations and recommendations refer to crosscutting issue paragraph 16


of this report.

Query 5.3 Unaccounted for Funds.

UGX.2,506,607 remained unaccounted for at the time of audit


The Committee was informed that the funds have been accounted for and the
Auditor verified them.

Observations
The Accountabilities were falsified.

Recommendation
The Committee directed the Accounting Officer to recover all the
UGX.2,560,607

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Query 5.4 Failure to prepare contract implementation plans

Contract supervisors did not prepare contract implementation plans for


procurements.

The Committee was informed that the Contract Implementation plan is now
being prepared.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.5 Diversion of Funds

UGX 6,000,000 was diverted from Education Account to the Administration


and Audit account.

The Accounting Officer explained that the money was used to settle creditors
who had mounted pressure on the Council and will be refunded.

The Committee was informed that the funds have been recovered and evidence
was submitted.

Observation
The Committee was satisfied with the recovery.

Recommendation
The Committee recommends that the query be dropped.

Query 5.6 Failure to Dispose of Assets

The Municipal Council failed to dispose of a number of assets that had been
recommended for disposal by the board of survey report of 2013/2014.

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Consequently, some of the vehicles have been vandalized.

There is a risk that the condition of the items might deteriorate further.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.7 Status of Uganda Support to Municipal Infrastructure


Development Program (USMID) Project Implementation

For observations and recommendations refer to crosscutting issue paragraph 1.3


of this report.

Query 5.8 Value For Money Findings on Infrastructure Projects

A value for money audit was carried out on infrastructure projects in the
Municipality.

For observations and recommendations refer to crosscutting issue paragraph 1.1


and 1.2 of this report.

19. SOROTO MUNICIPALITY

Query 5.1 Budget Performance.


A total of UGX. 21,881,225,000 was budgeted in respect of Central
Government Grants but only UGX. 11,294,684,934 was released resulting in a
shortfall of UGX. 10,586,540,066 (48.4%).

The Accounting Officer explained that Government did not release some funds
for projects like MATIP and donations from NEMA and Baylor.

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Observation
The Committee observed that the query is not the fault of the Municipality.

Recommendation
The Committee recommends that the query be dropped.

Query 5.2 Unsupported Salary Payments

A review of the Bank of Uganda Salary Statement revealed that a total of UGX
8,468,015 was paid to various staff without supporting documents.

The Committee was informed that it arose from a systems error where the
Ministry of Finance had a different template from the one submitted by the
Municipality.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.3 Payment to Non-Validated Staff.


During the year, salaries totalling to UGX.41,298,597 were paid to 14 staff who
had not been validated.

For observations and recommendations refer to crosscutting issue paragraph 3.1


of this report.

Query 5.4 Unaccounted for Funds


A total of UGX. 4,358,000remained unaccounted for at the time of audit.

The Accounting Officer submitted accountabilities to the Committee.

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Observations
The Committee was not satisfied with the accountabilities.

Recommendations
The Committee directed the Accounting Officer to recover the money
amounting UGX 4,358,000.

Query 5.5 Status of Uganda Support to Municipal Infrastructure


Development Program (USMID) Project Implementation

For observations and recommendations refer to crosscutting issue paragraph 1.3


of this report.

Query 5.6 Dilapidated school accommodation and classroom structures


Audit inspection revealed that some of the schools had very poor classroom
structure and old toilet facilities.

For observations and recommendations refer to crosscutting issue paragraph 2


of this report.

Query 5.7 Lack of Land Titles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query 5.8 Understaffing


The Council has an approved structure of 190 staff. However, out of the
approved positions only 95 (50%) positions were filled leaving a staffing gap of
95 (50%).

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

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Query 5.9 Grounded Motor Vehicles.
Audit inspection noted that some of the council vehicles are grounded at the
council yard without any hope of being repaired.

For observations and recommendations refer to crosscutting issue paragraph 12


of this report.

Query 5.10 Management of Information Technology (IT ) Resources


For observations and recommendations refer to crosscutting issue paragraph 7
of this report.

Query 5.11. Value For Money Findings on Infrastructure Projects

A value for money audit was carried out on infrastructure projects in the
Municipality.

For observations and recommendations refer to crosscutting issue paragraph 1.1


and 1.2 of this report.

20. MASINDI MUNICIPAL COUNCIL

Query 5.1 Local Revenue shortfall


Only UGX.1,092,407,962 of the approved local revenue budget of
UGX.1,233,732,010 leading to a shortfall of UGX.141,324,048
representing 11% of the budgeted amount.

For observations and recommendations refer to crosscutting issue paragraph 10


of this report.

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Query 5.2 Non remittance of local Revenue:
The Committee was informed that the district administration had failed
to remit a sum of money constituting shared local revenue to the lower
local governments.
The Accounting Officer informed the Committee that some funds had
been remitted and more was due to be remitted.

Observations
The Committee was satisfied with the explanation.

Recommendations:
The Committee advised the Accounting Officer to remit the remaining
UGX. 29,000,000/= to the lower councils so as to improve on the service
delivery at those levels.

Query 5.3 Unaccounted for Funds:


A sum of UGX.3,290,000 remained unaccounted for by the time of the
audit.

The Committee was informed that the administration had failed to


account for UGX. 3,290,000 which was allegedly paid to Officers from the
Ministry of Works who had gone to supervise works at the District.

Recommendation
The Committee upheld the query.

Query 5.4 Non Compliance with the Procurement system:


The Committee was informed that the administration purchased three
motor cycles worthy UGX. 30,000,000 for the District without going
through the right procurement process.

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For observations and recommendations refer to crosscutting issue paragraph 12
of this report.

Query 5.5 Implementation of projects without implementation plan:


The Committee was informed that the administration implemented
projects worthy UGX. 210,476,068 without following any implementation
plan.
The Accounting Officer did not give any explanation about the query.

Recommendation
The Committee upheld the query

Query 5.6 Untitled district land:


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

21. HOIMA MUNICIPALITY

Query 5.1 Understaffing


The Municipal Council has an approved staff structure of 139
positions. However, out of the 139 positions, only 54 positions are filled
leaving a staffing gap of 85 vacant positions representing 61% of the
establishment.

For observations and recommendations refer to crosscutting issue paragraph 4


of this report.

Query 5.2: Funds unaccounted for

Query 5.2.1: Unaccounted for Administrative Advances

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A sum of UGX 26,084,928 remained unaccounted for at the end of the
Financial Year.

Accounting Officer submitted accountabilities.

Observation
The Committee upheld the query because it was not satisfied with the
accountabilities.

Recommendation
The Committee recommends that the Accounting Officer recovers the funds
within one month.

Query 5.3 : Incompletely Vouched Expenditure


It was observed that payment amounting to UGX 18,454,400 lacked an
acknowledgement receipt raising doubt as to whether the funds had actually
reached the intended beneficiaries.

The Accounting Officer explained that an acknowledgement receipt was


available but it was not produced for audit verification.

The Accounting Officer presented proper documentation that was verified by


the auditors.

Observation
The committee was satisfied with the documentation.

Recommendation
The Committee recommends that the query be dropped.

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Query 5.4 Non-Compliance with statutory Obligations
Withholding tax amounting to UGX.17,828,297had not been remitted to URA
by close of the financial year.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.5 Status of Uganda Support to Municipal Infrastructure


Development Program (USMID) Project Implementation

For observations and recommendations refer to crosscutting issue paragraph 1.3


of this report.

Query 5.6 Lack of Land of titles


For observations and recommendations refer to crosscutting issue paragraph 6
of this report.

Query 5.7 Information and Communication Technology (ICT) Policy


For observations and recommendations refer to crosscutting issue paragraph 7
of this report.

Query 5.8 Value For Money Findings on Infrastructure Projects

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

22. GULU MUNICIPALITY

Query 5.1 Receivables


Receivables amounting to UGX.6,365,144,394 remained outstanding at year
end.

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For observations and recommendations refer to crosscutting issue paragraph 16
of this report.

Query 5.2 Unaccounted for Advances


Advances amounting to UGX.18,867,000 remained unaccounted for.

The Committee was presented with the accountabilities. The Accounting Officer
noted that accountability issues arise from laxity and the people have been
cautioned.

Observations
The Committee was not satisfied with the accountability presented by the
accounting officer.

Recommendation
The committee recommends that the total sum of UGX 18,867,000 be
recovered from the officers by the accounting officer immediately.

Query 5.3 Unacknowledged Withholding Tax Remittances


6% withholding tax and Pay As You Earn (PAYE) totaling UGX.8,756,409was
allegedly remitted to Uganda Revenue Authority (URA) but lacked
acknowledgement receipts from the tax body.

For observations and recommendations refer to crosscutting issue paragraph 11


of this report.

Query 5.4 Understaffing


The Municipal Council has an approved structure of 107 staff. However, only
60 posts were filled leaving 47 posts representing 44% of the approved staff
structure.

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For observations and recommendations refer to crosscutting issue paragraph 4
of this report.

Query 5.4 Status of Uganda Support to Municipal Infrastructure


Development Program (USMID) Project Implementation

For observations and recommendations refer to crosscutting issue paragraph 1.3


of this report.

Query 5.5 Value For Money Findings on Infrastructure Projects

The value for money audit carried out on infrastructure projects in the
Municipality were carried out.

For observations and recommendations refer to crosscutting issue paragraph 1.1


of this report.

6.0 Conclusion

Rt. Hon. Speaker, Hon. Members,

I beg to move that this report be adopted.

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