The Auditor General’s report for the financial year ending June 2012 reveals perennial abuse of public funds by different government bodies amounting to trillions of shillings.
The report presented to the Speaker Rebecca Kadaga this morning shows misappropriation of monies in about 1600 entities including the central government, local governments, and statutory corporations.
In the Central government, the report notes that the Public Finance and Accountability Act 2003 provides that the terms and conditions of a loan shall be laid before Parliament and shall not come into operation unless they have been approved by a resolution of Parliament. However, it was noted that 13 new loans worth 1.3 trillion shillings had their loan agreements signed prior to Parliamentary approval.
A number of accounting officers mischarged expenditure worth 256.9 billion shillings through charging wrong budget codes without following set procedures. The mischarges at times amounted to as much as 81 percent of the budget and entity. As a consequence the funds were diverted and not utilized in accordance with the Appropriation Act and the guidance of Parliament.
The report shows that the Uganda National Roads Authority (UNRA) overpaid 47 billion shillings to various contractors on three road construction contracts arising from errors in the application of variation of price formulae used in computing compensation amounts.
Still under the Central government, on the 14th July 2011 a sum of 11.942 billion shillings was transferred by the Ministry of Justice and Constitutional Affairs from case backlog account to Heritage Arbitration account in Bank of Uganda. At the time of audit only 189.6 million was spent from Heritage Arbitration leaving a balance of 11.7 billion shillings to date. The account has also not been active for the last 8 months and the funds not used.
A total of 44 billion shillings has been accrued in the Justice Ministry financial statements and 10 billion paid in relation to compensation of internally displaced people following the insurgency in Lira in Northern Uganda. The claims submitted according to the Auditor General in relation to these claims were found to have several inconsistencies that rendered them doubtful.
The report indicates that a number of accounting officers advanced funds to officers through their personal accounts to carry out official activities. These funds should as much as possible have been paid to the beneficiaries directly. An examination of a total of 67 billion shillings involved revealed that 25.9 billion remained not accounted for.
Good financial management practices discourage use of the cash given huge risks associated with it. However, the Auditor General found that huge amounts of money in cash totaling 27.8 billion shillings were advanced to officers for execution of government activities.
The Auditor General John Muwanga notes that putting government money into personal accounts has been one of the major weakness in the government bodies.
An audit of the local government shows a budget shortfall s and failure to implement planned activities in 78 local governments. Whereas a total of 584.3 billion shillings was budgeted for in respect to local government grants in the above entities, only 515.7 billion was realized leading to a shortfall of 68.5 billion shillings which affected delivery of services to communities.
At least 46 local governments also procured items and services worth over 10 billion shillings without following Public procurement regulations and guidelines. The report indicates that the lack of procurement files, breach of contract procedures, contract management weaknesses and unauthorized variation all together cost government 10.03 billion shillings.
The report comes just days after Geoffrey Kazinda, the former Principal Accountant in the Office of the Prime Minister (OPM,) was sentenced to five years in jail for corruption related offences. The offences including abuse of office, forgery and fraud related to the scandal in the OPM in which up to 50 billion shillings meant for post war recovery in Northern Uganda was misappropriated by staff. The scam was unearthed after a special audit by the Auditor General.