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Auditor General report exposes financial indiscipline

A new report of the Auditor General (AG) has revealed the rot in government and faulted officials in the Ministry of Finance for spending more than Shs1.15 trillion, without the mandatory parliamentary approval.

Section 25(1) of the Public Finance Management Act provides that government may approve a supplementary budget up to 3 per cent of appropriated budget but must seek retrospective approval from Parliament within four months.

Mr John Muwanga presented his new report to Speaker Rebecca Kadaga yesterday at Parliament and revealed that of Shs1.8 trillion spent by the government on undisclosed activities, only Shs615.8b was approved by Parliament.

In the coming weeks, Parliament’s Public Accounts Committee will investigate Ministry of Finance officials on what the committee chairperson, Mr Nathan Nandala Mafabi (FDC, Bidadiri West) called “illegal expenditures”.

“It’s good that the AG highlighted these illegalities…they bypassed Parliament with impunity and spent public funds without authority,” Mr Mafabi said. The June 2019 highlights what MPs have called “wanton abuse” of the government commitment control systems and casts doubt on the implementation of the 2021 General Election roadmap.

With only one year to the General Election, of Shs796.88b, government has only released Shs141b, representing 18 per cent of the required funds to enable proper and timely implementation of the polls.

“Activities critical to the roadmap that should have been implemented include, demarcation of electoral areas, re-organisation of polling stations, specialised training (ICT biometrics and due diligences of ICT procurement), voter education, acquisition of biometric voter verification system, developing election document management system, digitising election documents and setting up an election digital archive, among others.” Mr Muwanga’s report reads in part.

Daily Monitor, however, understands that some activities on the 2021 Electoral Commission roadmap were implemented last year. Mr Muwanga told Speaker Rebecca Kadaga yesterday that the budget provision of Shs141b did not finance the roadmap. “This therefore prompted the Commission to reschedule the activities to the last year of the election”, adding that financing of the 2021 polls is behind schedule.

Shs1.3 trillion unspent Mr Muwanga revealed that more than Shs1.3 trillion remained unspent at the close of the financial year 2018/2019 due to poor absorption capacity. The unused funds had been budgeted under local governments and central government votes.

According to the report, of the Shs35t approved for 2018/2019, government released Shs31.1t. Of the total amount released, Shs30.7b was spent leaving unspent balance of Shs548b. Of this, local governments returned Shs112.7b. Also total of Shs736b from 43 sampled government projects remained unspent during the same financial year.

The report indicates that failure to absorb some of the funds were attributed to delays in approving work plans, long procurement processes and delays in signing contracts. It also cited slow progress in executing works. Several government accounts were also attached through garnishee orders and a total of Shs66.6b and $528,000 from 17 bank accounts were targeted to clear the debts.

Domestic arrears Domestic public debt has also continued to increase. According to the report, government borrowed up to Shs7.4t from the domestic market, of which Shs2.2t was for budget support and Shs5.2t for refinancing maturing obligations. The report, however, revealed that servicing the principal and interest for the domestic debt stock accounted for only Shs7.2b. “I advised government to strictly adhere to the government commitment control systems to minimise incurring new arrears,” Mr Muwanga said.

Local government's performances Of the Shs112.5b budgeted local revenue, only Shs85.2b was collected in the financial year 2018/2019, representing a performance of 76 per cent.

At least 51 districts and municipalities registered local revenue performance of above 75 per cent, 27 registered 50 to 74 per cent and 23 performed below 50 per cent. Kaabong, Kween and Bulambuli were the top performers in local revenue scoring 211 per cent 200 per cent and 154 per cent while Tororo, Bundibugyo and Kibaale were the worst performers scoring paltry 18 per cent, 14 and and 11 per cent, respectively.

According to the report, out of the 583 town councils created in the last five years, only 228 have been approved by the finance ministry for access of resources from the national budget. The balance according to of 355 town councils according to Mr Muwanga require a budget of Shs622b for start-up and operational costs.

Oil cash The AG also questioned the use of oil money to finance the government budget needs. In particular, Mr Muwanga queried the management of the Petroleum Fund, noting that absence of fiscal rule in the management of the funds, lack of approved petroleum investment framework and draw down of funds from petroleum funds are challenges affecting the management of petroleum funds.

Meanwhile a 2010 World Bank Report ranks Uganda among the corrupt states, estimating that the nation loses about $300 million annually through corruption and procurement malpractices.

Similarly, a 2017 Sauti za Wananchi report by Twaweza, a non-governmental report, says 79 per cent of Ugandans feel the government is not doing a good job in fighting corruption while 78 per cent say the country is badly off in creation of jobs.

Other Issues. The report also found that out of 1,251,344 cases registered at Criminal Investigations Department in the last five years only 302,545, representing 24 per cent) were successfully investigated.

This article was originally published on The Ugandan Monitor.


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