Here I will Travers through the report of Auditor General of Uganda’s Annual Report for the year ended 30th June 2015. This is on: “CENTRAL GOVERNMENT AND STATUTORY CORPORATIONS”. I will take the quotes and stories that seem to show parts of how the Government of Uganda works and what the Auditor General have cared about addressing in this specific report. Take a look! This here is Part two!
Ministry of Works and Transport Sector:
Certain information from the ministry:
“management used the services of a local company to print Ministry materials at a cost of UGX.48,000,000 without following procurement guidelines” (…)”expenditure totalling to UGX.157,861,512 was inappropriately charged on budget lines to fund activities that were not planned for without authority” (…)”management explained that this was caused by UGX3,367,986,442 that was held on the Stanbic Bank Collection account as the funds were earmarked to replace worn out equipment and plant and MELTC, yet management does not spend these funds at source; and UGX.819,209,847 mainly consisted of funds earmarked or Lake Bisina Ferry landing sites and DRRU. MELTC will be required to return all the unspent operational funds when the Rural Transport Infrastructure (RTI)/U-growth project ends on 30th June 2016” (P:116 – 121). Comment: This here prove how the have chared funds without authority. The Ministry also has to release funds back to the RTI U as they have not done their work on the Ferry Landing Site.
Non-payment of UGX.490m to Mukono District Council:
“Management explained that the long standing dispute between the Ministry and Mukono District affected the progress of the ICD project and an understanding had been reached between the two parties. However in December 2014, the Ministry sought legal advice from the Solicitor General on the pending compensation of UGX.490m to Mukono District and the Solicitor General advised that there was no justification for the compensation since the District could not prove that it owned the structures” (P: 132). Comment: This here proves mismanagement for Local Government Council and the Ministry, that the monies does not leave either party or to the party that deserve the money. Not well played by either ones.
Construction of Nwoya Community Justice House – Abandoned construction works:
“Nwoya Community Justice Centre was constructed by a local company at UGX.1,516,916,000. The contract commenced on 11th July 2014. Audit inspection carried out at the site on 19th September, 2015 revealed that the contractor abandoned the work. There was no construction work in progress” (P: 158). Comment: Here is mismanagement locally and also with the ministry therefore it is a building without a contractor who left the premises. The OAG and the Ministry should probe the contractors and also the Local Government Council for the little check on the work in their district. Or doesn’t it matter that the work and used monies on a court building left unfinished?
Directorate of Citizenship and Immigration Control (DCIC):
Construction of Border Posts:
“Construct Sebagolo model border post with staff quarters), Kikagati mini border post and Ishasha mini border post” (…)”Was allocated UGX 200m and none used funds or absorbed” (…)”Sebagolo; procurement abandoned. No land title” (…)”Ishasha; procurement abandoned due to lack of structural drawings, border post building design and BoQs” (…)”Kikagati; procurement; abandoned due to lack proof of ownership of land” (P: 161).
Ministry of Affairs:
DGAL-Gulu – Delayed completion of the construction of a Regional Laboratory in Gulu:
“The construction of the Regional Laboratory started on 28th January 2008 at a contract sum UGX.436,445,468 and was to be completed by 28th July, 2008 (after 22 calendar weeks)” (…)”at the time of writing this report, the construction had not been completed (after 7 years) and the site appears to have been abandoned. A total of UGX.236,330,768 (54,15%) was paid to the contractor and the building had been roofed, plastered and fitted with exterior doors and window burglars” (P: 177). Commented: They proved too been a breach of contract between the Ministry, Local Government Council and the contractors who was building on the site. These institutions should probe the contractor for delays and not finishing the building, while the government should check the history of the allocations and see why they haven’t done the work and delivered as budgeted in the past.
Uganda Police Force:
“The Force had 291 and 970 uneconomical and grounded motor vehicles and motorcycles representing 27% and 28% respectively of the available fleet of 1091 motor vehicles and 3452 motor cycles” (P: 183). Comment: That such a giant part of their fleet is standing still and can’t be used for their entitled work. So it is a waste of funds and also equipment.
“The budget of UGX.120m was again provided for the financial year 2014/2015, however, this was not enough to carry out the activity. This financial year (2014/15), UGX.3.7bn had been estimated to cover the surveying, titling, boundary opening, land purchase, land planning and design, compensation and inspection, however only UGX.120m was provided in the budget” (P: 185). Comment: This here prove how little the state care for police when they can’t secure funding for land in and titles for the Police Stations. Another proof of weak governance when they doesn’t care for their own civil servants.
“Police has over 40 vessels including long distance patrol boats, firefighting boats, fiber glass boats and inflatable boats deployed in the detach units on all major water bodies of Lakes Victoria, Kyoga, Albert, Edward and George. However, the Force lacks a marina at Kigo marine headquarters for safe docking and parking of major boats. As a result, some big boats are docked/parked at Lake Victoria Serena Hotel for safety purposes, while others are dry docked (parked on land) at Kigo headquarters” (P: 186). Comment: We can see that the Police don’t have funding for the boats and to keep the upkeep of them. That proves that the Government doesn’t value the boats, since they don’t keep them in great areas.
Police Mariners staff, Post Mariners Post-Education and Fuel issues:
“Marines unit has a workforce of 197 staff with over 40 vessels. A review of the unit nominal roll revealed that only 10 staff have mechanical/technical related qualifications while 6 have qualifications in fisheries” (…)”The Accounting Officer further explained that some training is already underway both within and outside the country, and that in the current financial year, 45 staff are undergoing marine training by Korean instructors” (…)”The unit detaches are provided with 200 liters of fuel for operations per month (6.4 liters per day) and yet the fiber boats at each unit consume 20 liters per hour. According to the in-charge, each unit detach requires at least 60 liters a day which puts the fuel requirement per month to 1,800 liters for the units to effectively monitor the waters” (P: 188-191). Comment: That there are 40 vessels and only 6 have seamen education. 10 mechanical people who can fix the technical problems with the boats that the police have. Yet again, the training has to happen by donors or foreign because the government can’t be able to finance their own personnel training. That should be worrying. The last issues that the boats can be used as much they can because of the use of 20 liter per hour. They miss the 1600 liters they need to function, because they are only allocated 200 liters. Show’s a mismatch of the use of funds for this part of the UPF.
Uganda Prison Service:
“By June 2015, the population of prisoners stood at 45,092, exceeding the available capacity by 28,575 inmates (occupancy level is 273%). Some prisons are overcrowded, housing up to 3 times their designed holding capacities” (P: 197). Comment: The government might not be expected to deliver at hotel to the inmates in prison. But to congestion them like cattle or having housing for them that creates diseases and poor hygiene; shows that the punished people in prisons get not only time to serve as convicts, but also get conditions that makes their stay a health hazard.
Funds of Consolidated Funds:
“UGX.2,808,413,252 was reported in the statement of financial position as cash and cash equivalent at the end of the financial year. The unspent funds should have been transferred to the consolidated fund by close of the year however, UPS did not remit the funds to the condolidated fund” (P: 195). Comment: This here proves that this government outfit doesn’t have the properly functioning accounting practices since they don’t follow the laws for unused allocated funds.
Office of the Auditor General – The Annual Report for the Year Ended 30th June 2015 – Central Government and Statutory Corporations 30th June 2015.
On July 27, 2015, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Somalia:
Since 1991, Somalis have suffered greatly from civil war. The economy deteriorated as the physical infrastructure was destroyed. In addition to the loss of lives, the war worsened the population’s living conditions, now among the lowest in the world. Even though the political and security situations remain challenging, Somalia has made tremendous progress since resuming relations with the IMF on April 12, 2013. The IMF has been actively involved in providing technical assistance and policy advice in its key areas of expertise, which laid the groundwork for this Consultation. While Somalia has been welcomed back as an active member of the Fund, it remains ineligible for financial assistance pending the clearance of its longstanding arrears. Arrears clearance will be an important part of normalizing relations with the international community and establishing a roadmap to debt sustainability.
As a result of the civil war, all Somali state institutions are severely impaired. Improving governance in key state institutions is critical for progress on economic reconstruction and development. The federal government, working with the international community, has taken steps to improve governance based on the rule of law and the application of international good practices for fiscal and financial operations. IMF technical assistance is largely devoted to enhancing governance in the ministry of finance and the central bank. Rebuilding critical infrastructure and delivering basic social and economic services will be crucial for the new government to gain the trust of the Somali people, advance the process of national reconciliation, and to extend federal government authority over all parts of the country.
Economic activity is estimated to have expanded by 3.7 percent in 2014, driven by growth in agriculture, construction, and telecommunications. Consumer price inflation was 1.3 percent. For 2015, real growth is projected at 2.7 and inflation should remain subdued at about 4 percent. With modest progress on the security front and an absence of drought, medium-term annual growth should be about 5 percent. Nevertheless, growth will remain inadequate to redress poverty and gender disparities.
Budget preparation and implementation is fraught with difficulty due to deficiencies in revenue mobilization and expenditure pressures that exceed available resources. The budget consists largely of salary and security expenditures contained by strict cash rationing. Deficits have been financed mostly through arrears accumulation. Similarly, the 2015 budget was prepared on a zero cash balance basis with optimistic revenue forecasts and weak commitment control, leading the federal government to ration cash and incur arrears to the defense forces, civil servants, and suppliers. On July 19, an extraordinary session of the Cabinet, chaired by the President, approved and sent to Parliament a revised budget for 2015.
The formal financial sector consists of the central bank, six banks with provisional licenses, and nine licensed money transfer firms. The sector is small and nascent while there is reportedly a large informal sector. The central bank of Somalia (CBS) faces challenges in building financial sector supervision due to technical and human resource constraints. The economy is predominantly dollarized and cash is scarce, particularly in lower denominations. Somali banknotes are not readily available, creating problems for the poorest.
The 2014 current account deficit is estimated at US$644 million (11.3 percent of GDP). Trade consists mostly of exports of livestock to Gulf Cooperation Council countries and imports of foodstuffs from neighboring countries and the Indian subcontinent. The trade and income deficits were US$2,663 million and US$450 million, respectively, partially covered by remittances of US$1,333 million and other transfers of US$1,137 million. The deficit was financed by foreign direct investment of US$434 million, especially in telecommunications, electricity, and hotels, and donor capital transfers of US$150 million.
External debt was estimated at US$5.3 billion (93 percent of GDP) at end-2014, preponderantly arrears. Debt data covers most creditors, excludes commercial debt, and shows obligations to: (i) multilaterals (US$1.5 billion); (ii) Paris Club creditors (US$2.3 billion); and, (iii) Non-Paris Club creditors (US$1.5 billion). Based on a preliminary assessment, Somalia lacks the ability to service its debt in the medium term.
Executive Board Assessment2
Executive Directors welcomed Somalia’s reengagement with the Fund, setting the stage for its first Article IV consultation since 1989. Directors agreed with the thrust of the staff appraisal. They noted that, following the protracted civil war, the country is facing daunting challenges. The first priority is to continue building institutions and administrative capacity, while undertaking key structural reforms to spur inclusive growth and reduce poverty. Directors underscored the importance of continued assistance from the international community to support the authorities’ efforts. They welcomed the launch of the Trust Fund for Capacity Development, and highlighted the important role of Fund policy advice and technical assistance.
Directors stressed the need for decisive steps to build fiscal discipline, underpinned by realistic budgeting and effective implementation systems. They welcomed cabinet approval of a revised budget for 2015 that will avoid new arrears by raising revenues and rationalizing wages and services and other recurrent spending. Going forward, Directors stressed the importance of budgeting within a medium-term fiscal framework, based on sound fiscal principles and transparent reporting, and a public expenditure review to promote the allocation of resources towards investment in human capital and infrastructure.
Directors encouraged the adoption of sound mechanisms to ensure effective and transparent management of prospective natural resource wealth. They recommended building institutions consistent with international best practices to ensure that natural resource exploitation maximizes benefits for Somalis. They also stressed the need for clarity regarding the delineation of authority between the federal government and sub-national entities.
Directors supported ongoing efforts to strengthen the Central Bank of Somalia’s capacity and governance structure, with support from the Fund and development partners. They cautioned that currency reform should not be implemented until all prerequisites are in place, in order to safeguard policy credibility.
Directors stressed that elaboration of a financial sector roadmap will be a critical first step to build credibility in licensing and supervising money transfer firms, in order to help channel remittances through the international banking system. They also recommended bringing the AML/CFT framework in line with international standards. Other priorities include preparing and approving additional prudential regulations, and strengthening compliance.
Directors encouraged the authorities to improve statistical capacity, in order to enhance the scope, quality and timeliness of economic data compilation, with technical assistance from the Fund and development partners.
Directors noted Somalia’s longstanding arrears to the Fund and other creditors, and encouraged the authorities to continue to work towards a pathway for arrears clearance and eventual debt relief. They noted that, in due course, the establishment of a track record of cooperation with the Fund on policies and payments in the context of a well-designed staff-monitored program (SMP) would be a key step in the process of arrears clearance and normalization of relations with the international community as a whole. Directors stressed the need for sustained international support and cooperation, and welcomed the formation of the Technical Working Group on Somalia’s Debt.