Government report warns public funds unsafe

As a wave of inquiries into suspected financial malpractice sweeps through many government departments, a new internal audit which closed two months ago suggests there has been a break down in accountability across all public offices.

Secretary to Treasury Keith Muhakanizi yesterday confirmed the dire findings of the sector-wide investigation, agreeing that taxpayers’ money and other assets is not safe in government departments.

“The summary of that report is that the money is not safe. It means ministry of finance is not satisfied with the way public finances are being managed. We are going to write to all accounting officers to improve management of public finances,” he said.

The report showed that no ministry, including State House and Office of the President, had posted satisfactory management of public resources.
According to the 2011/2012 internal audit and inspectorate annual consolidated report dated August 31, ministries like Defence, Internal Affairs, Education and Health, registered unsatisfactory accountability of funds.

The report signed off by commissioner for internal audit (Finance) , Dr Fixon Okonye, describes unsatisfactory as significant or pervasive deficiencies in governance, risk management, and control processes, such that reasonable assurance regarding the achievement of objectives under review cannot be provided.

Other ministries found wanting are: Ministry of Justice and Constitutional Affairs, Ministry of Works and Transport, Ministry of Local Government, Ministry of Public Service and Ministry of Agriculture, Animal Industry and Fisheries.

Judiciary and Courts of Judicature, Directorate of Public Prosecutions, Uganda Police Force, Uganda Prisons National Citizenship and Immigration Control Directorate.

Mulago National Referral Hospital, which was described as “needs improvement”, and all other national referral hospitals had posted poor management of monies and assets.

On payroll audit, only Defence posted satisfactory results. Others did poorly, with some having unclear number of staff on payrolls, sometimes without documentation files. Civil servants are also denied incremental entitlements.

The report also highlights a haemorrhage of public funds through payments to consultants who have overtime turned into permanent government employees.

It showed that while consultants were hired “to provide independent, objective, assurance and consulting services designed to add value and improve government operations in risk management, control and governance processes, they had served to increase the wage bill.

It was found that “the high fees paid to these consultants may be avoidable costs … since most of the services provided by individuals can be performed by public servants who are unfortunately unfairly remunerated.”

The audit states that while public servants have contracts that clearly specify the terms of service, tenure of service and other conditions, consultants are assumed to be appointed under clear terms of reference and for specific durations.

“In practice, however, many consultants perform duties for which they were not appointed for, in areas that they may not have the technical competencies and have continued to serve for longer periods as if they are on permanent and pensionable terms,” the report adds.

It reveals that the cost of the services of the consultants is on the increase, ranging from $3,000 (about Shs7m] to $15,000 (about Shs32m) per month, excluding other benefits like accommodation and utilities.

“Consultancy in GoU has a very poor image. Most people see consultancy as an expensive luxury, allowing overpaid individuals to float around doing very little and teaching people nothing,” the report states, adding: “Consultancy projects often end in results that seem like little more than stating the obvious and it is sometimes hard to justify the level of expenditure.”

It reveals that the selection criteria for projects staff sometimes appears doubtful and “the biggest problem for consultants and experts is that they often don’t get results.”

“Their assignments can sometimes be scrapped part way through implementation, or their recommendations can simply be ignored.
Over time, Finance is reported to have contracted a number of consultants for Local Governments, the Treasury, the Directorate of Budget and Directorate of Economic Affairs.

“The total amount paid by the project to its staff annually amounts to Shs8.1 billion,” reads the report. Further scrutiny of the payroll for consultants also reveals inconsistencies.

The report says officers with the same designation performing similar duties are paid different amounts. “Some accounts officers are paid Shs3,077,527 per month while others Shs4,176,403; some financial management specialists are paid $5,250 and others $6,300 and $6,615.”

It also reveals that staff on the project payroll also hold public service designations and have been promoted by the Public Service Commission.

In Mulago, foreign consultants receive in addition to travel tickets for self and family, a monthly pay of $2,500 (about Sh6m) reportedly paid three months in advance plus other benefits while Ugandan senior consultants get a gross pay of Shs2.7m.

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Audit issues in selected departments

Ministry of Gender.

Failure to pay staff incremental entitlements, missing documentation of employee files, understaffing, payment of salaries under wrong programmes.
Ministry of Foreign Affairs.

Lack of payments acknowledgement, unaccounted for advances, poor management of cash, untidy storage facilities, uncontrolled access to the registry, excess staff, abuse of study leave.
Ministry of Trade. Unfilled vacancies, poor assets maintenance, improper maintenance of the stores ledger, poor keeping of employees personal records, unaccounted for advances, irregular hiring of forensic auditors, variance in salary payment.
Office of the President.

Patriotism Secretariat: Diversion of Shs42,351,000, uncollected funds, delayed accountabilities from National Leadership Institute, Kyankwanzi, poor state of RDCs’ offices, violation Of Procurement Act at NALI
State House. Outstanding domestic arrears, outstanding utility bills, inadequately supported bills.
Mbale Regional Referral Hospital

Unupdated staff list, staff overdue for retirement, absence of inventories requisition books and issue vouchers from stores, unreconciled discrepancies of drugs and sundries delivered by NMS.