An internal audit report by Kampala Capital City Authority (KCCA) has for the second quarter of 2019/2020 cited accountability queries in the ongoing two donor-funded projects on sanitation and climate in Kampala.
The auditors say proper procedures were not followed during the procurement and implementation of the Kampala Climate Change Action Strategy that was established to reduce carbons in the city, and the Global System for Mobile Association (GSMA) – using technology to improve sanitation.
The two projects are funded by the European Union (EU) and United Kingdom’s Department for International Development (DFID).
The January 24 audit report states that there was delayed procurement and implementation of project activities, absence of communication plan and inconsistencies in financial report amounts. It also cited delayed recruitment of staff and underutilisation of funds.
The audit team led by KCCA director of internal audit, Mr Moses Bwire was to ascertain the level of compliance of the project activities.
But the report said the inconsistencies in financial reports put the reputation of KCCA at risk and breached the Memorandum of Understanding which they had made with donors.
Climate change project
The three-year project, which commenced on January 1 2017, was intended to build the city’s resilience to the impacts of climate change and set the city on low carbon emission path.
It was expected to be financed at €1.18m (Shs4.9b) as per the grant contract. Of this, EU would contribute €951,504 (Shs3.9b) and KCCA €237,877 (Shs987m).
Section 44 (1) of the Public Finance Management Act, 2015, gives the Minister of Finance the authority to receive grants made to government or by a foreign entity.
But auditors found out that KCCA signed the contract on December 14, 2016 and the initial pre-financing disbursement received from EU on December 27, 2016, before the minister and the Solicitor General (SG) approved the grant.
The audit shows that the minister’s authorisation was made in a January 4, 2017, letter and the SG cleared the agreement on March 14, 2017, three months after the first instalment of the money had been given to KCCA.
“In future, plans be made to ensure that approvals from the minister responsible for Finance and the Solicitor General are obtained prior to signing of the finance agreements with development partners,” auditors wrote.
The audit further states that while the EU had made a contribution of Shs2.2b by September 30, last year, KCCA had made none.
KCCA management, the auditors show, acknowledged the error and pledged that relevant clearances will be sought prior to funding agreement signing in case there is a new project.
Though the project procurement plan was developed and approved for implementation by KCCA executive director in August 2017, the audit shows that there were some delays in implementing the project procurements as planned.
There were also some inconsistencies in the reporting of the pre-financing received towards the implementation of the project activities.
For instance in KCCA’s submission to the EU dated April 29 2019, it was indicated that by December 30, 2018, cumulative sum of €804,414 (Shs3.3b) had been received to facilitate the project implementation.
But the auditors show that the project cash books from the same period indicated that only €590,324 (Shs2.4b) was received during the period.
KCCA received a grant of £300,000 (Shs1.3b) from Global System for Mobile Association. It was supposed to be matched by government through KCCA with £300,000 (Shs1.3b) in cash or in kind.
The grant was meant for upgrading the Geographical Information System (GIS) tracking system, build capacity and promote pit emptying businesses in partnership with National Water and Sewerage Corporation, GIZ, and the private emptiers’ associations.
Mr Peter Kaujju, the KCCA’s head of public and corporate affairs, said the technocrats had responded to all the queries raised by the auditors
“We are transparent in whatever we do as an institution and of course during the auditing process, our technical staff respond to all those queries. The auditing process also helps us to rectify any errors made during execution of our duties but I can assure you that all the issues raised were responded to,” he said.