AG queries use of Covid response cash

The Auditor General (AG) has cited gross irregularities in the utilisation of money appropriated for interventions to control the Covid-19 and avert the adverse effects of the pandemic on the economic and social wellbeing of citizens.

According to the 2020/2021 annual AG’s report, different ministries, departments and agencies (MDAs) diverted funds and, or did not follow the required processes in utilising the funds.

AG John Muwanga presented the report for the financial year ending June 2021 to Parliament yesterday.

According to the report, the MDAs diverted Shs67b of the Shs676b meant to settle domestic arrears and improve liquidity within the local business community.

“I noted that 90 percent of the funds were used appropriately for the intended purpose; however, I noted a diversion to pay for unrelated expenditure worth Shs4.897b (0.7 percent), unsupported domestic arrears of Shs27.38b (four percent), and payment for contested/rejected domestic arrears of Shs1.245b (0.2 percent). I also noted that Shs33.8b (five percent) was used to settle international obligations thus did not contribute to the stated objective since the funds were externalised” the report states.

The Uganda Microfinance Centre came under scrutiny for advancing huge loans to entities with no collateral. Of the total Shs56.8b meant for lending to different businesses, Shs18.64b was given out with no clear backup plan of recovering the funds.

“I noted that microfinance centre lacked capacity at zonal offices to appraise loans, which was also manifested in the unbalanced approach for loan appraisals. A total of Shs13b (23 percent) was disbursed to applicants without microfinance centre finalising the perfection of securities for the collaterals. Shs2.5b (4 percent) was irregularly advanced to applicants contrary to the credit policy. A total of Shs3.149b (six percent) was advanced to applicants with no collateral,” the report states.

The  microfinance centre also came under the spotlight for the advancement of Emyooga funds to Saccos with no back up plan of recovering the money and proper mechanisms of following up on the effectiveness of the projects. 

 “It was, however, noted that although the Saccos were in the process of obtaining operational licences, no memorandum of understanding had been entered into between the disbursing entity and the beneficiary Sacco,” the report further reads.

The Emyooga programme aims at alleviating poverty from the parish level as opposed to centralised interventions.

According to the report, Shs260b was allocated for the programme in the last financial year, and Shs219.4b has been disbursed. Of this, however, Shs34.7b (1.3 percent) has not reached the intended beneficiaries.

Despite the hit taken by businesses and endless cries for intervention, 54 percent of the more than Shs500b allocated for the recapitalisation of the Uganda Development Bank to ease access to capital, is lying idle in commercial banks.

“From the amount disbursed, funds worth Shs234b (43 percent) had been paid out to various beneficiaries. By the time of the audit, the balance of Shs292.66b was still deposited in commercial banks,” the report states.

Health ministry

The report also pins the Ministry of Health for diversion of funds.

“I noted a diversion of funds totaling Shs7.98b,” the report reads.

It continues to indicate that the funds were used to pay for Covid-19 vaccines, whose delivery was delayed due to global demand.

The ministry has also been faulted for delayed installation of intensive care equipment in Gulu, Mbarara, Bombo, and Lacor hospitals.

The AG, however, applauded the Health ministry for its achievements in responding to the pandemic.

“Shs253.59b was released and received by the Ministry of Health. .. All the planned activities were undertaken amid many challenges,” the report states.

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