Auditor General exposes huge theft of public funds

Deputy Speaker Thomas Tayebwa (right) receives the 2023/2024 Financial Year audit report from Auditor General Edward Akol at Parliament on January 15, 2025. PHOTO/DAVID LUBOWA
What you need to know:
- Mr Akol warned that if reforms are not implemented, Uganda’s pension sector could become unsustainable, with taxpayers footing a Shs4 trillion pension and gratuity bill by 2034.
The Auditor General yesterday released the 2023/2024 Audit Report, revealing rot in government agencies and local governments (LGs). Presenting the report at the Speaker’s office, Mr Edward Akol revealed that the government overpaid pensioners to the tune of Shs31.2 billion in the last financial year (FY). This means that 3,695 pensioners received more gratuity and pension benefits than they were entitled to.
Specifically, 1,502 pensioners were overpaid gratuity benefits amounting to Shs22.3 billion in 19 ministries, departments, and agencies (MDAs) as well as 115 local governments (LGs). Additionally, 2,193 pensioners received overpaid pension benefits totaling Shs8.9 billion across 23 MDAs and 104 LGs.
“Our pension system audit has revealed critical challenges that demand attention,” Mr Akol said.
He warned that if reforms are not implemented, Uganda’s pension sector could become unsustainable, with taxpayers footing a Shs4 trillion pension and gratuity bill by 2034.
“The sustainability of our pension system faces mounting pressure from multiple fronts such as early retirement policies allowing exits at the age of 45 and enhanced pay for science professionals. I project a 12 percent annual increase in retirees over the next decade, with pension liabilities potentially exceeding Shs4.5 trillion by 2034 if left unchecked,” he added.
The Parish Development Model (PDM) also came in for criticism, with the auditors showing that the nearly Shs900 billion dished out in the poverty alleviation scheme was forked out using fake security documents.
“PDM noted multiple loan approvals and payments to 902 individuals who received loans amounting to Shs896 billion. The individuals had duplicate National Identification Numbers (NIN), same names or same phone numbers,” Mr Akol’s report reads in part. Whereas all the money was supposed to be sent through Wendi, more than Shs41.7 billion was disbursed outside the management system.
Elsewhere, some savings and credit cooperative organizations (saccos) were found to have undertaken ghost projects. Some of the said saccos, the Auditor General noted, didn’t have any physical offices to ease their tracing.
“Whereas a lot has been achieved to implement the programme, certain gaps still exist: the household data collection stands at 79.9 percent, with population registration at just 46.3 percent, lack of registered offices, implementation of ineligible projects, lack of accountability in certain instances, non-existent projects, among others,” the Auditor General noted with dismay.
It was also found that vital drugs worth Shs316.65 billion expired, with the Office of the Auditor General further revealing that the loss increased by Shs33 billion during the FY2022/2023.
“During the year under review, Covid-19 vaccines, ARVs, test kits, and related supplies amounting to Shs316.65 billion were expired and non-viable. This is an addition to the expiries worth Shs33 billion for the previous financial year, implying an increase of almost 860 percent in one year,” the report reads in part, adding, “This is wastage of government resources which would otherwise have been utilized for other pressing needs.”
Similarly, it was established that “Mulago National Referral Hospital has an intensive care unit with a bed capacity of 27 beds but currently only 15 beds are occupied, which is 56 percent occupancy due to lack of professional healthcare staff.”
The Auditor General’s findings also revealed that about Shs150 billion in grant money meant for constructing secondary schools and roads remains unused. The government entered into nine agreements in the last financial year, securing $127.9 million (Shs469.4 billion) from six development partners.
However, two key projects, the Uganda Support to Municipal Infrastructure Development Additional Financing (USMID-AF) for roads and the Uganda Intergovernmental Fiscal Transfers Programme (UgIFT) for schools, only achieved a 54 percent absorption rate for their combined $87.2 million (Shs320 billion) value.
Concerns were also raised about the underutilization of the national budget. For FY2023/2024, the initial budget of Shs52.7 trillion was revised upward to Shs61.4 trillion. However, only Shs54.3 trillion was warranted, leaving an unfunded gap of Shs7.1 trillion. Of the warranted funds, only Shs47 trillion was spent.
“This underutilisation is impacting service delivery across government corporations and defeats the purpose of increasing the budget,” Mr Akol remarked.
The report noted inconsistencies in the number of learners slated to receive capitation grants, with the numbers on the government Education Management Information System (EMIS) and the lists presented by the heads of schools.
According to the report, a review of the enrolment numbers in the EMIS and actual enrolment as per schools’ reports in the 1,111 sampled schools in 95 local governments revealed inconsistencies in the enrolment figures.
For instance, 85,785 pupils were on the head teachers’ enrolment but not on EMIS. Also, 73,971 pupils were on EMIS enrolment but not on head teachers’ enrolment. The head count of the officials from the Auditor General's office in 684 primary schools showed 664,103 pupils.
However, the enrolment by head teachers as at the end of term one showed 681,464 pupils while EMIS showed 811,993 pupils. Some schools received more capitation grants, amounting to Shs1 billion in 19 schools.
The Auditor General also reported a 2.2 percent growth in Uganda’s external debt, rising from Shs53.19 trillion to Shs54.37 trillion, an increase he said is primarily driven by borrowing from multilateral creditors. This borrowing has swelled from Shs33.06 trillion to Shs35.1 trillion.
The Office of the Auditor General also raised alarm on the fiscal deficit within the government, highlighting that while domestic revenue, including grants, has grown steadily from Shs23.4 trillion in FY2021/2022 to now Shs30.9 trillion in FY2023/2024, the expenditure has also increased from Shs44.4 trillion to Shs47 trillion.
“This has resulted in a fiscal deficit of Shs16.1 trillion, though this has decreased from Shs21.1 trillion in 2021/2022,” Mr. Akol remarked.
The Auditor General also revealed that while Uganda has seen some positive trends—notably a 9.9 percent reduction in commercial bank debt from Shs7.15 trillion to Shs6.4 trillion and modest decrease in bilateral debt—there is still a risk of compromising fiscal sustainability and constraining the country’s ability to fund essential domestic programmes.
In road maintenance, Mr Akol reported that of the 303 road projects worth Shs35.8 billion, 159 projects had significant defects. These included uninstalled culverts and inadequate maintenance.
On January 15, Mr Thomas Tayebwa, the Deputy House Speaker, lauded Mr Akol for stitching together a detailed report on the MDAs plus other state authorities.
“I am very happy that we are now going to go deeper. So you have supported us, our oversight role is going to be more exciting. You are going to see more people sweating as they appear before committees,” Mr Tayebwa stated, adding hard punishments should be meted out on accounting officers implicated in the report’s findings.
The Deputy House Speaker also wants the whip to be cracked on officials who fail to implement resolutions passed by Parliament on Auditor General Reports probed by Parliament.
“We are going to be very tough on implementing the recommendations of the Auditor General as adopted by Parliament. We cannot continue sitting and making declarations and they are not implemented,” Mr Tayebwa vowed.
“The public is saying that there is procurement of audit opinions, especially at the local government level. We kindly request you to fight that corruption. Kindly deal with the few bad apples that stain the image of your good office,” Mr Tayebwa added.
In the most previous (FY2022/2023) report, the immediate past Auditor General Mr John Muwanga reported: “6,307 employees were either confirmed dead, absconded, or retired by the time of validation. Out of these, 2,483 employees were removed from the payroll in time, while 3,824 were not deleted promptly and as a result, Shs23.62 billion was irregularly paid to them after their exit date.”
In the same report on the findings of the same year, Mr Muwanga also discovered: “1,818 individuals who were paid Shs56 million in the base month alone (i.e. February 2023), were non-existent and hence confirmed ghost employees.
Payments made to these employees could have led to a potential annual financial loss of Shs6.7 billion to the government.”
Highlights from the Annual Audit Report for the Audit Year Ended December 2024
The expenditure side of the budget was in excess of the revenue side by Shs5.5 trillion. Total expenditure supplementary budgets passed amounted to Shs8.9 trillion. Out of the total revised budget of Shs56.247 trillion, only Shs47.110 trillion (84 percent) was realized, resulting in a revenue shortfall of Shs9.137 trillion. Shs73.9 billion was lost in commitment fees due to unused loans.
Uganda’s external debt portfolio increased from Shs53.191 trillion in FY 2022/23 to Shs54.365 trillion in FY 2023/24. Continued increase in external debt could, in the long run, strain Uganda’s fiscal sustainability and limit resources available for domestic spending.
Pensioners were overpaid Shs20.9 billion. The Administration of the Judiciary Act significantly enhanced pensionable emoluments for judicial staff, leading to an exponential increase in pension liabilities without a comprehensive impact assessment.
A total of 170 beneficiaries in 124 PDM Savings and Credit Cooperative Organisation (Saccos) in 37 local governments had nonexistent projects. Out of 78 entities assessed, 11 (14 percent) made 63 procurements worth Shs59.02 billion, which were not in the procurement plans.