OFFICE OF THE AUDITOR GENERAL THE REPUBLIC OF UGANDA

Transcription

1 OFFICE OF THE AUDITOR GENERAL THE REPUBLIC OF UGANDA REPORT AND OPINION OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF KOLE DISTRICT LOCAL GOVERNMENT FOR THE YEAR ENDED 0 TH JUNE 201

2 REPORT AND OPINION OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF KOLE DISTRICT LOCAL GOVERNMENT FOR THE YEAR ENDED 0 TH JUNE 201 THE RT. HON. SPEAKER OF PARLIAMENT Introduction I have audited the accompanying financial statements of Kole District Local Government for the year ended 0th June 201. These financial Statements comprise of the statement of financial position as at 0 th June 201, statement of financial performance, statement of changes in equity, cash flow statement together with other accompanying statements, notes and accounting policies. Management Responsibility for the Financial Statements Under Article 16 of the Constitution of the Republic of Uganda and Section 8 of the Public Finance and Accountability Act, 200 and section 6 and 86 of the Local Governments Act 1997 as amended, the Accounting Officer is accountable to Parliament for the funds and resources of the Local Government. The Accounting Officer is responsible for the preparation of financial statements, in accordance with regulation 68 of the Local Governments Financial and Accounting Regulation, 2007 and for such internal controls as management determines necessary to enable the preparation of financial statements that are free from material misstatements whether due to fraud or error. Auditor s Responsibility My responsibility as required by Article 16 of the Constitution of the Republic of Uganda, Section 87 of the Local Government Act and Sections 1, 16 and 19 of the National Audit Act, 2008 is to express an opinion on these statements based on my audit. I conducted my audit in accordance with the International Standards on Auditing(ISA)/International Standards of Supreme Audit Institutions (ISSAIs). Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. 1

3 An audit involves performing audit procedures to obtain evidence about the amounts and disclosures in the financial statements as well as evidence supporting compliance with relevant laws and regulations. The procedures selected depend on the Auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the Auditor considers internal controls relevant to the entity s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Part A of my report sets out my unqualified opinion on the financial statements. Part B which forms an integral part of this report presents in detail, all the significant audit findings made during the audit which have been brought to the attention of management. PART "A" Unqualified Opinion In my opinion, the financial statements of Kole district as at 0 th June 201 are prepared, in all material respects, in accordance with the Local Governments Financial and Accounting Manual, 2007, the Local Government Financial and Accounting Regulations, 2007 and the Local Governments Act cap 2 (as amended), of the Laws of Uganda. John F.S. Muwanga AUDITOR GENERAL 19 th February,

4 PART "B" KOLE DISTRICT DETAILED REPORT OF THE AUDITOR GENERAL FOR THE FINANCIAL YEAR ENDED 0 TH JUNE INTRODUCTION In accordance with Article 16() of the Constitution of the Republic of Uganda, I am required to audit and report on the public accounts of Uganda that is to say, all public offices including the courts, the central and the local government administrations, universities and public institutions of the like nature and any public corporation or other bodies or organizations established by an Act of Parliament. Accordingly, I carried out the audit of Kole District to enable me report to Parliament. 2.0 Audit Objectives The audit was carried out in accordance with International Standards on Auditing and accordingly included a review of the accounting records and agreed procedures as was considered necessary. The audit was carried out with regard to the following objectives:- a. To verify whether the financial statements have been prepared in accordance with the requirements of the Local Governments Financial and Accounting Manual 2007 and the Local Governments Financial and Accounting Regulations 2007; and fairly present the income and expenditures for the year and of the financial position as at the end of the year. b. To verify whether all the funds of the entity were utilized with due attention to economy and efficiency and only for the purposes for which the funds were provided. c. To verify whether goods and services financed have been procured in accordance with the PPDA Act. d. To evaluate and obtain sufficient understanding of the internal control structure of the entity, assess control risk and identify reportable conditions, including material internal control weaknesses

5 e. To verify whether the management of the funds of the entity was in compliance with the Government of Uganda financial regulations. f. To verify whether all the necessary supporting documents, records and accounts have been kept in respect of all activities, and are in agreement with the financial statements presented..0 AUDIT METHODOLOGY The following audit procedures were undertaken:- a. Revenue Obtained all schedules of all revenues collected and reconciled the amounts to the cashbooks and bank statements of the entity. b. Expenditure The payments vouchers of the entity were examined for proper authorization, eligibility and budgetary provision, accountability and support documentation. c. Internal Control System Reviewed the internal control system and its operations to establish whether controls were applied throughout the period. sound d. Procurement Reviewed the procurement of goods and services under the various departments during the period under review and reconciled with the approved procurement plan. e. Fixed Assets Management Reviewed the use and management of the assets of the entity during the period under review. f. Financial Statements Examined, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessed the accounting principles used and significant estimates made by management; as well as evaluated the overall financial statement presentation.

6 .0 ENTITY FINANCING Kole District is financed by grants (Conditional and Unconditional) from Central Government, donations and locally generated revenues from taxes, fees, licenses and charges. During the year, the district received grants totaling to UGX10,90,8,08 from Central Government, UGX 107,907,916 from donations and UGX 77,177,70 from locally generated revenues. The total revenue of UGX 11,089,52,96 constituting 91 % of its approved budget estimates of UGX 12,21,55, Detailed Audit Findings This section outlines the detailed audit findings, management responses thereof and my recommendations. 5.1 Funds not Accounted for Regulations 2 and (2) of the LGFARs of 2007 require funds advanced for Council activities to be properly vouched and accounted for within a month. It was observed that a sum of UGX 2,265,000 remained unaccounted for at the time of audit contrary to the regulation as shown in Appendix 1. In the absence of the accountability documents, I was unable to confirm that the funds were used for the intended purposes. I advised the Accounting Officer to ensure that the funds are accounted for or else recovery be made from the beneficiaries. 5.2 Irregular levy of 2% Development Fees Regulation 1 (o) of Part IV of the fifth schedule of the LGA CAP 2 requires Local Government councils to seek authority from the Minister of Local Government to levy any other charge or taxes as source of revenue. A sum of UGX 7,05,800 was collected from contractors payments as % development tax without the approval of the Minister of Local Government. The practice could 5

7 compromise quality of work and increase the cost of service delivery as shown in Appendix II I advised the Accounting Officer to halt the levy until authority is granted by the Minister of Local Government as required by the law. 6

8 APPENDIX I. UN-ACCOUNTED FOR FUNDS DATE VOUCHER NO. LGMSD P 17/9/201 27/9/2 01 //201 17/0/ 201 5/5/201 2/5/2 01 WORKS 18/11/20 28/11/ //201 1/0/ //201 16/0/ 201 EDUCAT ION PAYEE Details UGX Remarks Okello Obong Felix Ogwen y B John Okello Obong Felix Ocen Patrick OkukO wera OkukO wera No activity report data collection in sub 2,6,000 counties No activity report rd quarter monitoring 2,050,000 and evaluation No accountability LGMSDP monitoring 1,980,000 attached and evaluation No activity report monitoring roads 2,090,000 attached, works- quarter one allowances for technical staff not acknowledged, fuel not accounted for No accountability supervision and 2,90,000 monitoring of quarter two roads activity No activity report, monitoring PRDP,,000 fuel not accounted projects under works for 0 7

9 6/26/ Jun OwidiB payment for school no attendance onyface inspection and support 1,28,000 sheet attached, no supervision minutes if meeting carried out, no activity report on inspection carried out PRODU 0 CTION /26/201 6-Mar Agech mobilization and unaccounted for-no Ambros sensitization on 2,89,000 attendance lists, e restocking sensitization reports, fuel unaccounted for /8/201 1-Apr Agech compilation of unaccounted for- Ambros restocking beneficiary 2,096,000 activity report, e list typing, printing and binding paid for before the activity took place, beneficiaries not trained, WATER /2/201 7-Apr Atine support and no attendance Leo supervision of water 1,010,000 sheets, fuel still Conrad source for 2nd and rd running at fuel quarter station etc. GRAND 2,265,000 TOTAL 8

10 Appendix II-Development fees DATE EDUCAT ION 8/26/201 8/26/201 8/26/201 8/26/201 8/28/201 8/28/201 9/10/201 9/10/201 11/21/ /21/ /21/20 1 VOUCH ER NO. 7-Aug 11-Aug 17-Aug 19-Aug PAYEE Details UGX Amount Deducted Amuju plumbing and Engineering Sako General Fund A.L Investment BakalolaEnt 2-Aug Midnorth Investment 25-Aug Avor Construction Co 1-Sep Generation lifespan Sep Necarol investment -Nov Sapi Enterprises U -Nov Fear God Timber workshop & Building Cont 8-Nov Acobo Services construction of 5 stance drainable latrine at AcanKado P/s 12,82,6 28,000 supply of 72 desks at AdyangAlelbanya p/s 7,590,60 215,500 5% retention on 5 stance latrine at Acem p/s 1,96,985 0,000 supply of 5 desks, tables and chairs to Agoma and 7,191, ,600 Apiioguro p/s construction of 5 stance drainable latrine at Wipip P/s 6,7,12 1,000 construction of twin staff hse at Agoma P/s,225,29 770,000 construction of 5 stance 7,500, ,500 drainable latrine at Aberdyangoto P/s retention on construction of 5 stance at Igel P/s 2,296,72 6,000 supply of furniture to Adelogo P/s,65,810 1,000 furniture at Ayor memorial and Alelibanya P/s 8,828, ,00 payment for construction of classroom block at Aberdyangoto P/S 22,86, ,000 9

11 2/18/201 2/25/201 /11/201 /2/201 /26/201 /26/201 6-Feb Kole General Technical Service 9-Feb Acobo Services 1-Mar Muntu Investment 5-Mar Rwot En Teko Enter 1-Mar BakalolaEnt 1-Mar Alwodo enterprises co construction of twin staff house at Agwet Primary school 1,020, ,000 construction of classroom block at Aberdyangoto p/s 8,010, ,200 construction of twin staff house at AyorMem P/s 2,215,80 5,000 construction of twin staff hse at Olipa P/s 12,066,20 197,500 construction of 5 stance latrine at Atan p/s 5,280, ,000 construction of 5 stance latrine at Angic P/s 5,97,250 1,200 WATER 0 0 /1/ Mar 5/1/201 - May 6/27/201 Jun 9- Galaxy Agro Tech U Bosgraace Drilling Co Bosgraace Drilling Co payment for drilling 10 boreholes in Kole 58,08,969 1,0,900 payment for borehole construction,86,0 750,000 payment for shallow well 27,75, ,000 TOTAL 05,21,8 7,05,800 10