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 MOROTO DISTRICT LOCAL GOVERNMENT FOR THE YEAR ENDED 30 TH JUNE 2014

2 REPORT AND OPINION OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF MOROTO DISTRICT LOCAL GOVERNMENT FOR THE YEAR ENDED 30 TH JUNE 2014 THE RT. HON. SPEAKER OF PARLIAMENT Introduction I have audited the accompanying financial statements of Moroto District Local Government for the year ended 30th June These financial statements comprise the statement of financial position as at 30 th June 2014, 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 164 of the Constitution of the Republic of Uganda and Section 8 of the Public Finance and Accountability Act, 2003 and section 64 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 163 of the Constitution of the Republic of Uganda, Section 87 of the Local Government Act and Sections 13, 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. 2

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 Moroto District Local Government as at 30 th June 2014, are prepared, in all material respects, in accordance with the Local Government Financial and Accounting Manual, 2007, Section 31(6) of the Public Finance and Accountability Act 2003, the Local Government Financial and Accounting Regulations, 2007 and the Local Government Act cap 243 (as amended), of the Laws of Uganda. John F.S. Muwanga AUDITOR GENERAL 20 th Feburary

4 PART "B" MOROTO DISTRICT LOCAL GOVERNMENT DETAILED REPORT OF THE AUDITOR GENERAL FOR THE FINANCIAL YEAR ENDED 30 TH JUNE Introduction In accordance with Article 163(3), of the Constitution of the Republic of Uganda I am required to audit and report on the public accounts of Uganda and of 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 the Moroto District Local Government 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 Government Financial and Accounting Manual 2007 and the Local Government 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 e. To verify whether the management of the funds of the entity was in compliance with the Government of Uganda financial regulations. 4

5 f. To verify whether all necessary supporting documents, records and accounts have been kept in respect of all activities, and are in agreement with the financial statements presented. 3.0 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 operation to establish whether sound controls were applied throughout the period d. Procurement Reviewed the procurement of goods and services under the various department 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 evaluating the overall financial statement presentation. 5

6 4.0 Entity Financing Moroto District Local Government is financed by grants (Conditional and Unconditional) from the Central Government, development partners and locally generated revenues from taxes, fees, licenses and charges. During the year, the district received grants totaling to UGX 9,726,964,940 from the Central Government, UGX 788,942,973 from development partners and UGX 333,406,110 from locally generated revenues. The total revenue of UGX 10,849,314,023 constituted 96.4% of its approved budget estimates of UGX 11,256,225, Detailed Audit Findings This section outlines the detailed audit findings, management responses thereof and my recommendations. 5.1 Revenue Irregularities Irregular Levy of Development Tax Section 13 (o) of the Fifth Schedule of the Local Governments Act requires approval to be sought from the minister for levying any other form of Local Revenue not prescribed in the Act. The Council levied a 2% Tax on Capital Development contracts and collected UGX.36,443,774 without the Minister s approval, as shown in appendix i. Such a levy may compromise the quality of work as the contractor strives to maintain the profit margins. The Accounting Officer attributed it to the desire by the District to boost it local revenue. I advised the Accounting Officer to seek for the approval of the Minister of Local Government Lack of Revenue Assessments Paragraph 4.3 of the LGFAM (2007) requires the Accounting Officer to carry out proper assessment of the Council revenue regularly. 6

7 However, no revenue assessment was conducted during the financial year under review. Failure to conduct revenue assessment could have led to under collection of revenue of UGX.52,713,890 reflected in the financial statement. I advised the Accounting officer to ensure that local revenue assessment is carried out as required by the regulations. 5.2 Irregular payment of salary to dead and absconded teachers Section 9 (2) (b) of LGFAR 2007 requires the Accounting officer to ensure that the public moneys, property and resources for which he or she is responsible as accounting officer are properly managed and safeguarded. However, a review of the district payroll revealed that an employee who passed away in March 2014 and 7 Teachers who absconded from duty were still on the district payroll. This resulted in a financial loss of UGX.21,357,408 as shown in Appendix ii. The Accounting officer explained that the anomaly was due to delays by the Ministry of Public Service to delete staff from the payroll despite submission of pay change reports to the Ministry. I advised the Accounting Officer to engage the Ministry of Public Service with a view of recovery. 5.3 UnderStaffing The District has an approved structure of 129 member of staff however, out the approved posts only 75 (58.1%) are filled, leaving 54 vacant posts representing 41% of the establishment, as shown in appendix iii This was attributed to the ban by the Ministry of Public Service on recruitment and the difficulty of attracting and retaining workers in the region. Understaffing undermines service delivery. I advised the Accounting Officer to engage the Ministry of Public Service and the Ministry of Finance to ensure that the vacancies are filled. 7

8 Appendix i Irregular Development tax Vr No Date Account Details Payee Amount 7//2 18/02/2014 Education Committee 7//5 14/05/2014 Education Committee 4//6 16/06/2014 Education Committee 9//6 26/06/2014 Education Committee 13//6 27/06/2014 Education Committee 2% Development tax from Lokojo Trading Co ltd for construction of 3 unit staff at Nanduget 2% Development tax from Namaato Contractors for staff House at Nawanatau P/s teachers house 2% Development tax from Ojoga Ent for Construction of VIP latrine at Musas Ps Girls dometry 2% Development tax fromojoga and Apajoy Ent for construction VIP latrine at Musas Ps Girls dometry and wash rooms at Rupa Ps respectively 2% Development tax from Namaato contractors for construction of staff house at Nawanatau P/s 8 General fund 65,674 General fund 502,538 General fund 80,694 General fund 384,520 General fund 304,375 1//1 09/01/2014 LGMSD 2% Development tax for Supply of General Fund Portraits Supplied at UGX.6,300, ,000 4//2 18/02/2014 LGMSD 2% Developemnent tax on General Fund Rehabilitation of 10 Boreholes at 285,530 selected locations at cost of Ugax 14,276,500 1//6 13/06/2014 LGMSD 2% Development tax on Completion of General Fund 2public Toliets at District Qters- 168,986 Certificate 1 at UGX 8,449,300 3//6 27/06/2014 LGMSD 2% Devt Tax on Construction of 4 Unit General Fund waterborne toilet at District Service 123,433 comission offices,certificate 1=UGX 6,171,675 4//5 14/05/2014 Production 2% Devt Tax from supply of Goats at General Fund UGX.18,000, ,000 3//4 03/04/2014 Production 2% Devt Tax on payt of retention of General Fund UGX 1600,525 for Construction of 32,011 Nadunget Cattle Market 3//1 09/01/2014 Production 2% Devt Tax on payt of retention of General Fund UGX 1,528,940 for Fencing of small 30,579 holding Ground in Narwosi 3//12 11/12/2014 Production 2% Devt. Tax on Supply of stationary General Fund under framework contract based on 24,200 LPO 4//11 15/11/2013 Production 2% Devt tax on supply of Tyres by General Fund Wilmak at UGX 4,500,000 90,000 5//1 24/01/2014 NAADS 2% Devt.Tax on payment of General Fund UGX.2000,000 40,000 1//7 26/07/2013 NAADS 2% Devt tax on payment to Marlboro General Fund Motors at UGX.15,084, ,680 8//8 26/08/2013 Works 2% devt tax from KLR General fund 1,410,203 12//8 26/08/2013 Works 2% devt tax from marlboro General fund 152,800 9//8 26/08/2013 Works 2% devt tax from Bakati kati General fund 609,121 11//12 18/12/2013 Works 2% devt tax from KLR General fund 509,239 25//12 19/12/2013 Works 2% devt tax from Al-malik General fund 242,620 5//3 06/03/2014 Works 2% devt tax from KLR General fund 2,327,434 9//3 06/03/2014 Works 2% devt tax from Diidi General fund 549,327

9 2//4 03/03/2014 Works 2% devt tax from siro & bros General fund 257,631 5//4 08/11/2014 Works 2% devt tax from kamadi transtech General fund 198,400 7//5 22/05/2014 Works 2% devt tax from KLR General fund 2,050,000 11//5 29/05/2014 Works 2% devt tax from kamadi transtech General fund 313,800 1//6 05/06/2014 Works 2% devt tax from kadam General fund 200,000 1//8 26/08/2013 PRDP 2% devt tax from KLR PRDP A/C 698,842 2//8 26/08/2013 PRDP 2& devt tax from Omaniman PRDP A/C 512,460 5//8 27/08/2013 PRDP 2% devt tax from Solidarity PRDP A/C 101,640 7//8 28/08/2013 PRDP 2% devt tax from Kide PRDP A/C 412,549 1//9 02/09/2013 PRDP 2% devt tax from Sant Barco PRDP A/C 127,079 3//9 03/09/2013 PRDP 2% devt tax from Kenan PRDP A/C 28,963 8//9 10/09/2013 PRDP 2% devt tax from Lasa gen ent General fund 117,278 10//9 13/09/2013 PRDP 2% devt tax from Bakati kati PRDP A/C 180,000 1//10 03/10/2013 PRDP 2% devt tax from Kide PRDP A/C 653,184 5//10 03/10/2013 PRDP 2% devt tax Kidar technical PRDP A/C 101,531 3//11 06/11/2013 PRDP 2% devt tax from CRIID General fund 411,315 5//11 06/11/2013 PRDP 2% devt tax from Aswaki PRDP A/C 229,302 11//11 07/11/2013 PRDP 2% devt tax from Kidar General fund 216,857 11//11 07/11/2013 PRDP 2% devt tax from kidar General fund 147,735 13//11 15/11/2013 PRDP 2% devt tax from Ojoga PRDP A/C 123,331 2//12 02/12/2013 PRDP 2% devt tax from Ejok PRDP A/C 138,246 8//12 18/12/2013 PRDP 2% devt tax from KLR PRDP A/C 271,778 1//12 02/12/2013 PRDP 2% devt tax from CAB General fund 622,650 12//12 19/12/2013 PRDP 2% devt tax from CAB General fund 306,091 1//1 09/01/2014 PRDP 2% devt tax from Aswaki General fund 288,371 7//1 21/01/2014 PRDP 2% devt tax from RNR General fund 124,205 13//1 22/01/2014 PRDP 2% devt tax from RNR General fund 559,145 16//1 24/01/2014 PRDP 2% devt tax from kadam General fund 315,849 17//1 24/01/2014 PRDP 2% devt tax from Bakati kati PRDP A/C 249,600 19//1 24/01/2014 PRDP 2% devt tax from Lodamacha PRDP A/C 152,720 9//2 14/02/2014 PRDP 2% devt tax from kide General fund 698,869 12//2 14/02/2014 PRDP 2% devt tax from wilmark General fund 450,000 3//3 03/03/2014 PRDP 2% devt tax from Ojoga General fund 237,596 6//3 04/03/2014 PRDP 2% devt tax from Aswaki General fund 207,027 9//3 06/03/2014 PRDP 2% devt tax from KLR PRDP A/C 997,473 11//3 12/03/2014 PRDP 2% devt tax from Kadam General fund 356,469 14//3 12/03/2014 PRDP 2% devt tax from Diidi General fund 455,206 21//3 27/03/2014 PRDP 2% devt tax from Roalpa General fund 495,000 1//4 02/04/2014 PRDP 2% devt tax from Kawama General fund 421,905 5//4 02/04/2014 PRDP 2% devt tax from Kerisa General fund 672,019 8//4 08/04/2014 PRDP 2% devt tax from RNR PRDP A/C 1,043,879 14//4 15/04/2014 PRDP 2% devt tax from Kerisa General fund 640,043 19//4 16/04/2014 PRDP 2% devt tax from Ojoga General fund 274,971 22//4 16/04/2014 PRDP 2% devt tax from CRIID General fund 172,485 23//4 16/04/2014 PRDP 2% devt tax from Q west PRDP A/C 320,000 26//4 29/04/2014 PRDP 2% devt tax from Kadam General fund 9

10 278,167 28//4 30/04/2014 PRDP 2% devt tax from Ejok General fund 264,203 7//5 13/05/2014 PRDP 2% devt tax from Roalpa General fund 424,600 8//5 13/05/2014 PRDP 2% devt tax from Aswaki General fund 136,993 14//5 23/05/2014 PRDP 2% devt tax from kadam General fund 292,167 19//5 26/05/2014 PRDP 2% devt tax from Kerisa General fund 250,924 22//5 29/05/2014 PRDP 2% devt tax from Kawama General fund 806,190 26//5 29/05/2014 PRDP 2% devt tax from Diidi General fund 418,620 3//6 05/06/2014 PRDP 2% devt tax from kadam General fund 510,000 8//6 10/06/2014 PRDP 2% devt tax from Omaniman General fund 101,214 12//6 11/06/2014 PRDP 2% devt tax from Q west PRDP A/C 180,000 16//6 13/06/2014 PRDP 2% devt tax from Ashlee General fund 335,649 25//6 26/06/2014 PRDP 2% devt tax from Q west PRDP A/C 160,000 26//6 26/06/2014 PRDP 2% devt tax from Kide PRDP A/C 146,349 27//6 26/06/2014 PRDP 2% devt tax from Prime PRDP A/C 205,720 30//6 26/06/2014 PRDP 2% devt tax from Kadam PRDP A/C 239,600 31//6 26/06/2014 PRDP 2% devt tax from Kadam PRDP A/C 116,284 34//6 26/06/2014 PRDP 2% devt tax from Kawama PRDP A/C 388,177 35//6 26/06/2014 PRDP 2% devt tax from Achey PRDP A/C 206,656 38//6 30/06/2014 PRDP 2% devt tax from Gumare PRDP A/C 130,000 43//6 30/06/2014 PRDP 2% devt tax from RNR General fund 653,406 47//6 30/06/2014 PRDP 2% devt tax from Kadam General fund 141,347 50//6 30/06/2014 PRDP 2% devt tax from RNR General fund 352,922 4//10 03/10/2013 Health 2% developmentt tax from Karamoja General fund 48,945 contractors on retention of chain link fence at Nadunget health centre III 6//11 07/11/2013 Health 2% Developmentt tax from Matimo General fund 54,000 enterprises for cleaning services 11//11 26/11/2013 Health 2% Development tax from Kawaar Gen General fund 29,970 Ent for supply and installation of solar 14//11 26/11/2013 Health 2% Development tax from Gumare Gen Ent for supply and installation of solar General fund 19,600 4//1 09/01/2014 Health 7//1 21/01/2014 Health 4//2 13/02/2014 Health 2% Development tax from CAB Uganda ltd supply and installation of solar system refridgerators and Lopelipel HC 2% Development tax from supply and installation of solar lighting system to Kakingol HC 2% Development tax from Supply of tyres and tubes for UG 245M General fund 41,500 General fund 320,397 General fund 120,000 10

11 10//2 14/02/2014 Health 18//3 14/03/2014 Health 8//3 26/03/2014 Health 3//4 03/04/2014 Health 8//21 10/04/2014 Health 3//6 05/06/2014 Health 7//6 12/06/2014 Health 10//6 12/06/2014 Health 2% Development tax from supply and installation of Solar system at Kakingol HC II & payment cleaning and slashing services 2% Development tax from Kobebe for fencing Nadungati HC III 2% Development tax from Nomak ENt for construction of staff house at Nakiloro 2% Development tax from Bakati-Kati Ent for renovation of staff house at Kakingol HC II 2% Development tax from Nomak investiments for construction of staff house at Nakiloro 2% Development tax from Nakirot Gen Ent for the supply of tyres 2% Development tax from Bakai-Kati Ent for the renovation of staff house at Kakingol HC II 2% Development tax from Nomak Investiments for construction of staff house atnakiloro HC II TOTAL General fund 238,809 General fund 821,934 General fund 335,196 General fund 260,254 General fund 171,522 General fund 100,000 General fund 132,449 General fund 735,552 36,443,774 Appendix ii Dead and Absconded staff S/n Name ID Title Reason Month Monthly Total 1 Lokiru Sen.Educ Died-mar ,304 1,113,912 Michael ation Assist 2 Ejok Education Absconded ,508 4,571,112 Francis Assist.G2 Feb Akwilo Education Absconded ,508 3,265,080 Stella Assist.G2 Aug Chemutai Education Absconded ,508 3,265,080 Clare Assist.G2 Aug Chemutai Education Absconded ,508 3,918,096 Martha Assist.G2 Jun Chebet Education Absconded ,508 1,306,032 catherine Assist.G2 Feb Cherukut Education Absconded ,508 3,918,096 Michael Assist.G2 Jun-2013 Total 2,330,352 21,357,408 Appendix iii Moroto District local government staffing levels Moroto District Staffing Establishment CAO'S OFFICE Scale Approved Filled Gap Chief Administrative officer U1SE Personal Secretary U4L

12 Driver U8U ADMINISTRATION Deputy Chief Administrative Officer U1EU ACAO/SAS U3L Senior Records officer U3L Personnel Officer U4L Information Officer U4L Records Officer U4L Assistant Records Officer U5L Senior Office Supervisor U3L Stenographer Secretary U5L Pool stenographer U Parish Chief U7U Telephone Operator U8U Stores Assistant U7U Records Assistant U7U Office Attendant U8U Askari U8U FINANCE Chief Finance Officer U1E Senior Accountant U Accountant (Revenue) U Senior Finance Officer U Stenographer Secretary U Senior Accounts Assistant U Accounts Assistant U Stenographer Secretary U Office Attendant U8U Driver U8U EDUCATION District Education Officer U1E Principal Education Officer U Senior Inspector of Schools U3L Inspector of Schools U4L Sports Officer U4L Assistant Sports Officer U5L Pool Stenographer U Copy Typist U Office Attendant U8U Driver U8U PRODUCTION & MARKETING DEPARTMENT District Production & Marketing Officer U1E Senior Veterinary Officer U Veterinary Officer U

13 Senior Commercial Officer U Senior Agriculture Officer U Agricultural Officer U Assistant Agriculture Officer U Market Officer(Animal Husbandry) U Pool Stenographer U Office Attendant U8U Driver U8U WORKS AND TECHNICAL SERVICES District Engineer U1E Superintendent of Works U4U Water Officer U4U Assistant Engineering Officer U5U Assistant Engineering Officer (Water) U5U Road Inspector U Engineering Assistant U Borehole Maintenance Technician U8U Artisan/Electrician (Trade Tested) U8U Office Attendant U8U Plant Operator U8U Driver U8U COMMUNITY BASED SERVICES District Community Development Officer U1E Senior Probation and Welfare Officer U Community Development Officer U Assistant Probation and Welfare Officer U Assistant Community Development Officer U Pool Stenographer U Office Typist U Office Attendant U8U Driver U8U NATURAL RESOURCES DEPARTMENT District Natural Resource Officer U1E Senior Lands Officer U3L Senior Environment Officer U3L Environment Officer U Forestry Officer U Staff Surveyor U Land Valuer U Registrar of Titles U Cartographer U Pool Stenographer U Forest Ranger U7U Forest Guard U8U

14 Office Attendant U8U Driver U8U PLANNING UNIT District Planner U Senior Planner U Economist U Population Officer U Assistant Statistical Officer U Pool Stenographer U Office Attendant U8U Driver U8U INTERNAL AUDIT District Internal Auditor U Internal Auditor U Examiner of Accounts U5U Pool stenographer U Office Attendant U8U Driver U8U Total staffing Gap 41.9% 14