REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE NATIONAL COUNCIL FOR DISABILITY FOR THE FINANCIAL YEAR ENDED 30 TH JUNE 2015

Transcription

1 THE REPUBLIC OF UGANDA REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE NATIONAL COUNCIL FOR DISABILITY FOR THE FINANCIAL YEAR ENDED 30 TH JUNE 2015 OFFICE OF THE AUDITOR GENERAL UGANDA

2 TABLE OF CONTENTS PAGE LIST OF ACRONYMS... iii REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE NATIONAL COUNCIL FOR DISABILITY FOR THE FINANCIAL YEAR ENDED 30TH JUNE DETAILED REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE NATIONAL COUNCIL FOR DISABILITY FOR THE FINANCIAL YEAR ENDED 30 TH JUNE INTRODUCTION BACKGROUND INFORMATION FINANCING OF THE COUNCIL OBJECTIVES OF THE COUNCIL AUDIT OBJECTIVES PROCEDURES PERFORMED FINDINGS... 6 ii

3 LIST OF ACRONYMS Acronym GOU IFRS NCD NDP PFMA PWD SDSIP UGX Government of Uganda International Financial Reporting Standards National Council for Disability National Development Plan Public Finance and Accountability Regulations People With Disability. Social Development Sector Investment Plan Uganda Shillings iii

4 REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE NATIONAL COUNCIL FOR DISABILITY FOR THE FINANCIAL YEAR ENDED 30TH JUNE 2015 THE RT. HON. SPEAKER OF PARLIAMENT I have audited the accompanying financial statements of the National Council for Disability (NCD) for the year ended 30 th June These financial statements comprise of the Balance Sheet as at 30 th June, 2015, Income and Expenditure Statement, Statement of Changes in Equity, Cash Flow Statement together with other accompanying statements, notes and accounting policies. Management Responsibility for the Financial Statements Under Section 14 of the the National Council for Disability Act, 2003, the Accounting Officer is accountable to the Council for the funds and resources of the Council. The Accounting Officer is responsible for the preparation of financial statements in accordance with the requirements of the International Financial Reporting Standards (IFRS), and for such internal controls as management determines are 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, 1995 (as amended), Sections 13 and 19 of the National Audit Act, 2008 and Section 30 of the National Council for Disability Act, 2003 is to express an opinion on the financial statements based on my audit. I conducted my audit in accordance with the International Standards on Auditing (ISA). These standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing audit procedures to obtain audit 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 1

5 assessment of risks of material misstatement on 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 and fair presentation of 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 controls. 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 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" Opinion In my opinion, the financial statements of the National Council for Disability for the year ended 30 th June 2015 present fairly, in all material respects, the financial position of the National Council for Disability as of 30 th June, 2015, and the results of its operations and its cash flows for the year the ended in accordance with Section 29(2) the National Council for Disability Act, 2003 and the International Financial Reporting Standards. John F. S. Muwanga AUDITOR GENERAL 18 th December,

6 PART B DETAILED REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE NATIONAL COUNCIL FOR DISABILITY FOR THE FINANCIAL YEAR ENDED 30 TH JUNE 2015 This section outlines in detail the audit scope, audit findings, my recommendations and management responses in respect thereof. 1.0 INTRODUCTION Article 163 (3) of the Constitution of the Republic of Uganda, 1995 (as amended) requires me to audit and report on the public accounts of Uganda and all public offices including the courts, the central and 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 Council to enable me report to Parliament. 2.0 BACKGROUND INFORMATION The National Council for Disability (NCD) is a public institution established by an act of Parliament (The National Council For Disability Act 2003) for the promotion of the rights of persons with disabilities set out in international conventions and legal instruments, the Constitution and other laws, and for other connected matters. It was inaugurated on 16th August 2004 and mandated to monitor and evaluate Government and Non- Governmental organizations to ensure that policies and programs designed are offering quality service and promoting full participation of persons with disabilities. Its establishment was jointly initiated by Government and the Disability fraternity in Uganda as a means of Monitoring and setting standards for Disability-related interventions in the country. The work of the NCD is conducted within the context of the international and national legal instruments on human/disability rights, as well as the country s Social Development Sector Investment Plan (SDSIP) that complements on going Government Poverty reduction initiatives elaborated in the National Development Plan (NDP). The Vision of the Council is to ensure that the Uganda is a society where disabled persons are active participants in the development process while its Mission is to promote equalization of opportunities and realization of rights of persons with disabilities 3

7 (PWDs) through rights advocacy, policy influence, research, disability coordination and networking, and establishment of monitoring and evaluation mechanisms. It operates from rented premises located on Plot 1422 Buye Road Ntinda Kampala. 3.0 FINANCING OF THE COUNCIL The National Council for Disability was financed by Grants from Central Government (UGX.493,000,000), Donors (UGX.3,435,000) and interest (UGX.676,759). The total grants from Central Government of UGX,493,000,000 constituted 59% of the approved budget estimates of UGX.836,000,000 from this source. 4.0 OBJECTIVES OF THE COUNCIL Under Section 5 of the National Council for Disability Act, 2003, the objectives of the Council are: To promote the implementation and equalisation of opportunities for persons with disabilities. To monitor and evaluate the impact of policies and programmes designed for equality and full participation of persons with disabilities. To advocate for and promote effective service delivery and collaboration between service providers and persons with disability. To advocate for the enactment of laws and the reviewing of existing laws with a view to complying with the equalisation of opportunities as stipulated in the United Nations Standard Rules on the Equalisation of Opportunities for persons with disabilities, the Constitution and other laws and international legal instruments. 5.0 AUDIT OBJECTIVES The audit was carried out in accordance with the International Standards on Auditing and accordingly included a review of the accounting records, agreed procedures as was considered necessary. In conducting my reviews, special attention was paid to establish whether: a. The financial statements have been prepared in accordance with consistently applied Accounting Policies and fairly present the revenues and expenditures for the period and of the financial position as at the end of the period. 4

8 b. All Council funds were utilized with due attention to economy and efficiency and only for the purposes for which the funds were provided. c. Goods and services that were financed have been procured in accordance with the Government of Uganda procurement regulations. d. Whether the Council had a sufficient internal control structure and the internal controls were working as intended throughout the year. e. The Council s management was in compliance with the Government of Uganda financial regulations. f. All necessary supporting documents, records and accounts have been kept in respect of all Council activities, and are in agreement with the financial statements presented. 6.0 PROCEDURES PERFORMED The following audit procedures were undertaken: a. Revenue Obtained schedules of all revenues collected and reconciled the amounts to the Council s cashbooks and bank statements. b. Expenditure The Council payment vouchers were examined for proper authorization, eligibility and budgetary provision, accountability and supporting documentation. c. Internal Control System Reviewed the internal control system and its operations to establish whether sound controls were applied throughout the period audited. d. Procurement Reviewed the procurement of goods and services under the Council during the period under review and reconciled with the approved procurement plan. e. Fixed Assets Management Reviewed the use and management of the Council assets during the period audited. 5

9 f. Council s 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. 7.0 FINDINGS 7.1 Categorization of audit findings The following system of grading of the audit findings has been adopted to better prioritise the implementation of audit recommendations. In the OAG, risks are classified as follows: CATEGORY DESCRIPTION 1 High significance Has a significant / material impact, has a high likelihood of reoccurrence, and in the opinion of the Auditor General, it requires urgent remedial action. It is a matter of high risk or high stakeholder interest. 2 Moderate significance Has a moderate impact, has a likelihood of reoccurrence, and in the opinion of the Auditor General, it requires remedial action. It is a matter of medium risk or moderate stakeholder interest. 3 Low significance Has a low impact, has a remote likelihood of reoccurrence, and in the opinion of the Auditor General, may not require much attention, though its remediation may add value to the entity. It is a matter of low risk or low stakeholder interest. 6

10 7.2 Summary of audit findings The following table shows the summary of audit findings. NO. TITLE OF FINDING Significance 1 Irregular expenditure on monthly honoraria Moderate 2 Lack of segregation of duties in the Accounts department 3 Follow up of outstanding findings in the previous report Moderate Moderate 7.3 Irregular expenditure on monthly honoraria Section 10 of The National Council for Disability Act, 2003 provides that a member of the Council, and any person co-opted to any meeting of the Council, may be paid such remuneration or allowances and at such rate as the Minister may determine after consultation with the Minister responsible for finance. The review of the Minutes of the 3 rd Council Meeting held on 4 th October, 2013 at the Council Offices in Ntinda revealed that the Council under Resolution 160 passed the payment of a monthly Honorarium of UGX.500,000, UGX.300,000 and UGX.200,000 to the Chairperson, Vice Chairperson and Chairpersons of the three Committees respectively to facilitate them for mobilization, monitoring and political engagements in voicing out concerns of PWDs. However, this resolution was implemented before it was approved by the Minister as required by the above section of the Act making the expenditure of UGX.16,800,000 irregular. The Accounting Officer attributed the implementation of the resolution to the need for facilitation of mobilization of PWDs, monitoring and political engagements on issues of persons with disabilities with a view to advocating for the equalization of opportunities and addressing of imbalances. She also indicated that the Minister s approval would be sought to regularize the payment. I await management action in this regard. 7.4 Lack of segregation of duties in the Accounts department The Council organization structure shows that the Accounts department is supposed to be staffed with the Head of Finance and Administration, Accountant, Accounts Assistant and an Administrative Assistant. However, audit revealed that the department is run by 7

11 only the Head of Finance and Administration. The initiation of payments, approval of payments, payment, accountability of some payments and reconciliation of payments is done by one person contrary to sound financial management. I explained to management that carrying out of all the departmental work by one person may result into omissions and commissions occuring without detection. Management attributed the situation to lack of funds to cater for salaries for the relevant Accounts Department staff and indicated it was continuing to seek additional finding from the Ministry responsible for finance. I await results of management s efforts. 7.5 Follow up of outstanding matters in the previous report The observations from the follow up of findings that remained outstanding in the previous year s Auditor General s report are as contained in the following table. No. Issue Remarks 1 Improper repair of Motor vehicle UGX.10,440,000 was incurred on repair of motor vehicle Registration number UG 0373Y without pre and post inspection assessment and cost estimate. Not repeated 2 Inadequate Treasury Releases to NCD Out of the approved budget of UGX.836,000,000 only UGX.430,000,000 was realised resulting into a shortfall of UGX.406,000,000 (48%) and this hampered planned activities such as; voter education for People With Disability (PWD), development of disability laws, monitoring of prodisability service delivery in the districts, training district councils on their roles and other relevant skills, procurement of a new vehicle for the Council and filling the vacant posts. It was further revealed that the Council s financial requirements for the year amounted to UGX.4,000,000,000 implying that unfunded priorities constituted UGX.3,570,000,000. The meagre funding for the Council implies that activities regarding disabled persons have not been given the attention they derserve. Not Addressed. Out of the approved budget of UGX.836,000,000 from Government only UGX.493,000,000 was realised resulting into a shortfall of UGX.343,000,000 (41%) and this hampered the implementation of all planned activities. 8

12 3 Under Staffing Out of the staff establishment of 12 Officers, only 8 positions were filled leaving 4 vacant. Among the vacant positions is Programme Officer, Monitoring and Evaluation and Programme Officer, Legal and Human Rights. As a result, the Council s ability to monitor activities and enforce legal rights of the disabled persons may be contrained. Not Addressed. This was attributed to lack of budgetary provision by the Ministry of Finance. I advised Management to liaise with responsible authorities to address all the recommendations because they are intended to enhance efficiency of operations, accuracy of financial reporting and compliance with the applicable legislation. 9

13 FINANCIAL STATEMENTS 10