REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE UGANDA EMBASSY, RIYADH FOR THE FINANCIAL YEAR ENDED 30 TH JUNE, 2015

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1 THE REPUBLIC OF UGANDA REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE UGANDA EMBASSY, RIYADH FOR THE FINANCIAL YEAR ENDED 30 TH JUNE, 2015 OFFICE OF THE AUDITOR GENERAL UGANDA

2 TABLE OF CONTENTS LIST OF ACRONYMS... iii REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF... iv DETAILED REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE EMBASSY OF UGANDA IN RIYAD FOR THE YEAR ENDED 30 TH JUNE, INTRODUCTION BACKGROUND INFORMATION OBJECTIVES OF THE MISSION AUDIT PROCEDURES PERFORMED Categorization of audit findings... 3 ii

3 LIST OF ACRONYMS MOFA Ministry of Foreign Affairs PFAA Public Finance and Accountability Act, 2003 PFMA Public Finance Management Act, 2015 PFMA Public Finance Management Act, 2015 PPDA Public Procurement and Disposal of Assets Act, 2003 SAR Saudi Arabian Riyal UGX Uganda shillings iii

4 REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE UGANDA EMBASSY IN RIYADH FOR THE YEAR ENDED 30 TH JUNE, 2015 THE RT. HON. SPEAKER OF PARLIAMENT I have audited the financial statements of Uganda Embassy in Riyadh for the year ended 30 th June These financial statements comprise of the Statement of Financial Position, the Statement of Financial Performance, and Cash flow Statement together with other accompanying statements, notes and accounting policies. Management Responsibility Under Article 164 of the Constitution of the Republic of Uganda (as amended) and Section 45 of the Public Finance Management Act, 2015, the Accounting Officer is accountable to Parliament for the funds and resources of Uganda Embassy in Riyadh. The Accounting Officer is also responsible for the preparation of financial statements in accordance with the requirements of the Public Finance Management Act 2015, and the Financial Reporting Guide, 2008, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement 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) and Sections 13 and 19 of the National Audit Act, 2008 is to audit and express an opinion on these statements based on my audit. I conducted the audit in accordance with International Standards on Auditing. Those standards require that I comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. 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 risks of material misstatement of financial statements whether due to fraud or error. In making those risk assessments, the Auditor considers internal control 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 purposes 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 iv

5 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 opinion. Part A of this 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 and form part of my Annual Report to Parliament. PART A Opinion In my opinion, the financial statements of the Embassy of Uganda in Riyadh for the financial year ended 30 th June, 2015 are prepared, in all material respects in accordance with Section 51(1) of the Public Finance Management Act, 2015 and the Financial Reporting Guide, John F.S. Muwanga AUDITOR GENERAL 15 th December, 2015 v

6 PART "B" DETAILED REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE EMBASSY OF UGANDA IN RIYADH FOR THE YEAR ENDED 30 TH JUNE, 2015 This Section outlines the detailed audit findings, management responses, and my recommendations 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 Embassy of Uganda in Riyadh to enable me report to Parliament. 2.0 BACKGROUND INFORMATION The Uganda Embassy in Riyadh is located on No. 11, Hassan Bin Al-Numaan street, Al Woroud Area, West Salahuddein Hotel, South Alhariri Palace, Riyadh, Kingdom of Saudi Arabia. The Embassy is also accredited to Oman, Bahrain, Jordan, Qatar and Yemen. 3.0 OBJECTIVES OF THE MISSION The main objectives of the Embassy are: To promote peace and security between Uganda and Organization of Islamic Council [OIC] member states. To promote Uganda exports, investments opportunities, education facilities and tourism/ cultural attraction. To mobilize bilateral and multilateral resources for the development of Uganda. To provide diplomatic and consular services to countries accredited. To mobilize and empower Ugandans in the Gulf region. To empower the Mission to implement its charter. 4.0 FINANCING OF THE MISSION The Mission was financed by grants from Central Government amounting to UGX.1,393,110,014. Non tax revenue amounting to UGX.41,265,064 was also collected bringing to total revenue to UGX.1,434,375,078. The total revenue

7 constituted 99.2% of the mission s approved budget estimates of UGX.1,445,665, 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. In conducting my reviews, special attention was paid to establish:- a. Whether 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. b. Whether all funds were utilized with due attention to economy and efficiency and only for the purposes for which the funds were provided. c. Whether goods and services financed have been procured in accordance with the Government of Uganda Procurement regulations. d. Whether the Mission had a sufficient internal control structure and the internal controls were working as intended throughout the year. e. Whether the Mission management was in compliance with the Government of Uganda financial regulations. f. 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. 6.0 AUDIT PROCEDURES PERFORMED The following audit procedures were undertaken:- (a) Revenue Obtained schedules of all revenues collected and reconciled the amounts to the cashbooks and bank statements. (b) Expenditure The payment vouchers 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 sound controls were applied throughout the period audited. 2

8 (d) Procurement Reviewed the procurement of goods and services by the Ministry during the period under review and reconciled with the approved procurement plan. (e) Fixed Asset Management Reviewed the use and management of the Mission s assets during the period under audit. (f) Embassy 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 Categorization of audit findings The following system of profiling audit findings has been adopted to better prioritise the implementation of audit recommendations. No. 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 Summary of audit findings S/N Observation Significance 1 Failure to Translate Documents High 2 Failure to submit Quarterly Procurement Reports to PPDA Moderate 8.0 DETAILED FINDINGS 8.1 Failure to Translate Documents Section (P-b) (7) of the Public Service Standing Orders states that, "If an officer receives documents written in a language other than English, and it is necessary to 3

9 refer such documents to other departments or officers, he or she should arrange for the documents to be translated by a designated translator or professional and for such translations to be available to other interested departments or officers." Contrary to the above requirement, a review of the mission's expenditure vouchers in the sum of UGX.2,068,713 representing 0.15% of total expenditure for the year, revealed that the supporting documents written in Arabic were not translated into English which is the official language of the reporting country rendering verification difficult. Management explained that the anomaly was an oversight. I advised the Accounting officer to always ensure that all supporting documents are translated into English before onward submission to the relevant entities in Uganda. 8.2 Failure to submit Quarterly Procurement Reports to PPDA PPDA Guidelines 3 (3.1), 2008 for procurements and disposals by missions abroad states that, "The entities shall submit quarterly reports on procurement and disposals to the Authority by the 15th day of each month for the previous month using PP Form 200 for macro procurements, PP Form 202 on the micro procurements and DPA Form 201 on disposals." It was however noted that the Mission did not prepare nor submit the quarterly procurement reports to the Authority as required. This implies that the mission procurement activities for the year were not reported on yet this information is critical to PPDA in its planning to carry out periodic procurement audits/ inspections. Management explained that it has complied with the PPDA Act effective 2015/16 with a guidance of MOFA procurement unit. I have advised the Accounting Officer to ensure that the quarterly procurement reports are prepared and submitted to PPDA as required. 4

10 FINANCIAL STATEMENTS 5

THE REPUBLIC OF UGANDA REPORT OF THE AUDITOR GENERAL

THE REPUBLIC OF UGANDA REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE UGANDA EMBASSY IN MOGADISHU FOR THE FINANCIAL YEAR ENDED 30TH JUNE 2015 OFFICE OF THE AUDITOR GENERAL UGANDA TABLE