OFFICE OF THE AUDITOR GENERAL

Transcription

1 OFFICE OF THE AUDITOR GENERAL THE REPUBLIC OF UGANDA REPORT AND OPINION OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF NAKASONGOLA TOWN COUNCIL NAKASONGOLA DISTRICT FOR THE YEAR ENDED 30 TH JUNE, 2014

2 REPORT AND OPINION OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF NAKASONGOLA TOWN COUNCIL NAKASONGOLA DISTRICT FOR THE YEAR ENDED 30 TH JUNE, 2014 THE RT. HON. SPEAKER OF PARLIAMENT I have audited the accompanying financial statements of Nakasongola Town council for the year ended 30 th June, These financial statements comprise of 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 s Responsibility for the Financial Statements Under Article 164 of the constitution of the Republic of Uganda, 1995, and section 65 and 86 of the Local Government Act 1997, (as amended), the Accounting Officer is accountable to Parliament for the funds and resources of Nakasongola Town Council. The Accounting Officer is also responsible for the preparation of financial statements in accordance with the requirements of the Local Governments Financial and Accountability Manual, 2007, and for such internal control as management deems 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, Section 87 of the Local Governments 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 the audit in accordance with International Standards on Auditing (ISA)/International Standards of Supreme Audit Institutions (ISSAIs). 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 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 preparation of the entity of financial statements in order to 1

3 design audit procedures that are appropriate in the circumstances but not for purposes of expressing an opinion on the effectiveness of the internal control of the entity. 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 this 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 Nakasongola Town Council as at 30 th June 2014 are prepared in all material respects, in accordance with the Local Governments Financial and Accounting Manual, 2007, Section 31(6) of the Public Finance and Accountability Act 2003, the Local Governments Financial and Accounting Regulation, 2007 and the Local Governments Act cap 243 (as amended), of the Laws of Uganda. John F. S. Muwanga AUDITOR GENERAL 20 th February,

4 PART "B" NAKASONGOLA TOWN COUNCIL 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 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 the Nakasongola Town Council 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 Governments 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 and confirm whether all the Council funds were utilized with due attention to economy and efficiency and only for the purposes for which the funds were provided. c. To ascertain whether the 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 Council, assess control risk and identify reportable conditions, including material internal control weaknesses e. To verify and confirm whether management of the funds of the entity was in compliance with the Government of Uganda financial regulations. 3

5 f. To verify and confirm 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 payment 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, sound controls were applied throughout the period. d. Procurement Reviewed the procurement of goods and services under the entity 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. 4

6 4.0 ENTITY FINANCING Nakasongola Town Council is financed by grants (Conditional and Unconditional) from the Central Government; donations and locally generated revenues from taxes, fees, licenses and charges. During the year, the Town Council received grants totaling to UGX.356,094,399 from the Central Government; and UGX.114,225,510 from locally generated revenues. The total revenue of UGX.470,319,909 constituting 85% of its approved budget estimates of UGX.547,896, DETAILED AUDIT FINDINGS This section outlines the detailed audit findings, management responses thereof and my recommendations. 5.1 Lack of Land Titles Section 58(4) of the Local Governments Financial and Accounting Regulations, 2007 states that the properties and assets of a Local Government shall be properly registered, titles issued and valued. However, it was observed that Council did not have land titles for the following eight (8) pieces of land as shown below;- Untitled Town Council Land S/N UNTITLED LAND SIZE USAGE STATUS 1 Administration Block Not established NTC Head Office Under survey 2 Central Market Plot Not established Market Under survey 3 Taxi Park Not established Taxi Park Under survey 4 Kansyire Market Not established Market Not surveyed 5 Cemetery Land Not established Cemetery Not surveyed 6 LandFill Not established Garbage Dumping Not surveyed 7 Abattoir Land Not established Abattoir Not surveyed 8 Land opposite boma grounds Not established - Not surveyed In absence of land titles, the council land is at a risk of encroachment. The Accounting Officer explained that only three (3) pieces of land were being surveyed due to financial constraints. I advised the Accounting Officer to ensure that all council land is titled. 5

7 5.2 Lack of an updated Valuation list Section 4 of the Local Governments (Rating) Regulations, 2006 states that the Local authority shall cause to be made for every rating area within its limits, the first valuation list and thereafter, a valuation list, once at least in every five years or such longer period as the Minister may approve. It was however noted that property valuation in Nakasongola Town Council was last done in As a result, the property tax being estimated and collected may not be realistic. The Accounting Officer explained that the process of updating the valuation list had started with submissions to the procurement committee for a service provider. I advised the Accounting Officer to ensure that a valuation list is updated. 5.3 Debtors Section of the Local Governments Financial and Accounting Manual, 2007 states that money owed to Council represents an asset that is idle as it denies the Council opportunity of using the money to provide services promptly. Contrary to this provision, UGX.27,931,838 due from property tax accumulated over three years had not been collected as shown in Appendix 1. Non collection of arrears of revenue was attributed to laxity on the part of management or lack of sensitization of taxpayers. Management explained that the defaulters were taken to court to enforce recovery. I await the result of the court action. 5.4 Local Revenue Shortfall Section 32 of LGAFR, 2007 requires the Head of Finance to ensure that all revenues due to the Council are promptly assessed and collected as per the approved budget. It was however observed that the budgeted local revenue for the year was UGX 149,127,360 but at the end of the year, the Council had realized UGX.114,225,510 leading to a shortfall of UGX 34,901,850 representing 23%. Low revenue collections hamper service delivery as the planned activities are not financed and implemented. The shortfall was due to revenue defaulters and management explained that legal action was being taken against them. I wait the outcome. 6

8 5.5 Under Staffing The staff establishment of the Town Council has 48 positions. However, out of the total approved positions, only 28 were filled leaving a balance of 20 positions vacant which represents 39.6% of the establishment as shown in the table below;- Understaffing Department Approved Filled Vacant Administration Finance And Planning Works Production And Marketing Health Community Based services Internal Audit TOTAL Understaffing undermines service delivery. Management attributed the matter to Government ban on recruitment of staff by the Ministry of Public Service. I advised the Accounting Officer to continue liaising with the relevant authorities to ensure that the vacant posts are filled. 7

9 APPENDICES Appendix 1: Debtors TAX PAYER AMOUNT DUE Namata Basigala Teopista- Commercial 156,870 Kefa Serubombwe- Commercial 127,680 Mulokole Betty- Commercial 67,740 Namirembe Joyce- Commercial - Wandaga Andrew- Commercial 107,730 Kitaka Mupiina- Commercial 145,070 Nakizito Kate- Commercial 14,390 Kiseka Godfrey- Commercial 108,240 Ruchuma Kamugisha Fred- Commercial 17,770 Nabasa Harriet- Commercial 187,600 Namugerwa Scovia- Commercial 48,700 Ssentongo Gerison- Commercial - Kyambadde Fred- Commercial 1,860 Sempebwa- Commercial 150,390 Nkoyoyo Christopher 139,590 Nkoyoyo Christopher- Offices 241,520 Kayise Christome- Commercial 103,530 Mukambi Amos 140,400 Aupal Jean Sammy- Commercial 203,420 Kayise Chrizestome- Commercial 124,020 Wasswa Kimeze Edward 103,140 Kizza Gaster- Commercial 291,600 Kavumba Ronald- Petrol Station 2,160,000 Maka Francis- Commercial 54,190 Wamala Stephen- Guest House - Bogere- Commercial 182,370 Olwenyi Peter- Commercial 283,238 Ssebyala Moses- Commercial 32,700 Wandira James- Commercial 375,570 Wasswa Robert- Commercial 320,040 Kirabo Joseph- Commercial 59,000 Bagonza Christopher- Commercial 73,120 Ssemwanga Livingstone- Commercial 33,660 Mbangire Fredrick- Offices 822,970 Kimeze Fred- Commercial 187,430 Etigu Nicholas- Commercial 57,350 Etigu Nicholas- Commercial 42,300 Kizza Gaster- Commercial 332,100 Modern S.S- School 522,300 Nansubuga Florence- Commercial 365,250 Ssentongo Godfrey- Guest House 368,830 8

10 Late Kitagenda Grace- Commercial 29,330 Late Lubega Abbey- Guest House 553,200 Late Lubega Abbey- Commercial 297,340 Namande Eseza 48,870 Lubega Samali- Commercial 147,488 Najja Winnifred- Commercial 181,840 Nakato Serina- Commercial - Nakatudde Margret- Commercial 670,140 Batubya Charles- Commercial 173,000 Kolinako Noah- Commercial 35,370 Ssentongo Geresem- Commercial 310,500 Naiga Margret- Commercial 116,000 Nanyombi Ruth- Commercial - Kalule Godfrey- Offices 98,260 Nduga Robert- Commercial 127,170 Wamal Stephen- Commercial 295,650 Wamal Stephen- Commercial 133,110 Aupal Jean Sammy- Commercial 236,900 Senkula Christopher- Commercial 58,530 Kalule Kigundu- Commercial 181,950 Semanda Yafes- Commercial 206,310 Katali Mohammed- Commercial 102,160 Maiteki Eryasaf- Commercial 56,760 District R. Centre- CAO Offices 607,500 Njovu c/o Ssezzobwa- Commercial 229,130 Njovu c/o Ssezzobwa 31,590 Kyazze George William- Commercial 170,320 Junju Daisy- Commercial 22,640 Tubomwe Henry- Commercial - Kaweesa Godfrey- Commercial 36,450 Kaweesa Moses- Commercial 236,160 Kajura Zion- Guets House 192,000 Muganda- Commercial 36,960 Save the Children Offices 880,000 Bagonza Christopher- Commercial 124,500 Byansi Petrol Station 2,191,000 Kyosimba Eriyasafu- Commercial 18,680 Kanyike Fred- Commercial - Maiteki Eryasaf- Commercial - Sezooba Fred 113,890 Ugaply Industries - Munya Peter- Commercial - Kaweesi God- Commercial 82,800 Wamala Stephen- Commercial - Babirye Dorothy- Commercial 1,400 9

11 Bawanuka Kesi- Commercial 75,750 Nanyonga Winfred- Commercial 97,970 Mwanje Edward- Commercial - Nakasongola Growers- Stores 50,000 Mulangira E Kiryabandi- Commercial 212,120 Wandera Steven- Commercial 27,540 Late Kaddu Yuda- Commercial 101,040 Kaweeru- Commercial - Biragiro Fred - Nampa Christine- Commercial - Late Mupiina Kirya Henry - Kimeze Livingstone- Commercial 58,800 Setimba Steven- Commercial 18,480 Sekyanzi Henry- Commercial 388,800 Bisaso Ali- Commercial - Namugabi Sarah- Commercial - Buyinza Simon- Lodge 80,800 Gawune Charles- Commercial 19,140 Baboineki Johnson- Commercial - Sebizzi George W- Commercial 51,840 Bisabo Ali- Commercial 298,080 Mutegyeki Bernard- Commercial 24,300 Bukenya Ronald - Bukenya Ronald 36,020 Katongole Godfrey- Commercial 106,560 Kayiwa Moses- Comemrcial 213,360 Nalukwago Faith- Commercial 15,980 Late Muyomba Peter- Commercial 34,690 Muyigira David 23,000 Mbaziira Stanley- Commercial 54,240 TOTAL 27,931,838 10