The Auditor General John Muwanga has faulted government for paying Shs1.4 billion to 1674 staff that are supposed to have retired. The money was paid as salaries and allowances in the month of June 2018, contrary to the Public Standing Orders.

“I noted that 1674 staff from the June 2018 payroll deemed to have reached the mandatory retirement age were still on the active payroll and were paid a total of Shs.1.4 billion during the month of June alone in form of salaries and allowances contrary to Public Standing Orders,” Muwanga said in his report to parliament for the financial year ended June 30, 2018.

No special skills for contract employees

He says the payroll of June 2018 revealed that pensioners in various ministries, departments and agencies were employed on contract terms but there was no evidence indicating that their job positions required special skills. Some of the positions in question include; drivers, plant operators, accountants, administrative assistants, askaris and special constables which positions can easily be filled from the existing job market.

Delays in solving queried files

“There were delays in solving queried files as 931 files were queried and stored at the Ministry of Public Service (MOPS) awaiting collection by the respective vote human resource officers for further action. “I noted that it takes on average between 6 to 12 months for vote Human Resource Officers to pick up the queried files for correction,” he says.

Double pay to pensioners possible

He says some pensioners were assigned multiple gratuity payments both on the payrolls and interface files. In the event that votes do not carry out a review to ascertain the accuracy of the interface files uploaded on the integrated financial management system (IFMS), the possibility of double payments cannot be ruled out.

Excess government expenditure

The official in his report says irregular employment of pensioners results into excess expenditure by government and denies the unemployed access to government jobs. “The system being used to manage the pension was unable to generate automatic notifications of the retirement due dates,” he says.

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The Auditor General John Muwanga in his latest report to parliament, says youth groups benefiting from the Youth Livelihood Programme (YLP) failed to comply with the repayment schedule, failing to pay back Shs1.3 billion out of the 1.6 billion disbursed to them through the Ministry of Gender, Labour and Social Development.

“It was observed that whereas the groups funded in 2013/2014 and 2014/2015 were expected to have repaid a total amount of Shs1.8 billion (Interest inclusive) by close of the financial year 2017/2018, only Shs0.44 billion (24.9 per cent) was collected leaving a balance of Shs.1.3 billion (75.1 percent),” Mr. Muwanga says in his report.

The findings above were established as Muwanga did an audit on Shs1.6bn disbursed to youth groups in 17 Municipal Councils in the Financial Years; 2013/2014 and 2014/2015, whose recovery period of three years had expired by June 30, 2018.

Mr. Muwanga’s audit included ascertaining the following; whether all funds budgeted for YLP during the period under review were actually released and used only for the program.

Whether all funds advanced to the youth groups were repaid in accordance with the agreed repayment schedule and to establish reasons for failure or delays to repay the funds.

Also audited was whether all funds recovered during the period under review were transferred to the revolving fund account in Bank of Uganda and whether on a sample basis the funded projects exist and are operating.

He says in a report that a physical inspection on two selected projects per Municipal Council to ascertain whether youth groups benefiting from YLP were in existence and executed in accordance with the operational guidelines, established that out of the 26 inspected projects, only 6 projects were in existence while 20 projects were non-existent.

He however, says that failure to repay in a timely manner implies that other eligible groups were unable to access the funds since this is a revolving fund.

According to the Accounting Officers, delayed repayment was mainly attributed to disintegration of groups and sharing of funds by members (45 per cent), embezzlement of funds by group members (23 per cent), failure of some projects especially agriculture projects due to bad weather patterns (10 per cent) and other reasons including lack of skills, Sensitization and insecurity (22 per cent).

Failure to transfer recovered funds to the recovery account in BoU.

According to the report, a review of the bank statements of YLP collection accounts revealed that out of the collected amount of Shs0.44 billion only Shs0.4 billion was transferred to the National Revolving Fund Collection Account by the end of the financial year 2017/18 leaving a balance of Shs0.079 billion. he says this undermines the effective implementation of the program.

The accounting officers attributed this to the slow recovery rates and failure to allocate some recoveries to individual groups. I advised the Accounting Officers to follow the programme guidelines in order to achieve the project objectives.

Underfunding of the Programme.

A review of the approved budget for the YLP program revealed that whereas the 17 Municipal Councils had budgeted for a total amount of Shs1.7 billion for the financial years 2013/2014 and 2014/2015 , only Shs1.6 billion was released resulting in a shortfall of Shs17,971,000, which he says undermined the intended objective of responding to the challenge of unemployment amongst the Youths.

He says in his report that accounting officers mainly attributed this to budget cuts by the Ministry of Gender which has the final say in this programme.

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The Auditor General John Muwanga in his latest report to parliament for the financial year ended June 30, 2018 reveals some gaps in government planning and budgeting which it says affect the timeliness, accuracy and usefulness of plans by government.

According to the report, the shortcomings include; sector delays to submit plans, lack of service delivery standards in all ministries, departments and agencies (MDAs) and local governments (LGs), delay in issuing of circular for the National Development Plan III (NDP III) by the National Planning Authority (NPA), failure by NPA to undertake mid-term review assessment of the NPD II, failure by 40 entities to submit strategic plans and failure by 54 percent of MDAs in attaining satisfactory score on Certificate of Compliance (CoC).

The report says: “As a result most sector plans and annual budgets are not aligned with the NDP and assessing service delivery and level of implementation of the NDP is difficult without service delivery standards and regular reviews.”

On revenue mobilisation, the report says out of Shs28.2 trillion government had set out to receive in form of domestic, development partner funding, treasury Instruments and Appropriation in Aid (AIA) only Shs26.6 trillion (94.3 per cent) was received leading to a shortfall of Shs1.6 trillion. “During the year, government budgeted to spend a total of Shs30.8 trillion, through MDAs, LGs, Referral Hospitals, Missions and embassies. Only Shs26.1 trillion was released representing a performance of 85 per cent. This affects implementation of planned activities,” it says.

Pension and Gratuity

By close of the financial year, MDAs and LGs had not paid out Shs65.6 billion in pension and gratuity arrears despite the fact that these funds had been released.

Funds were thus returned to the UCF. The implication is that either the pensioners are non-existent or MDAs/LGs are denying/delaying beneficiaries their benefits.

Management of Public Debt

The report notes that Uganda’s debt has increased by 22 per cent from Shs33.99 trillion as at June 30, 2017 to Shs41.51 trillion as June 30 2018. Although Uganda’s debt to GDP ratio of 41 per cent is still below the IMF risky threshold of 50 per cent and compares well with other East African countries, the report says.

However, the report says it is unfavourable when debt payment is compared to national revenue collected which is the highest in the region at 54 per cent. According to the report, 50 per cent of the loans sampled totalling Shs3.98 trillion will expire in 2020. “If government is to service the loans as projected in the next financial years (2018/2019 and 2019/2020), it would require more than 65 per cent of the total revenue collections which is over and above the historical sustainability levels of 40,” the report says.

Interest payments

According to the report, interest payments on both domestic and external loans during the year amounted to Shs2.34 trillion, which is 17 per cent of total revenue collections, above the limit set in Public Debt management Framework 2013 of 15 per cent. “This has been on the rise for the last four years,” it says.

The auditor General in the report adds that although the absorption of external debt has improved compared to last financial year, there were cases of low absorption. “I noted some loans with absorption levels as low as 10 below and below. An example is the USMID project with over Shs95 billion (95 per cent) still on the various accounts of Municipal Councils by close of year, despite various incomplete and abandoned works due to non-payment to Contractors. Another project, Mbarara-Nkenda and

Tororo-Lira transmission line has delayed for almost eight years resulting into cancellation of the loan by the funder with an undisbursed loan amount of US$ 6.5 million,” he said.

He notes that significant value loans have stringent conditions which could have adverse effects on Uganda’s ability to sustain its debt. These conditions, he says, include; waiver of sovereign immunity by government over all its properties and itself from enforcement of any form of judgement, adoption of foreign laws in any proceedings to enforce agreements, requiring government to pay all legal fees and insurance premiums on behalf of the creditor.

Youth Livelihood Program

The report notes that whereas Ministry of Gender, Labour and Social Development had budgeted for a total amount of Shs231.2 billion for the F/Y 2013/2014 to F/Y 2017/2018, only Shs161.1 billion (69.7 per cent) was released to the program resulting in a shortfall of Shs70.1 billion (30.3 per cent). As a result only 15,979 (67 per cent) of the proposed 23,850 projects were funded. This affected the number of youths who had been targeted by the program as it only benefited 195,644 out of 286,200 youths, (68 per cent) by June 30, 2018.

Low recovery of disbursed funds

According to the report, from a total amount of Shs38.8 billion that was disbursed to 5,505 youth groups in the financial years 2013/2014 and 2014/2015, on average, only 26.7 per cent was recovered from the youth countrywide. “There is high probability that the balance of almost Shs28.4 billion may never be recovered as almost 64 per cent of the sampled projects, consisting of 71 per cent value of loans, were non-existent. Another 25 per cent had reportedly embezzled or diverted the funds, the report says.

However, the report says that in the financial years 2015/16 to 2017/18, out of a total amount of Shs83.3 billion disbursed to 10,444 Youth Groups, there was a noted improvement of recoveries ranging from 24 per cent in 2015/16 to 60 per cent in 2017/18 which is still below satisfactory performance.

Out of the total amount of the Shs18.1 billion recovered from the youth groups at the time of audit, Shs16.1 billion (90 per cent) had been transferred to the Revolving Fund in Bank of Uganda, according to the guidelines. Besides, only Shs8 billion had been revolved to other Youth Groups. However, the reports says the delay in revolving funds to other eligible groups undermines the ultimate goal of the program.

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President Yoweri Museveni’s visit to Zimbabwe should compel relevant ministries of the two governments to schedule an inaugural session of the joint permanent commission to explore specific areas of cooperation, President Mnangagwa has said.

Speaking at a dinner hosted in honour of Museveni at State House in Harare last night, President Mnangagwa said Zimbabwe stands ready to escalate economic cooperation guided by the two countries’ General Agreement on Economic, Technical, Scientific and Cultural Cooperation, as well as the current realities of the two countries and the continent at large.

Mnangagwa said the visit was special as it gave both countries an opportunity to reignite the Pan African spirit engrained in the two nations.

“Since the establishment of our diplomatic relations in 1980, Zimbabwe and Uganda have enjoyed cordial relations at the political level. Your visit affords us an opportunity to share our socio-economic and political experiences, to improve the quality of life of our people,” he said.

“However, we must remain cognisant of the need to protect and defend our hard-won independence and economically empower our people, especially the youth and women.”

The President said his Government had embarked on economic and political reforms to improve the country’s economy.

“I am aware, Your Excellency, that you have been a constant advocate for Africa’s economic emancipation, industrialisation and value addition through the exploitation of the continents resource.”

Museveni said he was pleased to be in Zimbabwe.

“Whenever I come to Southern Africa, I am pleased because I see our people who come from the Great Lakes region and spread over Southern Africa. I see you as the Diaspora of the Great Lakes.

“The only problem is, you have forgotten some of the languages. When I asked (former president) Mugabe when he came to Uganda what his name meant, he said it was just a name, but I told him it means ‘to give’,” said Museveni drawing laughter from the guests.

He said this linguistic evidence shows the oneness of African people.

“‘Kuvona’ means to see, but now it means to find something that is missing. Therefore, when I hear people called reactionaries I feel pity for them because Africans are similar or linked. We are one. We have long standing relations with freedom fighters from Zimbabwe, Angola and South Africa. I attended the independence of Zimbabwe as a Minister,” he said.

Mnangagwa said both countries share common views on political and security issues affecting their regions and the continent.

“At continental level, Zimbabwe supports the decision taken by African Union to ensure financial independence, self-sufficiency and more responsive mechanisms to emerging security and political threats.”

Museveni said both countries must emphasise on economic cooperation to enable self sustanance.

“The market is a stimulant for production. The more we produce, the more prosperous we become.

“Yes some of our products are similar, but we have other products which are not similar. A joint commission must sit and identify the products we can share,” he said.

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