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Office of the Auditor General the Republic of Uganda Report of the Auditor General on the Financial Statements of Napak District

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Office of the Auditor General the Republic of Uganda Report of the Auditor General on the Financial Statements of Napak District OFFICE OF THE AUDITOR GENERAL THE REPUBLIC OF UGANDA REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF NAPAK DISTRICT LOCAL GOVERNMENT FOR THE YEAR ENDED 30TH JUNE 2018 OFFICE OF THE AUDITOR GENERAL UGANDA TABLE OF CONTENT Opinion ........................................................................................................................ 1 Basis for Opinion ........................................................................................................... 1 Key Audit Matters.......................................................................................................... 2 1.0 Performance of Youth Livelihood Programme ............................................... 2 1.1 Under funding of the Programme ................................................................... 3 1.2 Non-compliance with the repayment schedule .............................................. 3 1.3 Failure to transfer Recovered Funds to revolving fund Account in BoU ....... 3 1.4 Inspection of the performance of Youth Projects. ......................................... 4 1.4.1 Iriir T/C Youth Motor cycle Repair & sale of spare parts project ............... 4 1.4.2 Let's Teach The Nation Youth MDD Group .................................................. 4 2.0 Implementation of the Uganda road Funds ................................................... 5 2.1 Status of implementation ............................................................................... 6 2.1.1 Routine manual maintenance ............................................................................ 6 2.1.2 Routine mechanized maintenance .................................................................... 6 2.1.3 Periodic maintenance ....................................................................................... 6 2.1.4 Monitoring and supervision ............................................................................... 6 Emphasis of matter ....................................................................................................... 6 3.0 Unrealised Budget on grants .......................................................................... 6 4.0 Accumulation of Domestic Arrears ................................................................. 7 5.0 Under collection of Local Revenue ................................................................. 7 Other Matters ............................................................................................................... 7 6.0 Stalled Construction of Council chambers ...................................................... 7 Other Information ..................................................................................................... 9 Management Responsibilities for the Financial Statements ................................................ 9 Auditor General’s Responsibilities for the audit of the Financial Statements ........................ 9 Other Reporting Responsibilities .................................................................................... 11 REPORT ON THE AUDIT OF COMPLIANCE WITH LEGISLATION ....................................... 11 7.0 Lack of land titles ........................................................................................... 11 8.0 Under Staffing ................................................................................................ 12 9.0 Failure to meet the Minimum Standards in UPE Schools .............................. 12 10.0 Natural Resources ....................................................................................... 13 ii 10.1 Lack of a District Environment Committee ................................................ 13 10.2 Lack of Register for Land, Wetlands and Forests ...................................... 13 10.3 Unlicensed activities on the Natural Resources ......................................... 14 APPENDICES ............................................................................................................... 15 iii LIST OF ACRONYMS CAO Chief Administrative Officer DEO District Education Officer DLG District Local Government EMHS Essential Medicines and Health Supplies FY Financial Year GOU Government of Uganda HC Health Centre IFMS Integrated Financial Management System IPFs Indicative Planning Figures ISSAI International Standards of Supreme Audit Institution KMs Kilometres LGFAM Local Government Financial and Accounting Manual 2007 LGFAR Local Government Financial and Accounting Regulations 2007 LGMSD Local Government Management and Service Delivery MMHS Management of Medicines and Health Supplies MoFPED Ministry of Finance Planning and Economic Development MoH Ministry of Health NFA National Forestry Association NMS National Medical Stores P/S Primary School PFMA Public Finance Management Act 2015 PPDA Public Procurement and Disposal of Assets T/C Trading Centre UGX Uganda Shillings URF Uganda Road Fund UWEP Uganda Women Enterprise Project YLP Youth Livelihood Programme iv REPORT OF THE AUDITOR GENERAL ON THE AUDIT OF FINANCIAL STATEMENTS OF NAPAK DISTRICT LOCAL GOVERNMENT FOR THE YEAR ENDED 30TH JUNE, 2018 THE RT. HON. SPEAKER OF PARLIAMENT Opinion I have audited the financial statements of Napak District Local Government which comprise the statement of Financial Position as at 30th June 2018, and the Statement of Financial Performance, Statement of Changes in Equity and Statement of Cash Flows together with other accompanying statements for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In my opinion, the financial statements of Napak District Local Government for the year ended 30th June 2018 are prepared, in all material respects, in accordance with section 51 of the Public Finance Management, 2015 and the Local Government Financial and Accounting Manual, 2007. Basis for Opinion I conducted my audit in accordance with International Standards of Supreme Audit Institutions (ISSAIs). My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Napak District in accordance with the Constitution of the Republic of Uganda (1995) as amended, the National Audit Act, 2008, the International Organization of Supreme Audit Institutions (INTOSAI) Code of Ethics, the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B) (IESBA Code), and other independence requirements applicable to performing audits of Financial Statements in Uganda. I have fulfilled my other ethical responsibilities in accordance with the IESBA Code, and in accordance with other ethical requirements applicable to performing audits in Uganda. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. 1 Key Audit Matters Key audit matters are those matters that, in my professional judgment, were of most significance in my audit of the financial statements of the current period. These matters were addressed in the context of my audit of the financial statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters. I have determined the matters described below as the key audit matters to be communicated in my report. 1.0 Performance of Youth Livelihood Programme The Youth Livelihood Programme (YLP) is a Government Programme being implemented under the Ministry of Gender, Labour and Social Development (MoGLSD) through the Local Government Administrations. The programme, which started in the financial year 2013-2014, was to respond to the existing challenge of unemployment among the Youth. The programme is implemented through the District and support to the vulnerable youth in form of revolving funds for skills development projects and income generating activities. The audit focused on an amount of UGX. 413,675,826 disbursed to the District in the Financial Year 2014/2015 whose recovery period of three years had expired by 30th June, 2018. There was no funding for 2013/2014. The audit procedures performed 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. Whether all funds recovered during the period under review was transferred to the revolving fund account in Bank of Uganda. Whether on a sample basis the funded projects exist and are operating. I made the following observations; 2 1.1 Under funding of the Programme A review of the approved budget for the YLP program revealed that whereas the District had budgeted for a total amount of UGX.450,000,000 for the FY 2014/2015, only UGX.413,675,826 (91.9%) was released resulting in a shortfall of UGX.36,324,174 (8%). The funds were disbursed for the Youth groups. Inadequate funding of the program undermined the intended objective of responding to the challenge of unemployment among the Youths. The Accounting Officer acknowledged the shortcoming and promised to engage the Ministry of Gender, Labour and Social Development for additional resources. The outcome is awaited. 1.2 Non-compliance with the repayment schedule It was observed that whereas the groups funded in 2014/2015 were expected to have repaid a total amount of UGX.413,675,826 (Interest
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