Office of the Auditor General the Republic of Uganda Report of the Auditor General on the Financial Statements of Kibuku Distri

OFFICE OF THE AUDITOR GENERAL

THE REPUBLIC OF UGANDA

REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF KIBUKU DISTRICT LOCAL GOVERNMENT FOR THE YEAR ENDED 30TH JUNE 2018

OFFICE OF THE AUDITOR GENERAL UGANDA

Table of Contents Opinion ...... 1 Key Audit Matters ...... 2 1.0 Performance of Youth Livelihood Programme ...... 2 1.1 Funding of the Programme ...... 2 1.2 Non-compliance with the Repayment Schedule ...... 3 1.3 Transfer of recovered funds to the recovery account in BOU...... 3 1.4 Inspection of Performance of Youth projects ...... 3 a) Nabiswa Youth Unisex Hair Dressing Project ...... 3 b) Kadama Township Bakery ...... 3 2.0 Implementation of the Uganda Road Fund ...... 4 Status of implementation ...... 5 a) Routine manual maintenance ...... 5 i) Kadama-molokochomo-kaderuna road ...... 6 b) Routine mechanized maintenance ...... 6 i) Kabweri swamp, kadama- kabweri- kakutu road ...... 6 c) Periodic maintenance ...... 7 Emphasis of matter ...... 7 3.0 Pension arrears ...... 8 Other Matter ...... 8 4.0 Double transfer of UWEP funds ...... 8 5.0 Staffing ...... 8 5.1 Staffing Gaps ...... 8 5.2 Irregular Payment of Salaries to Retired Staff ...... 9 Other Information ...... 9 Management Responsibilities for the Financial Statements ...... 10 Auditor General’s Responsibilities for the audit of the Financial Statements ...... 10 Other Reporting Responsibilities ...... 12 REPORT ON THE AUDIT OF COMPLIANCE WITH LEGISLATION ...... 12 6.0 Natural Resources ...... 12 6.1 Lack of Certificate of Ownership of Wetlands ...... 12 6.2 Unlicensed Activities in Wet Lands ...... 13 6.3 Mismanagement of the District’s Natural Resources ...... 13 7.0 Asset Management ...... 14

7.1 Lack of Land Titles ...... 14 8.0 STATUS OF BASIC MEDICAL EQUIPMENT...... 14 8.1 Poor condition of medical equipment ...... 14 8.2 Lack of skilled personnel to manage medical equipment ...... 15 8.3 Non-disposal of obsolete equipment ...... 15 9.0 Procurements and Works ...... 16 9.1 Slitting, drilling and installation of bore holes- ...... 16 10.0 Capitation Grant ...... 17 10.1 Failure to meet minimum required Standards of UPE Schools ...... 17 11.0 Governance and Oversight ...... 17 11.1 Evaluation of Internal Audit function...... 17 Appendices ...... 18 Appendix 1: The YLP Repayment Schedule ...... 18 Appendix 2: Irregular Payment of Salaries to Retired Staff ...... 21 Appendix 3: Status of basic medical equipment ...... 22

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LIST OF ACRONYMS

GOU Government of Uganda IESBA International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants INTOSAI International Organization of Supreme Audit Institutions ISSA International Standards on Auditing MoGLSD Ministry of Gender, Labour and Social Development YLP Youth Livelihood Programme YIG Youth Interest Group PFMA Public Finance Management Act, 2015 TAI Treasury Accounting Instructions UGX Uganda Shillings LGFAR Local Government Financial and Accounting regulations F/Y Financial Year NEA National Environment Act NAA National Audit Act UWEP Uganda Women Entrepreneurship Programme ULA Uganda Land Act LGA Local Governments Act

REPORT OF THE AUDITOR GENERAL ON THE AUDIT OF FINANCIAL STATEMENTS OF KIBUKU DISTRICT LOCAL GOVERNMENT FOR THE YEAR ENDED 30TH JUNE, 2018

THE RT. HON. SPEAKER OF PARLIAMENT

Opinion I have audited the accompanying financial statements of Kibuku 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 Kibuku 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 Governments 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 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.

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 taken 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 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). The programme, which started in the financial year 2013-2014, was to respond to the existing challenge of unemployment among the Youths. The programme, which is implemented through the District provides support to the vulnerable youth in form of revolving funds for skills development projects and income generating activities initiated by youth groups. The audit focused on an amount of UGX.225,663,659 disbursed in the Financial Year 2014/2015 whose recovery period of three years had expired by 30th June 2018. The audit procedures performed focused on ascertaining the following;  Whether all funds budgeted for YLP during the period under review were actually released and used only for the programme.  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 were transferred to the revolving fund account in Bank of Uganda to be disbursed to other Youth Livelihood Groups (YLGs) in accordance with the revolving funding model and  Whether on a sample basis the funded projects do exist and are operating. I made the following observations;

1.1 Funding of the Programme A review of the approved budget for the YLP programme revealed that the District had budgeted for a total amount of UGX.225,663,659 for the financial year 2014/2015 and the budgeted funds were released. Consequently, all the projected projects/youth interest groups were funded.

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.225,663,659 (Interest inclusive) by close of the financial year 2017/2018, only UGX.41,382,400 was collected leaving a balance of UGX.193,495,322 (18.3%) outstanding as shown in appendix 1.

I further noted that 8 out of the 38 groups that benefitted during that year had not made any repayments so far. Failure to repay in a timely manner implies that other eligible groups were unable to access the funds since this is a revolving fund. The Accounting Officer attributed this matter to misappropriation of project funds by the youth groups and that they have been handed over to police for investigation.

I advised the Accounting Officer to ensure that the matter is followed up to its logical conclusion.

1.3 Transfer of recovered funds to the recovery account in BOU. A review of the bank statements of YLP collection accounts revealed that the collected amount of UGX.41,382,400 had been transferred to the National Revolving Fund Collection Account by the end of the financial year 2017/18.

1.4 Inspection of Performance of Youth projects Physical inspection was carried out on two selected projects namely Nabiswa Youth Unisex Hair Dressing Project and Kadama Township Bakery (2014/2015) to ascertain whether they were in existence and executed in accordance with the operational guidelines.

The following observations were made;

a) Nabiswa Youth Unisex Hair Dressing Project The group received UGX.7,070,004, however, it was observed that the ladies’ section had closed and only men’s section was operating rendering the equipment idle.

b) Kadama Township Bakery The group received UGX.11,200,000. However, it was observed that no repayment had so far been made. The treasurer had disappeared with the money and the project was abandoned.

2.0 Implementation of the Uganda Road Fund Section 45 (3) of the Public Finance Management Act, 2015 states that “An Accounting Officer shall enter into an annual budget performance contract with the Secretary to the Treasury which shall bind the Accounting Officer to deliver on the activities in the work plan of the vote for a Financial year, submitted under section 13 (15) of the said Act”.

Regulation 18(3) of the Local Governments Financial and Accounting regulations 2007 requires budget estimates to be based on objectives to be achieved for the financial year and during implementation, effort to be made to achieve the agreed objectives or targets as per the programme of Council.

It has been observed over years that planned and budgeted for activities of a number of Local Governments are not implemented thereby affecting service delivery.

During the overall office wide planning, I identified risks such as inadequate release of funds and failure to undertake budget monitoring and supervision that are likely to be the causes of failure to implement the planned activities under Uganda road fund. The focus was put on the planned major outputs under Uganda Road Fund which greatly impact on service delivery in the Local Governments.

Consequently, I developed specific audit procedures which included ascertaining whether;  The budgeted URF releases for Local Governments for the year under review were actually received ;  The planned URF outputs were achieved;  The monitoring and supervision was carried out by reviewing reports to assess performance.

Based on the procedures performed, the following observations were made;

During the year under review, the district planned to undertake routine manual maintenance, routine mechanized maintenance, periodic maintenance and emergency activities on several district roads using Road Gangs and the Force Account mechanism respectively. The total budget for the planned activities amounted to UGX.237,499,824. However, the district received UGX.212,497,604 resulting into a deficit of UGX.25,002,220. The excess/deficit constituted 11% of the

budgeted amount. In his response, the Accounting Officer explained fewer funds were received than expected.

The Accounting Officer is advised to continue lobbying the Government for sufficient funding.

Status of implementation A review of planned outputs against actual performance revealed that planned outputs were not fully achieved as shown in the table below; ROAD PLANNED ACTUAL DIST DIST (KM) DONE ( KM) Routine manual Kadama-kibuku-buseta maintenance 21.2 21.2 Kibuku-saala-kirika 16.5 16.5

Tirinyi-bumiza-bulangira 10.3 10.3 kadama-kabweri-kakutu 13.4 13.4 Kadama-molokochomo-kaderuna 7.4 7.4 Midiri-buseta 3.8 3.8 72.6 72.6 Routine mechanized Kadama-kabweri-kakutu 13.4 13.4 maintenance Kadama-molokochomo-kaderuna 7.4 7.4 Midiri-buseta 3.8 3.8 24.6 24.6 a) Routine manual maintenance A total of 72.6 kms at an estimated cost of UGX.176,205,642 was planned to be undertaken as shown in the table below; Amount Budgeted Activity Planned output (UGX)) CULVERT LINES 4 88,632,443 ROADS Kadama-kibuku-buseta 21.2 km 25,572,339 Kibuku-saala-kirika 16.5 km km 19,903,000 Tirinyi-bumiza-bulangira 10.3 km 12,424,297 kadama-kabweri-kakutu 13.4 km 16,163,648 Kadama-molokochomo- kaderuna 7.4 km 8,926,194 Midiri-buseta 3.8 km 4,583,721 72.6 176,205,642

However, audit revealed that the projected 72.6kms i.e. 100% were actually undertaken at a cost of UGX.151,332,453 i.e. 86% of the budget; thus UGX.24,873,189 i.e. 14% saving on the budget.

On inspection, it was observed that; i) Kadama-molokochomo-kaderuna road An amount of UGX.8,191,000 was incurred on road works of Kadama-molokochomo- kaderuna road for 7.4km. The works involved reshaping, graveling and stone pitching of kaigongo swamp along the same road. Inspection of the works however revealed that there were no side drains, poorly compacted murram along various culvert lines, deep port holes already developing causing water logging in the road as shown in the pictures below;

This could be attributed to poor drainage. The Accounting Officer explained that the roads in question were maintained only that the state in which they were at was as a result of the heavy rains which destroyed the roads forming potholes on the carriage way.

I advised the Accounting Officer to ensure that all roads in poor state are scheduled for routine maintainance to ensure equal distribution of services in the whole district. b) Routine mechanized maintenance A total of 24.6kms at an estimated cost of UGX.48,144,340 was planned to be undertaken. Audit revealed that the 24.6kms i.e. 100% as budgeted were fully implemented within the projected cost. There was no shortfall. ROAD Planned output (KM) Amount spent Kadama-kabweri-kakutu 13.4 23,081,966 Kadama-molokochomo-kaderuna 7.4 16,450,876 Midiri-buseta 3.8 8,611,498 24.6 48,144,340

On inspection, it was observed that;

i) Kabweri swamp, kadama- kabweri- kakutu road An amount of UGX.23,470,000 was incurred on road works of Kabweri swamp, kadama- kabweri- kakutu road for 13km. These included reshaping, graveling and spot gravelling, head walls and culvert installation.

 Audit Inspection revealed that there were no side drains, poorly compacted marram being washed away  Deep pot-holes already developing causing water logging in the road as shown in the pictures below;

The Accounting Officer explained that the roads in question were maintained only that the state in which they were at was as a result of the heavy rains which destroyed the roads forming potholes on the carriage way.

I advised the Accounting Officer to ensure that all roads in poor state should be scheduled for routine maintainance to ensure equal distribution of services in the whole district. c) Periodic maintenance A total of 10.5kms at an estimated cost of UGX.13,149,842 was planned to be undertaken. However, audit revealed that the projected 10.5kms were actually undertaken at a cost of UGX.13,020,811. Planned output Amount spent (UGX.) ROAD (Kms) wooli-namuyangu-kiyalyo 5 7,329,031 deke-likitoni-nankokoli-nabuli 5.5 5,820,811 10.5 13,149,842

The Accounting Officer explained that the funds were properly utilized and output achieved.

Emphasis of matter Without qualifying my opinion, I draw attention to the following matter disclosed in the Statement of Outstanding Commitments on Page 33 in the financial statements.

3.0 Pension arrears I noted that the district had not paid UGX.289,988,267 in respect to salary, pension and gratuity Failure to make timely payments is contrary to the Pensions Act and negatively affects the welfare of the pensioners.

Other Matter In addition to the matters raised above, I consider it necessary to communicate the following matters other than those presented or disclosed in the financial statements.

4.0 Double transfer of UWEP funds It was observed that on 9th May 2018 the District received UGX.167,027,481 relating to UWEP from Ministry of Gender, Labour and Social Development (MGLSD). The MGLSD in a letter dated 9th May, 2018 requested the district to return UGX.86,128.000 that was purportedly sent erroneously. However, there was no acknowledgement receipt from the MGLSD regarding the funds. The Accounting Officer explained that there was double transfer of UWEP funds and that the excess funds were returned to MGLSD Account.

I advised the Accounting Officer to follow up the matter and obtain the necessary acknowledgement.

5.0 Staffing 5.1 Staffing Gaps The district council has an approved structure of 1,862 staff. However, out of the approved positions, only 1,347 positions were filled leaving 515 vacant representing 28% of the approved structure as shown in a table below; DEPARTMENT APPROVED FILLED VACANT %VAC Traditional Staff 259 149 110 42% Extension workers 80 16 64 80% Town councils 290 24 266 92% Health staff 247 188 59 24% Education staff primary 986 970 16 2% TOTAL 1862 1347 515 28%

Understaffing overstretches the available staff beyond their capacity, creates job- related stress to the fewer staff and negatively affects the level of public service delivery to the community. This was attributed to limited wage bill and a ban on recruitment by the Ministry of Public Service.

I advised the Accounting Officer to continue engaging the Ministries of Public Service, Local Government and Finance Planning and Economic Development to address the challenge.

5.2 Irregular Payment of Salaries to Retired Staff Section B-a (12) of the Public Service Standing Orders, 2010 requires that the payment to public officers be stopped immediately the officer ceases providing his services to the Government under whatsoever conditions including death. It was observed that UGX.21,289,117 was irregularly paid to the retired staff as shown in appendix 2. This indicates weak controls in the payroll management system and may lead to loss of public funds. The Accounting Officer explained that council made efforts to delete the names but the system continued reflecting them until when they were finally deleted.

I advised the Accounting Officer to have recoveries made and to ensure that adequate controls are implemented to avoid such lapses.

Other Information The Accounting Officer is responsible for the other information. The other information comprises the statement of responsibilities of the Accounting Officer and the commentaries by the Head of Accounts and the Accounting Officer, and other supplementary information. The other information does not include the financial statements and my auditors’ report thereon. My opinion on the financial statements does not cover the other information and I do not express an audit opinion or any form of assurance conclusion thereon.

In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially consistent with the financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work I have

9 performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard.

Management Responsibilities for the Financial Statements Under Article 164 of the Constitution of the Republic of Uganda, 1995 (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 Kibuku District Local Government.

The Accounting Officer is also responsible for the preparation of financial statements in accordance with the requirements of the Local Governments Financial and Accounting Manual, 2007 and the Public Finance Management Act 2015 and for such internal control as management determines necessary to enable the preparation of financial statements that are free from material misstatement whether due to fraud or error. In preparing the financial statements, the Accounting Officer is responsible for assessing the District’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless the unless the Accounting Officer has a realistic alternative to the contrary.

The Accounting Officer is responsible for overseeing the District’s financial reporting process.

Auditor General’s Responsibilities for the audit of the Financial Statements My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISSAIs will always detect a material misstatement, when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users, taken on the basis of these financial statements.

As part of an audit in accordance with ISSAIs, I exercise professional judgement and maintain professional scepticism throughout the audit. I also:-

 Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.  Obtain an understanding of internal control relevant to the audit 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 control.  Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.  Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the entity to cease to continue as a going concern.  Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

I communicate with the Accounting Officer regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

I also provide the Accounting Officer with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards.

From the matters communicated with the Accounting Officer, I determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I describe these matters in my auditor’s report unless

11 law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Reporting Responsibilities In accordance with Section 19 (1) of the National Audit Act, 2008, I report to you, based on my work described on the audit of Financial Statements, that; except for the matters raised in compliance with legislation section below, and whose effect has been considered in forming my opinion on financial statements, the activities, financial transactions and information reflected in the financial statements that have come to my notice during the audit, are in all material respects, in compliance with the authorities which govern them.

REPORT ON THE AUDIT OF COMPLIANCE WITH LEGISLATION The material findings in respect of the compliance criteria for the applicable subject matters are as follows;

6.0 Natural Resources A review of management of natural resources in form of land, forest reserves and wetlands in the district during the audit of the financial year 2017/2018 revealed the following shortcomings:

6.1 Lack of Certificate of Ownership of Wetlands Section 45 (1) of the Uganda Land Act, 1998 (as emended) requires a government or local government to hold in trust for the people and protect, wetlands among other natural resources for the common good of the citizens of Uganda. Documentation review revealed that the District is responsible for various wetlands including; River Mpologoma, Saala, Limoto and Gololo Wetlands. However, I was not availed with certificates of ownership of the wetlands for verification. Lack of legal ownership of the wet lands exposes them to the risks of encroachment and misuse resulting into environmental degradation. The Accounting Officer explained that the process of acquiring titles was hampered by financial constraints.

I advised the Accounting Officer to ensure that the wetlands are surveyed and issued with titles in the names of the District.

6.2 Unlicensed Activities in Wet Lands According to Section 37(3) of the National Environment Act, the authority may, in consultation with the lead agency and the district environment committee, declare any wetland to be a protected wetland, thereby excluding or limiting human activities in that wetland while Sec.36 provides for restrictions on the use of wetlands and requires a person to obtain written approval from the authority given in consultation with the lead agency.

Audit inspection revealed that there were unlicenced activities carried out on various wetlands and forests in form of cultivations, constructions, and brick making deforestation, sand mining, waste dumping and massive encroachment. The continued illegal practices in the wetlands will have adverse effects on the environment. In his response, the Accounting Officer explained that the district has started the process of forest and wetland demarcation, and the environment protection force has so far evicted over 600 farmers who had encroached on limoto wetland and the wetland is fully restored.

I advised the Accounting Officer to initiate measures to ensure that activities in the wetlands are lawful.

6.3 Mismanagement of the District’s Natural Resources The Second Schedule part 2 of the Local Governments Act prescribes the mandate of Districts. Under section 15, the functions and services for which District Councils are responsible include; assisting the Government to preserve the environment through protection of forests, wetlands, lake shores streams and prevention of environmental degradation.

Section 44 of the Land Act Chapter 227- Control of environmentally sensitive areas, requires the Government or a Local Government to hold in trust for the people and protect natural lakes, rivers, ground water, natural ponds, natural streams, wetlands, forest reserves, national parks and any other land reserved for ecological and tourist purposes for the common good of the citizens of Uganda.

However, review of documents, records and inspections of the district natural resources including; forests, wetlands both permanent and seasonal, streams, rivers and lakes revealed the following issues;

 The district has four forest reserves that include Limoto Local Forest Reserve, Goligoli Local Forest Reserve, Kabuna Local Forest Reserve and Saala Central Forest Reserve. Inspection revealed that these have suffered encroachment by local people and their boundaries are not clearly demarcated.

 The main wetlands included River mpologoma, Saala, limoto and Gololo Wetlands. Inspection revealed illegal activities like crop cultivation, rice farming, sand mining, charcoal burning and brick making. It was further observed that wetland users were not licensed and there were no clear boundaries or demarcation of the wetland.

The encroachments coupled with inadequate monitoring and supervision caused adverse impacts, such as a decline in water quality, loss of habitat (both aquatic and terrestrial), disruption of equilibrium (or naturally stable) conditions, loss of flood attenuation, or reduction of ecological processes.

I advised the Accounting Officer to ensure that natural resources are managed in a sustainable manner.

7.0 Asset Management 7.1 Lack of Land Titles Regulation 58(4) of LGFAR, 2007 requires all properties and assets of local governments to be registered and titles issued. However, it was observed that the Council does not have a land title for the land where its headquarters are located. Consequently, Council risks losing this land to the encroachers. The Accounting Officer explained that the Land in question was reported to Inspector General of Government for intervention and they are awaiting a report.

I advised the Accounting Officer to ensure that all council land is titled and that illegal occupants vacate the land.

8.0 STATUS OF BASIC MEDICAL EQUIPMENT A review of the status of the basic medical equipment at Kibuku HCIV revealed the following issues;

8.1 Poor condition of medical equipment Section 5.17 of the Service standards & Service delivery standards for the Health Sector, 2016 requires that medical equipment is available and properly maintained to

meet the needs of the patient population. However, a review of the department reports and audit inspection revealed that a number of medical equipment is obsolete, faulty and not in fair condition as shown appendix 3. Consequently, patients are referred to distant health facilities to receive the same services putting their lives at risk. This was attributed to inadequate funding of the health units and lack of replacement plan by the Health Centre.

I advised the accounting officer to liaise with the Ministry of Health to ensure that the matter is addressed.

8.2 Lack of skilled personnel to manage medical equipment Health Sector Service Standards & Service Delivery Standards, 2016 Section 5.17.2 requires a health facility to ensure that a designated person supervises the management of medical equipment in the health facility while Section 2.6.1 states that a suitably qualified person is designated to manage storage, distribution and control of equipment and supplies.

It was observed that Kibuku health centre IV lacked skilled staff to operate and manage some of the medical equipment that are supposed to be used by an Ophthalmiscit. The machines like Himoque and Chemistry analyser are also not in use due to lack of reagents. Management attributed this to funding gaps and staff ceiling which have limited the districts’ ability to recruit and fill the vacant posts as well as sponsor medical staff to attain the required skills. Lack of skilled staff required to handle and operate the specialist medical equipment leads to poor diagnosis and increased costs due to poor handling of equipment.

The Accounting Officer is advised to engage the Ministry of Health for the necessary support to address the above shortcomings in order to improve service delivery.

8.3 Non-disposal of obsolete equipment Section 5.17.8 of the Health Sector Service standards & Service delivery standards, 2016 requires that, there is a disposal plan for medical equipment in accordance with legislation. It was observed that, several equipment including other assets at the Health Centre that were obsolete were piled in the store and there was no evidence

that the items would be disposed of in the near future as shown in Appendix 3. This was attributed to lack of a disposal plan at the district for such obsolete items. Non-disposal of obsolete equipment may lead to health hazards. According to the Accounting Officer, the cost of repairing the equipment in question is more that 10% of the cost hence will be recommended for disposal.

The matter requires urgent attention by the Accounting Officer.

9.0 Procurements and Works 9.1 Slitting, drilling and installation of bore holes- On 4th September 2017 the district awarded a contract for drilling and installation of 8 bore holes under contract kibu/605/wrks/17-18/00004 worth UGX.220,471,200.

 Inspection on 22.08.2018 at Namuyomba, Bumiza and Kituti revealed that the boreholes are always breaking down forcing the community to undertake regular repairs, with some having no soak pits  The water flow on Bumiza takes approximately a minute to start irrespective of the pressure exerted on it.  Water in the soak pit is not flowing as required as shown in the pictures below;

The Accounting Officer explained that the frequent breakdown was due to miss handling of the boreholes by the users most especially in areas where there’s high influx of children. After construction, the responsibility of caring and handling minor maintenance is in the hands of the users. He further indicated that it is only the major repairs that are reported to the sector, which thereafter plans for such need. He also indicated that the water sources are still in the defects liability period, the contractor was notified on the need to come and rectify on the defects.

I await further action to address the matter.

10.0 Capitation Grant 10.1 Failure to meet minimum required Standards of UPE Schools Paragraph 2.2.1 of the revised Local Governments Management and Service Delivery (LGMSD) operational manual provides minimum service delivery package for a primary school. Inspection of various UPE schools revealed that there was shortage of teachers, inadequate and inferior latrine facilities, inadequate desks and classrooms among others. These conditions negatively affect the academic performance of the pupils.

The Accounting Officer admitted the challenges faced by UPE schools, but attributed it to inadequate funding. He indicated that the district had set aside additional funding from the DDEG allocation and that he had also encouraged Sub-counties to allocate resources towards infrastructure improvement.

I await further action to address the matter.

11.0 Governance and Oversight 11.1 Evaluation of Internal Audit function Section 90 of the Local Governments Act requires every district council to provide for an Internal Audit department. However, a review of the function of internal audit department revealed that the department is understaffed with only one (1) staff out of the approved 2 staff. Lack of sufficient staff hampers the ability of the department to fulfil its mandate of continuously checking and ensuring the internal controls are in place and working effectively. The Accounting Officer explained that an internal advert was made to fill the position of District Internal Auditor. The few applicants received did not qualify to fill the position. Therefore, the District Service Commission decided that the position be re-advertised.

I advised the Accounting Officer to ensure that the internal audit department is adequately staffed for effective service delivery.

John F.S. Muwanga AUDITOR GENERAL KAMPALA

7th December, 2018

Appendices Appendix 1: The YLP Repayment Schedule

5% services fee Date of Amount Repayment RECOVERABLE where Project name disbursed disbursed date AMOUNT applicable Amount Recovered Amount due Remarks Bubera Youth Hair Dressing recoveries still Project 29.06.2015 6,000,000 30.10.2015 4,935,000 235,000 1,300,000 4,700,000 on going Bubulanga A Produce Buying and Selling Project 17.06.2015 4,076,000 30.09.2015 4,279,800 203,800 4,076,000 -do- Buganza Youth Dairy Heifer -do- Rearing Project 16.06.2015 6,780,000 30.03.2016 6,856,500 326,500 250,000 6,530,000 Buganza Youth Ground Nuts -do- Farming Project 16.06.2015 6,635,000 01.03.2016 6,126,750 291,750 800,000 5,835,000 Bugwere Youth Goat Rearing -do- Project 17.06.2015 5,450,000 03.04.2016 1,066,800 50,800 4,434,000 1,016,000 Bukachera Youth Brick Making -do- Project 17.06.2015 5,008,000 28.02.2016 2,811,900 133,900 2,330,000 2,678,000 Bukatikoko Youth Dairy Cattle -do- Project 17.06.2015 9,788,000 30.04.2016 9,017,400 429,400 1,200,000 8,588,000 Bulalaka Youth Produce Buying -do- and Selling Project 16.06.2015 5,388,500 30.11.2015 4,439,925 211,425 1,160,000 4,228,500 Bulyampiti Youth Produce Buying -do- and Selling Project 29.06.2015 4,657,000 31.10.2015 2,363,130 112,530 2,406,400 2,250,600 -do- Bumiza Youth Bakery Project 16.06.2015 7,749,370 28.02.2016 7,842,839 373,469 280,000 7,469,370 Buseta I Youth Metal Fabrication -do- Project 29.06.2015 8,500,000 31.01.2016 8,347,500 397,500 550,000 7,950,000 Busiginyi Produce Buying and -do- Selling Project 16.06.2015 4,658,200 30.10.2015 1,846,110 87,910 2,900,000 1,758,200

5% services fee Date of Amount Repayment RECOVERABLE where Project name disbursed disbursed date AMOUNT applicable Amount Recovered Amount due Remarks Buyamba Youth Produce Buying -do- & Selling 16.06.2015 5,000,000 30.12.2015 5,040,000 240,000 200,000 4,800,000 Bwibere Youth Improved Piggery -do- Rearing Project 16.06.2015 6,780,000 30.03.2016 5,869,500 279,500 1,190,000 5,590,000 Dokya Youth Improved Goat -do- Rearing Project 16.06.2015 6,100,000 31.12.2015 4,987,500 237,500 1,350,000 4,750,000 Kabusule B Youth Dairy Heifer -do- Rearing Project 16.06.2015 6,780,000 30.02.2016 7,119,000 339,000 6,780,000 Kadama Youth Produce Buying & -do- Selling 6,500,000 5,985,000 285,000 800,000 5,700,000 Kadoto Youth Produce Buying -do- and Selling Project 16.06.2015 5,000,000 23.06.2015 5,250,000 250,000 5,000,000 Kagumu Twekolele Youth -do- Tailoring Project 16.06.2015 6,751,175 05.01.2016 6,511,234 310,059 550,000 6,201,175 Kakunyumunyu Youth Bakery -do- Project 16.06.2015 6,293,029 30.11.2015 6,607,680 314,651 6,293,029 Kalampete Youth Galic Growing -do- Project 17.06.2015 5,600,000 4,686,150 223,150 1,137,000 4,463,000 Kasasira I Youth Empowered -do- Piggery Project 29.06.2015 5,980,000 31.12.2015 6,279,000 299,000 5,980,000 Kasasira Township Organic -do- Piggery Youth Project 16.06.2015 6,800,000 30.06.2016 6,100,500 290,500 990,000 5,810,000 -do- Kategere Youth Salon Project 16.06.2015 5,042,000 30.10.2015 4,769,100 227,100 500,000 4,542,000 Katiryo I Youth Cattle Trade -do- Project 16.06.2015 5,048,000 30.10.2015 4,859,400 231,400 420,000 4,628,000 -do- Kibuku Youth Turkey Rearing 16.06.2015 7,330,221 30.04.2015 6,804,232 324,011 850,000 6,480,221

5% services fee Date of Amount Repayment RECOVERABLE where Project name disbursed disbursed date AMOUNT applicable Amount Recovered Amount due Remarks Project Kwankira Youth Piggery Rearing -do- Project 16.06.2015 5,322,000 30.01.2016 5,588,100 266,100 5,322,000 Lyama Youth Produce Buying and -do- Selling Project 29.06.2015 5,000,000 23.06.2015 2,625,000 125,000 2,500,000 2,500,000 Nabikabala Youth Produce Buying -do- and Selling Project 16.06.2015 4,703,266 30.08.2015 3,137,679 149,413 1,715,000 2,988,266 Nabuli Youth Animal Traction -do- Project 16.06.2015 6,280,000 30.01.2016 4,704,000 224,000 1,800,000 4,480,000 Nakitende Youth Animal Traction -do- Project 16.06.2015 6,285,000 30.10.2015 5,549,250 264,250 1,000,000 5,285,000 Nakooma Youth Goat Rearing -do- Project 29.06.2015 6,090,000 30.06.2016 6,079,500 289,500 300,000 5,790,000 Namiru Youth Tailoring and -do- Garment Cutting Project 16.06.2015 5,810,000 28.02.2106 5,365,500 255,500 700,000 5,110,000 Namuyonga II Youth Produce -do- Buying And Selling Project 17.06.2015 5,231,898 30.10.2015 2,941,993 140,095 2,430,000 2,801,898 -do- Nankodo Youth Tailoring Project 29.06.2015 5,630,000 31.01.2016 5,911,500 281,500 5,630,000 Nansonko Youth Produce Buying -do- and Selling Project 16.06.2015 6,000,000 30.10.2015 2,215,500 105,500 3,890,000 2,110,000 -do- Natoto B Youth Piggery Project 16.06.2015 4,617,000 30.12.2015 4,847,850 230,850 4,617,000 Pulaka Kenya Produce Buying -do- and Selling Project 16.06.2015 5,000,000 30.11.2015 3,727,500 177,500 1,450,000 3,550,000

225,663,659 193,495,322 9,214,063 41,382,400 184,281,259

5% services fee Date of Amount Repayment RECOVERABLE where Project name disbursed disbursed date AMOUNT applicable Amount Recovered Amount due Remarks

Appendix 2: Irregular Payment of Salaries to Retired Staff EXTRA MONTH ON NAME DATE OF RETIREMENT MONTH OFF THE PAYROLL THE PAYROLL AMOUNT PAID TOTAL MULABBI PONSIANUS 19.05.2018 still on the June payroll 1 537,837 537,837 NDIBOLA ROBERT 10.04.2018 -do- 2 555,100 1,110,200 -do- NAMUBYA IRENE 19.03.2018 3 700,146 2,100,438 -do- HASAKYA BEATRICE 25.01.2018 5 537,837 2,689,185 -do- NYANGO ERINEST 14.02.2018 4 537,837 2,151,348 -do- MULUGA JOHN BOSCO 15.01.2018 5 700,146 3,500,730 -do- MUKENYE STEPHEN 30.01.2018 5 436,677 2,183,385 -do- GONGOBERO WILSON 08.01.2018 5 237,069 1,185,345 -do- KOLYANGA JOHN H 10.01.2018 5 413,158 2,065,790 -do- 537,837 AGURAMA MARGRET 30.11.2017 7 3,764,859 TOTAL 21,289,117

Appendix 3: Status of basic medical equipment A. THEATRE AVAILA NAME OF EQUIPMENT QUANTITY MISSING USE/PURPOSE EXISTANCE CONDITION REMARKS BLE C/s sets (caesarean sets) 5 3 2 For C-Section operations Yes functional Oxygen cylinders (large no oxygen key and 3 2 1 For administration of Oxygen Yes functional size) head For operation and management of Hernia sets 4 2 2 Yes functional Hernia D&C sets 3 1 2 Used for dilatation and curettage Yes functional the hospital doesn’t own MVA 3 0 3 For manual volume aspiration no any Ambu bag Used to provide positive pressure 1. Neonatal 2 1 1 Yes functional ventilation Used to provide positive pressure 2. Adult 2 1 1 Yes functional ventilation Penguin sucker 2 1 1 Helps in clearing the babies airway Yes functional the hospital doesn’t own Nasal oxygen prongs 10 0 10 Used to deliver supplementary oxygen no any Surgical incision into the abdomen for Laparotomy set 2 1 1 Yes functional evacuation or preparation for surgery Non-invasive method for monitoring the hospital doesn’t own Pulse oximeter 2 0 2 no oxygen levels any Suction machine Boyle’s machine bp calf 5 1 4 For administering anaesthesia Yes functional Anaesthetic trolley 1 0 1 For administering anaesthesia no the hospital doesn’t own

AVAILA NAME OF EQUIPMENT QUANTITY MISSING USE/PURPOSE EXISTANCE CONDITION REMARKS BLE any Oxygen concentrator 10 1 9 For administering oxygen Yes functional Portable operating light 2 1 1 Provide light during operations Yes not- functional can be repaired no skin temperature baby warmer 1 1 0 sensor Blood pressure 2 1 1 Measuring pressure Yes functional machines[bp] Autoclave the hospital doesn’t own 2. Non electric 1 0 1 Used for sterilization no any

B. OPHTHALMIC DEPARTMENT- IDLE EQUIPMENT -NO STAFF

Used for examining the interior of the Slit lamp 1 1 eye Used to determine the intraocular Tonometer 2 2 pressure Majorly for the inspection of the no staff to operate Ophthalmoscope 2 2 0 yes functional retina the equipment Used in reflection and refraction Refraction set 2 2 demonstrations Lid rotation set 2 2 For examining and surgery of the eye Loop (with lights and 3 3 Used in eye surgery battery) C. MATERNITY

AVAILA NAME OF EQUIPMENT QUANTITY MISSING USE/PURPOSE EXISTANCE CONDITION REMARKS BLE Delivery sets 5 4 1 For the delivery of new born yes functional the health centre Blood pressure 5 0 5 Measuring blood pressure no borrows from the machines[bp] theatre one functional, one not Fetoscopes 10 2 8 Allow access to the foetus yes broken functional MVA sets (manual vacuum 2 3 -1 For manual volume aspiration yes not functional broken aspiration sets) worn out probe, and Ultra sound scan machine cost for a new one is 1 1 0 Used for scanning yes not functional (basic) for obstetrics same as buying the new scan Used for aspiration or cleaning of Penguin sucker 5 3 2 yes functional mucus Ambubag Used to provide positive pressure 1. Adult 2 1 1 yes functional ventilation Used to provide positive pressure 2. Neonatal 3 1 2 yes functional ventilation Autoclave the hospital doesn’t own 2. Non electric 1 0 1 Used for sterilization no any LABORATORY

Keep reagents below room Refrigerator for reagents 1 1 0 yes functional temperature

AVAILA NAME OF EQUIPMENT QUANTITY MISSING USE/PURPOSE EXISTANCE CONDITION REMARKS BLE Keeping blood at recommended the hospital doesn’t own Blood bank refrigerator 1 0 1 no temperature any For microscopic examination of one functional, one not taken to mbale for Microscopes 2 2 0 yes samples functional repair Electric centrifuges (bench 5 2 3 Separation of fluids from densities yes not functional broken top) the hospital doesn’t own Autoclave (in wash up) 1 0 1 For sterilization no any the hospital doesn’t own Bunsen burner 1 0 1 For drying slides no any For determination of the Chemistry analyser 1 1 0 yes functional no reagents concentration of analyses