Office of the Auditor General the Republic of Uganda

OFFICE OF THE AUDITOR GENERAL

THE REPUBLIC OF UGANDA

REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF

MAKINDYE SSABAGABO MUNICIPAL COUNCIL

FOR THE YEAR ENDED 30TH JUNE 2018

OFFICE OF THE AUDITOR GENERAL UGANDA

TABLE OF CONTENTS

Key Audit Matters ...... 4 1.0 Implementation of the Uganda Road Funds...... 4 1.2 Budget Performance ...... 5 1.3 Status of implementation ...... 5 1.4 Routine manual maintenance ...... 5 1.5 Routine mechanized maintenance ...... 5 1.6 Periodic maintenance ...... 5 1.7 Unimplemented works ...... 6 1.8 Inspection of Bunamwaya-Kisigula-Mutundwe Mirembe Road ...... 6 1.9 Inadequate Road Equipment ...... 7 1.10 Lack of Bill of Quantities/Detailed scope of works ...... 7 Emphasis of matter ...... 8 Other Matter ...... 9 Other Information ...... 11 Management Responsibilities for the Financial Statements ...... 11 Auditor General’s Responsibilities for the audit of the Financial Statements ...... 12 Other Reporting Responsibilities ...... 13 REPORT ON THE AUDIT OF COMPLIANCE WITH LEGISLATION ...... 14 9.0 Management and Utilization of Natural Resources ...... 14 9.1 Illegal developments in Kaliddubi wetland ...... 14 APPENDICES ...... 23 Appendix 1: Budget performance for Uganda Road Fund (URF) ...... 23 Appendix 2: Under Realization of Capitation Grants ...... Error! Bookmark not defined. Appendix 3: Existence and Status of Medical Equipment ...... 25 Appendix 5: Lack of Contract Implementation Plans and Management Reports...... 27

C/U Church of Uganda

DLG District Local Government

IESBA International Ethics Standards Board for Accountants

IFMS Integrated Financial Management System

INTOSAI International Organization of Supreme Audit Institutions

ISSAI International Standards of Supreme Audit Institution

ISSAI International Standards of Supreme Audit Institutions

KMS Kilometres

LGFAM Local Governments Financial and Accounting Manual 2007

LGFAR Local Governments Financial and Accounting Regulations 2007

LGMSD Local Government Management and Service Delivery

MC Municipal Council

MoESTS Ministry of Education Science and Technology and Sports

MoFPED Ministry of Finance Planning and Economic Development

MoGLSD Ministry of Gender Labour and Social Development

NAA National Audit Act

PFMA Public Finance Management Act 2015

PS Primary School

S/C Sub-County

UGX Uganda Shillings

UPE Universal Primary Education

USE Universal Secondary Education

YLP Youth Livelihood Programme

REPORT OF THE AUDITOR GENERAL

ON THE AUDIT OF FINANCIAL STATEMENTS OF MAKINDYE SSABAGABO MUNICIPAL COUNCIL

FOR THE YEAR ENDED 30TH JUNE, 2018

THE RT. HON. SPEAKER OF PARLIAMENT

Opinion

I have audited the accompanying financial statements of Makindye Ssabagabo Municipal Council 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 Makindye Ssabagabo Municipal Council for the year ended 30th June 2018 are prepared, in all material respects, in accordance with section 51 of the Public Finance Management Act, 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 Municipal Council 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 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 Implementation of the Uganda Road Funds 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 Government 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;

1.2 Budget Performance A total of UGX.216, 677,000 was budgeted to cater for routine manual maintenance, routine mechanised maintenance, periodic maintenance and emergency activities on several Municipal Council roads using Road gangs and the force Account mechanism. The Municipal Council realised a positive performance of UGX.245, 861,863 (113%) of budget. The extra amount received of UGX.29, 184,863 constituted 13% of the budgeted amount. The Accounting Officer explained that the scope of works was revised in procurement requisitions and call off orders for the respective service providers.

1.3 Status of implementation A review of planned outputs against actual performance is shown in appendix 1.

1.4 Routine manual maintenance A total of 24kms at an estimated cost of UGX.31, 350,000 was planned to be undertaken. Audit revealed that 29kms (121%) were undertaken at a cost of UGX.42, 191,900 (134%) above the budget. This reflected extra spending of UGX.10, 841,900 (35%). The Accounting Officer attributed the positive performance to the extra funds received from the Uganda Road Fund.

1.5 Routine mechanized maintenance A total of 2kms at an estimated cost of UGX.12, 417,000 was planned to be undertaken. However, it was revealed that 11kms (550%) above the budgeted length were actually undertaken at a cost of UGX.73,327,200 reflecting excess spending over the budgeted funds by UGX.60,910,200 (490%)

The Accounting Officer attributed the positive performance to the extra funds received from the Uganda Road Fund.

1.6 Periodic maintenance

A total of 3kms at an estimated cost of UGX.75, 000,000 was planned to be undertaken. Audit revealed that 3kms were actually undertaken at a cost of UGX.79,

000,000 (105%) above the budget. This reflected extra spending of UGX.4, 000,000 (5%) of the budged funds.

The Accounting Officer attributed the over performance to the extra funds received from the Uganda Road Fund.

I advised the Accounting Officer to always ensure proper costing of activities to avoid over and or under spending.

1.7 Unimplemented works

Whereas the Municipal Council realised 113% of its budget for road works, management did not implement routine mechanized maintenance works on Kigo- Kanaba Road (2.7km) which had been budgeted at UGX.62, 100,000.

The Accounting Officer explained that due to public demand, works on Kigo-Kanaba were not implemented as the funds were reallocated to maintain Kisigula- Mutundwe Road.

I advised the Accounting Officer to always adhere to the work plan and ensure that planned activities are implemented.

1.8 Inspection of Bunamwaya-Kisigula-Mutundwe Mirembe Road

Inspection of Bunamwaya- Kisigula-Mutundwe Mirembe Road (5km) revealed that the road was opened and widened. However, I noted that there were some electric poles in the above road which were not relocated. There is a risk that this may cause accidents to by-passers and or residents leading to litigation costs against the Municipal Council.

The Accounting Officer explained that though majority of the low voltage poles were relocated, high voltage poles were costly to relocate as the budget could not support the activity. I advised the Accounting Officer to plan adequately and ensure a relocation of poles is done to avoid accidents.

1.9 Inadequate Road Equipment

Under the force account policy, agencies are required to use their own labour and equipment to perform work. A complete set of road equipment under the control of Local Governments include; motor Grader, wheel Loader, bulldozer, excavator, cargo truck, drum trucks, Water Bowser, Low Bed Tractors and Trailer and Bitumen Distributor Tank and others. However, for the financial year under review; I noted that the municipality, despite having a road network of 380 km, lacked majority of the equipment as shown below;

No Equipment type Required Actual /Available Variance/Lacking 1 Bull dozer 1 0 1 2 Tipper 2 1 1 3 Pneumatic Roller 1 0 1 4 Steel roller 1 0 1 5 Ped roller 3 0 3 6 Excavator 1 0 1 7 Distributor 1 0 1 8 Pick-ups 2 0 2 9 Water bowser 2 0 2

In adequate road equipment causes persistent breakdown of the overworked equipment which causes delays in road maintenance and there by impact negatively on service delivery. Additionally, lack of own equipment accelerated the high expenditure on hire of equipment which amounted to UGX.159, 069,003 for the financial year under review.

The Accounting Officer explained that efforts had been made to lobby the Ministry of Works and Transport to consider supporting the newly established municipalities.

I wait the outcome of the Accounting Officer’s efforts.

1.10 Lack of Bill of Quantities/Detailed scope of works

Form ‘A’ Annex 14 of the Scheme For Maintaining District And Urban Roads Using Own Equipment And Road Gangs Guidelines (Revised), January 2013 stipulates the program schedule for force account works.

However, I noted that force Account works worth UGX.152, 327,200 lacked the detailed scope of works (BOQ) as stipulated in the Form. The Accounting Officer explained that the roads were inspected to assess the scope of works therein during the budgeting process and forwarded them to Procurement and Disposal Unit where

standard prices per hour are given by Ministry of Works and Transport. However, I was not availed evidence to that effect during verification and therefore not able to confirm that the quantity and cost of materials, equipment and tools used and the labor cost were in line with the planned/executed works.

I advised the Accounting Officer to always ensure that the detailed scope of works is prepared for all force Account works as prescribed by the regulations.

Emphasis of Matter

Without qualifying my opinion, I draw attention to the following matter disclosed in the financial statements.

2.0 Outstanding Commitments I noted that the Municipal Council had outstanding commitments totalling to UGX.432, 809,722 as shown under note 24 on page 35 of the financial statements. This includes pension liability of UGX.81, 816,951 and other payables of UGX.350, 992,771. Delayed payment of pension denies beneficiaries the opportunity of enjoying their timely benefits while other outstanding commitments may lead to litigation and or confiscation of Council assets.

I advised the Accounting Officer to follow up the matter with the Ministry of Public Service and MoFPED to ensure that the outstanding commitments are settled.

3.0 Unspent Conditional Grants

I noted that the Municipality had unspent balances to the tune of UGX.73,783,362 that included UGX.28,894,494 for wage and UGX.44,888,868 for non-wage recurrent as at the end of the year.

Unspent balances indicate a weakness in implementation of budgeted activities and signals underperformance.

The Accounting Officer explained that unspent balances for wage were as a result of wage not consumed due to delayed recruitment of staff by Wakiso District Service Commission and un-applied Electronic Funds Transfers (EFTs) for the Youth Livelihood Projects (YLP) and Uganda Women Enterprises Programme (UWEP) beneficiary groups which had problems of wrong account details by the end of the period

I advised the Accounting Officer to always ensure conditional grants are fully utilised for the intended activities.

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 Revenue Management

4.1 Lack of Local Revenue appeals tribunal Section 80 of the Local Government Act, 2008 (Amended) requires the Accounting Officer to establish a tax enumeration committee, a tax assessment committee and an appeals tribunal. However, I noted that council did not have an independent body to handle disputes among taxpayers. Consequently, disputes in revenue assessments could not be handled which could result in litigation costs such as Civil Suit HCCS No. 654/2017- Roofings Limited Vs Makindye Ssabagabo Municipal Council and potential loss of revenue

The Accounting Officer explained that the tribunal had since been established. However, I was not availed evidence during verification to confirm the same.

I advised the Accounting Officer to ensure that the local Revenue appeals tribunal is operationalised.

5.0 Under staffing A review of the Municipal Council staff establishment revealed that out of 148 approved posts only 36 (24%) posts were filled leaving 112 posts (75%) unfilled. Understaffing overstretches the available staff beyond their capacity, creates job-related stress to the fewer staff and negatively affects the level of Health service delivery to the community. I raised this matter in my previous audit report but the challenge has not been addressed.

The Accounting Officer explained that the Municipal Council received a clearance letter from Ministry of Public Service to recruit critical positions and attributed the staffing gaps to the low wage bill available.

I await the outcome of the recruitment exercise.

6.0 Lack of legal ownership of Municipal Assets Regulation 58(4) of the Local Governments Financial and Accounting Regulations 2007 requires that properties and assets of a Local Government should be properly registered and titles issued.

However; I noted that two motor vehicles Registration Numbers LG004-55 and LG0003-55 lacked log books. In the circumstances; I could not confirm ownership of these vehicles. Lack of legal ownership could lead to misappropriation of assets.

The Accounting Officer explained that a formal communication was submitted to Wakiso District Local Government requesting for the said documents.

I advised the Accounting Officer to ensure the log books are obtained.

7.0 Developments on untitled land

Regulation 58(4) of the Local Governments Financial and Accounting Regulations 2007 requires that properties and assets of a Local Government should be properly registered and titles issued. However, I noted that the Municipal Council constructed facilities like schools at various sites where it did not have legal ownership or memorandum of understanding with the Landlords. Some of the schools included Busabala Primary School and Namasuba UMEA Primary School. Lack of legal ownership could lead to loss of the huge investments under taken thereon.

The Accounting Officer explained that the concern was taken care of and started on formalizing the land where municipal facilities are situated but the process was still on- going. I await the outcome of the steps being taken.

8.0 Underfunded Youth Livelihood Program Review of the budget performance for the program revealed that whereas Makindye Ssabagabo Municipal Council had budgeted for a total amount of UGX.359,599,177 for the FYR 2017/2018, only UGX.133,034,000 was realized resulting in a shortfall of UGX.226,565,177 (63%).

Underperformance/funding was attributed to budget cuts by Ministry of Gender Labour and Social Development. Inadequate funding of the program undermined the

intended objective of responding to the challenge of unemployment among the Youths.

The Accounting Officer explained that the MoGLSD communicated the project YLP IPF for the FYR 2017/18 as UGX.359, 599,177 but during the course of the financial year, and advised the Local Governments to generate projects worth half the original IPF. The Ministry further issued Guidelines pertaining to the utilization of recovered funds to accommodate more beneficiary groups.

I advised the Accounting Officer to continuously engage the Ministry for more allocation of funds to the program for the youth.

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 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 Makindye Ssabagabo Municipal Council. 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

11 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 Municipal Council’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 Municipality’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 Municipality’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 Municipality’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 Municipality 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 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;

9.0 Management and Utilization of Natural Resources

9.1 Illegal developments in Kaliddubi wetland Section 37 (3) and section 36 of the National Environment Act requires that the wetland and other natural resources be protected and the impact of any human activity be minimized and a person to obtain written approval from the authority given in consultation with the lead agency. However, during inspection of Kaliddubi wetland in Masajja Division I noted that there were illegal developments in the wetland as shown in the pictures below.

Parts of Kaliddubi wetland that has been encroached on

I further noted that the wetland was not demarcated, measured and there was no register for wetlands in place. This was attributed to limited enforcement and staff gaps in the Physical Planning Department. Developments in a wetland deny the populace benefits of a wetland most especially the adjacent communities.

The Accounting Officer explained that the Municipal council secured a clearance letter from the Ministry of Public Service allowing the municipality through the District Service Commission to recruit enforcement staff mainly the Senior Enforcement Officer, Enforcement Assistants and Town Agents in financial year 2018/2019.

I await the outcome of the Accounting Officer’s communication.

10.0 Status of Basic Medical Equipment at Ndejje HC1V Section 5.17.1 of the Health Sector Service standards & Service delivery standards, 2016 requires each health facility to ensure that appropriate medical equipment is available for service delivery and level of care. However; inspection of the medical equipment at Ndejje HC1V revealed the following anomalies; Issues Observation Lack of Maintenance The facility lacked maintenance records and thus identification Records of repair needs becomes a problem. Lack of power surge The health centre lacked power surge protection for protection expensive equipment and lack of inverters and solar backups especially in the neonatal unit which may cost a life. Un-repaired equipment and Some equipment needed repair and replacement while some non-existent equipment. others were not in existence as per the details given in appendix 2

Lack of medical equipment and or timely repairs may lead to wrong diagnosis and loss of lives.

The Accounting Officer explained that power surge protection and non-existent/non- functional medical equipment were earmarked to be budgeted for in the financial year 2019/2020.The Municipal Council had a standby generator in case of power outage, the lighting in maternity is predominantly powered by solar and intended to install an automatic changeover switch on the existing generator.

I advised the Accounting Officer to plan adequately and ensure the listed anomalies are resolved for improved health service delivery.

11.0 Garbage Management

Sec 14 of Part Five-A of the Second Schedule of the Local Government Act, 1997 Cap 243 (as amended) provides; amongst functions and services to remain at city or Municipal Council (not to be devolved to the divisions), Procurement and management of refuse tipping sites.

However, I noted the following challenges concerning garbage management in the Municipal Council as summarised below;

. There are no by-laws on garbage disposal and management; . The Municipal does not have equipment and logistics for garbage collection and disposal; . There is no solid waste management system in place; . There is no data and records maintained on the garbage volumes generated annually in order to make appropriate budgetary plans for its management; . Although waste management was budgeted for at UGX.14,000,000; this was not realised by the yearend; . Lack of adequate public awareness in waste disposal and management; . There are no compost plants in place; . The Municipal does not have land for waste disposal and refuse tipping site. Lack of waste collection and disposal poses a public health risk and environmental pollution that could result into outbreak of communicable diseases such as Cholera due to accumulation of uncollected garbage.

The Accounting Officer explained that the challenge was the meagre budget. However, the Municipal Council had drafted a solid waste ordinance and submitted to the solicitor General for interpretation and guidance.

I advised the Accounting Officer to take up the matter with appropriate authorities for funding and support. Meanwhile; continuous follow up on the steps taken is encouraged.

12.0 Management of Procurement

12.1 Irregular Procurement for construction of a perimeter wall Regulation 81(7) (c) of the Local Government Public Procurement and Disposal of Public Assets (LGPPDA) Regulations 2006, requires the evaluation report to contain recommendations whether negotiations should be held with the recommended bidder to achieve a reasonable contract price.

However; I noted that the contract for construction of a perimeter wall at the Municipal Council was awarded to P & D Traders and contractor limited having been declared the best evaluated bidder at a contract price of UGX.358, 252,715 by the evaluation committee and subsequently approved by the contracts committee.

However, the contract was eventually awarded to Infracon Infrastructure Construction at a contract price of UGX.257, 658,227 irregularly when it had failed at eligibility stage.

I was not availed with evidence to show that management took an initiative to negotiate with the best evaluated bidder for a lower contract sum. I further noted the following anomalies in contract management;

. There was no evidence that the contract was submitted to the contracts committee for consideration and approval as required by Regulation 86(2). . The contracts committee did not approve the draft contract prior to its issue as required by Section 18(3) of the LGPPDA Regulations 2006. Flouting of procurement procedures is irregular and may lead to loss of value for money benefits.

I advised the Accounting Officer to always ensure compliance with the procurement regulations.

12.2 Lack of Contract Implementation plans and management Reports Regulation 121 of the LGPPDA Regulations, 2006 requires the procurement and disposal unit to keep records of all contracts placed by a procuring and disposing entity. The Procuring and disposal unit is required to inspect records of user departments relating to contract management and prepare reports from user departments relating to contract management.

However; a review of a sample of contracts worth UGX.2, 220,133,451 revealed that the files lacked contract documents like Contract implementation plans and Contract

management reports as indicated in appendix 3.

The Accounting Officer explained that Contract Implementation plans and management reports were available for verification. However, I was not availed contract implementation plans and management reports for verification.

Failure to put in place good implementation plans, monitor contract implementation and report contract performance cause delays in implementation and poor contract performance culminating into paying for shoddy works.

I advised the Accounting Officer to always ensure compliance with the procurement Regulations.

13.0 Physical Planning Committee Part III, Section 11 of the Physical Planning Act 2010, states that each urban authority or city shall establish an urban physical planning committee which shall consist of; the town clerk, who shall be the chairperson; the urban physical planner, who shall be the secretary; the city, municipal or town engineer; the district environmental officer; a land surveyor; an architect; and physical planner in private practice appointed by the council on the advice of the town clerk.

However, during the review; I noted that a physical planner in private practice was appointed however; he had never attended any meeting at the Municipal Council. I further noted that the committee had inadequate funding to carry out all its mandated activities as it only relies on local revenue that is meagre. As a result; there is limited enforcement as the department only has a senior physical planner but lacks a physical planner and land supervisor. The Accounting Officer explained that efforts were always done to inform the physical planning committee member from the private practice to attend meetings. However, he was always busy on his organisation’s work. He further stated he would lobby for more funds from other sources such as non-wage unconditional grant to support the unit while enforcement unit staffing is getting resolved following clearance to recruit enforcement staff.

The above challenges greatly affect the physical planning activities of the Municipal and could lead to unplanned developments as the Municipality is increasingly becoming densely populated.

I advised the Accounting Officer to ensure that the committee is fully constituted and functional and ensure adequate support to the unit.

14.0 Capitation Grants

14.1 Under realization of Capitation Grants Regulation 32 of the Local Governments Financial and Accounting Regulations, 2007 requires the Head of Finance to ensure that all revenue due to Council is properly collected in an approved manner and banked intact.

However; I noted that while UGX.94,990,000 (UGX.10,000*9,499 pupils) should have been received by the Municipal Council; only UGX.80,251,406 was received resulting into a variance of UGX.14,738,594 (16%) as shown in appendix 4

The Accounting Officer explained that the issue of non-realisation of projected capitation was raised before the Ministry of Education officials and MoFPED during the budget preparatory conference for FYR 2019/2020. Shortfall in funding affects achievement of the set objectives of Universal Primary Education (UPE) and service delivery in the education sector.

I advised the Accounting Officer to follow up the matter with Ministry of Education and Sports and Ministry of Finance to ensure all grants are received.

14.2 Insufficient School Infrastructure Paragraph 2.2.1 of the revised Local Governments (LGMSD) Operational Manual provides minimum service delivery package for a primary school. The package includes; classrooms; pupil desks, pit latrines (for pupils and teachers), teachers desks, teachers chairs, teachers houses and water availability. Inspection of a sample of Government aided primary schools in the Municipal Council showed the following findings;

Status of Current status/Observation Infrastructure/Conditi on i) Busabala P/S Busabala P/S is a government aided primary school located in Masajja division in Makindye Ssabagabo Municipal council. It has an enrolment of 402 pupils and 9 teachers..

Poor state of It was poorly built and is on the verge of collapsing. It is used by P.3 class School infrastructure

Dilapidated classroom block at Busabala P/S There is a risk that the current state may not withstand a calamity in case of heavy rains and strong winds. Lack of A two classroom block was built under School facilities grant (SFG) during the furniture financial year under review as shown below however; the classrooms are not furnished and this has affected its full utilisation.

Picture of newly constructed classroom block without furniture

Inquiry with Contract Supervisor showed no clear plan for furnishing of the

classrooms yet the supply of furniture was not part of the contractor’s obligation. There is uncertainty as to when the classrooms will be furnished.

In adequate The school accommodates only 5 teachers in the school out of the nine (9) teachers. Staff The building that houses the 5 teachers was meant for 3 teachers. See the picture accommodati below. on

Staff house at Busabala P/S Inadequate staff accommodation demoralises the teachers and thereby affect the academic performance of the pupils. In adequate The school was not fenced which poses a risk of trespass and theft from the security at neighbourhood. the School At the time of inspection on the 2nd of October 2018, a herd of over 100 cows was being grazed in the school compound. This may also lead to loss of land to land grabbers and or encroachment. i) ii) Bunamwaya C/U Primary school is a Government aided primary school located in Bunamwaya Division in Makindye Ssabagabo Municipal council. It has an enrolment of 801 pupils and 18 teachers Congestion in Contrary to the standard that requires a classroom ration of 1:55 Pupils; the the classroom - pupil ratio was 1:114. In P.3, classroom for 45 pupils was classrooms accommodating 132 pupils as per the picture below

Congested P.3. A 45 seater classroom accommodates 132 pupils

Congestion affects the learning process and impacts negatively on the academic performance of the pupils.

In adequate a) Security at the school School The school had an incomplete fence yet it is located in a town which poses security security risks to the pupils and workers at the school.

Incomplete fence at Bunamyaya P/S Lack of a fence may also lead to loss of land to encroachers and or land grabbers In adequate The school accommodates only 6 teachers in the school out of the 18 teachers. The Staff quarters building that houses the 6 teachers was meant for 3 teachers. Besides the structure is in a sorry state and should urgently be considered for renovation. See the pictures below:

Staff house in a bad state

Poor welfare of teachers affects their teaching.

The stated shortcomings affect the learning environment and impacts negatively on the academic performance of the pupils and welfare of the teachers.

The Accounting Officer explained that the Municipal Council was addressing the challenges of classrooms after which Staff accommodation would be catered for while following up the matters with Ministry of Education for support.

I await the outcome of the Accounting Officers efforts.

John F.S. Muwanga AUDITOR GENERAL 20th December, 2018

APPENDICES

Appendix 1: Budget performance for Uganda Road Fund (URF)

Planned Actual Management No output/ Road Section Variance Planned Actual cost explanation during the Audit . Activity length, (km) output (output) cost(Budget) (UGX) Variance (UGX.) audit Remarks. Routine manual A maintenance The road was in a poor state and had a lengthy scope which involved filling of gullies during the rainy No approved season that made the scope of cost higher than the works availed Star- Lwezza 6 6 - 5,750,000 11,000,000 (5,250,000) budgeted for audit The road had huge Unimplemente gullies so we d works of Kikajjo -Namasuba 3 1 2 1,500,000 1,500,000 - concentrated on 1km 2kms

Lubugumu lubowa 2 2 - 5,500,000 5,500,000 -

Ndejje -Zanna 2 2 - 2,000,000 2,000,000 -

Gangu -Kabuma kibiri 3 3 - 2,700,000 2,700,000 - Mirimu -Zanta sempal road 2 2 - 4,100,000 4,100,000 -

Batefu Kanala road 2 3 (1) 3,800,000 3,200,000 600,000 No emergencies Mutundwe - Kisgula 2 5 (3) 3,800,000 7,900,000 (4,100,000) Emergency works noted

No approved scope of st. noar Seguku, mirimu Increased scope of works availed bongole kanaba 3 6 (4) 2,200,000 5,000,000 (2,800,000) work for audit

Total 24 29 (6) 31,350,000 42,900,000 (10,841,900)

Routine mechanized B maintenance Unbudgeted for road works, The extra funds were part of the increment Star- Lwezza - 6 (6) - 9,000,000 9,000,000 Emergency works from URF No approved scope of Mutundwe-Kisigula - The scope increased works availed Bunmwaya 2 5 (3) 12,417,000 64,327,200 (51,910,200) from 2km to 5km for audit

Total 2 11 (9) 12,417,000 73,327,200 (60,910,200) C Periodic maintenance Sempala - Kassambalyanda 1.2 1.2 - 27,000,000 27,000,000 - No approved scope of Increased scope of works availed Municipal Gangu swamp 1.8 1.8 - 48,000,000 52,000,000 4,000,000 works for audit

Total 3 3 - 75,000,000 79,000,000 4,000,000

Grand Total 29 43 (15) 118,767,000 195,227,200 (76,460,200)

Appendix 2: Existence and Status of Medical Equipment

A. THEATRE SN NAME OF EQUIPMENT Required QUANTITY USE/PURPOSE Available CONDITION REMARKS Quantity C/s sets (caesarean sets) 5 For C-Section operations 3 Good 2 more needed Oxygen cylinders (large size) 3 For administration of Oxygen 0 3 needed D&C sets 3 Used for dilatation and curettage 2 1 needed MVA 3 For manual volume aspiration 0 3 needed Ambu bag Penguin sucker 2 Helps in clearing the babies airway 1 1 needed Nasal oxygen prongs 10 Used to deliver supplementary oxygen 2 8 needed Pulse oximeter 2 Non-invasive method for monitoring oxygen levels 1 1 needed Suction machine Boyle’s machine bp calf 5 For administering anaesthesia 1 Not in use because of lack of big oxygen cylinder Oxygen concentrator 10 For administering oxygen 2 8 needed Portable operating light 2 Provide light during operations 1 Not functioning 2 needed. Blood pressure machines[bp] 2 Measuring pressure 1 1 needed Autoclave Steam steriliser 1 Sterilising medical equipment to get rid of bacteria 0 1 needed. and other pathogens

B. OPHTHALMIC DEPARTMENT Slit lamp 1 Used for examining the interior of the eye 0 1 needed Tonometer 2 Used to determine the intraocular pressure 1 1 needed Ophthalmoscope 2 Majorly for the inspection of the retina 1 1 needed Refraction set 2 Used in reflection and refraction demonstrations 1 1 needed Lid rotation set 2 For examining and surgery of the eye 1 1 needed Loop (with lights and battery) 3 Used in eye surgery 1 Not good 2 needed

C. MATERNITY DEPARTMENT

Delivery sets 5 For the delivery of new born 4 Less by 1 Blood pressure machines[bp] 5 Measuring blood pressure 3 Less by 2 Doppler (hand held) 1 Used in determining the blood flow 0 Less by 1 Fetoscopes 10 Allow access to the foetus 2 Less by 8

MVA sets (manual vacuum For manual volume aspiration 3 2 aspiration sets) Ultra sound scan machine (basic) Used for scanning 0 Patients are referred to other 1 for obstetrics facilities Penguine sucker 5 Used for aspiration or cleaning of mucus 3 2 Needed Ambubag

1. Adult 2 Used to provide positive pressure ventilation 0 2 Needed 2. Neonatal 3 Used to provide positive pressure ventilation 2 1 Needed Autoclave

Implant removal set 2 For removing in-plants 3

D. LABORATORY DEPARTMENT

Keep reagents below room temperature 0 Use the one for blood Refrigerator for reagents 1 I needed Microscopes 2 For microscopic examination of samples 2 1 is not functional 1 needed Electric centrifuges (bench top) 5 Separation of fluids from densities 1 4 Needed For sterilization 0 Uses Jik to soak the Autoclave (in wash up) 1 plastic and glassware. 1 Needed. For drying slides 0 Use natural light to Bunsen burner 1 dry. I needed Colorimeter 1 Measuring the intensity of colour 0 1 needed Haematology analyser (CBC) 1 Complete blood count machine 0 1 needed Chemistry analyser 1 For determination of the concentration of analyses 0 1 needed

Appendix 3: Lack of Contract Implementation Plans and Management Reports

Procurement Ref. no. contract Provider Amount Remarks Msmc780/Wrks/17- 87,674,290 -No contract implementation plan and contract Construction of a 2 classroom block 18/00011 Pollar Allied Services Co. management report. with an office at Busabala P/S ltd Construction of a (2) block at 87,417,232 -No contract implementation plan and contract Msmc780/Wrks/17- Bunamwaya C/U P/S Sky light General management plan. 18/00012 Services -No contract implementation plan and contract management plan. Msmc780/Svrcs/17- 18/000006 42,000,000 Filling of Municipal-Gangu swamp B.S General services Ltd -No contract implementation plan and contract management report.

Msmc780/Svrcs/17-

18/000009

Opening of Kiziba road(1.5km) J.E.S.& E Technical 40,120,000 Framework contract services -No contract implementation plan and contract management plan. Msmc780/Svrcs/17- 18/000008 Periodic maintenance of Mirembe- J.E.S & E TECHNICAL 39,560,000 Mutundwe road(2.0km) SERVICES -No contract implementation plan and contract Msmc780/Svrcs/17- 14,120,000 management plan. 18/000011 Installation of culverts on Aiden road B.S General services ltd

-No contract implementation plan and contract Msmc780/Svrcs/17- Spot improvement and installation of management report. 18/000022 culverts on Kasamba Lyanda & 65,643,000 Mirimu Gangu road B.S General services ltd -No contract implementation plan and contract management plan.

MSCM780/Supls/17- Opening of Namata road(1.5km) 43,518,000 18/00010 Framework contract B.S General services ltd 48,852,000 -No contract implementation plan and contract MSMC780/WRKS/17- Opening and widening of Nsalo road J.E.S & E TECHNICAL management plan. 18/00015 (1.5km) SERVICES -No contract implementation plan and contract MSMC780/WRKS/17- Opening and widening of Kibutika J.E.S & E TECHNICAL management report. 18/00007 road (1.5km) SERVICES 57,890,000 983,807,300 -No contract implementation plan and contract MSMC 780/WRKS/2017- Upgrading Municipal road to Bitumen AL-MUBARAK management plan. 2018/00001 standard CONTRACTING Ltd CROSS-LAND 45,986,400 -No contract implementation plan and contract MSMC 780/WRKS/2017- Construction of a 10 stance VIP Construction company management plan. 2018/00013 latrine at Namasuba UMEA ltd 257,685,227 -No implementation plan and contract MSMC 780/WRKS/2016- Infracon infrastructure management reports(GCC 27.1 2017/00021 Construction of boundary wall construction Total 1,814,273,449

Appendix 4: Under Realization of Capitation Grants

CAPITATION VARIANCE ENROLMENT BUDGET AMOUNT ACTUAL RELEASE GRANT PER AMOUNT EXPECTED SCHOOL 2017/2018 2017/2018 2017/2018 PUPIL 2017/2018 St.Theresa Bunamwaya 4,140,000 -1,743,036 P/S 414 4,997,000 5,883,036 10,000 10,000 8,070,000 1,774,132 Bunamwaya C/U P/S 807 4,654,000 6,295,868 10,000 3,310,000 16,993 Nyanama Muslim P/S 331 4,066,000 3,293,007 10,000 2,400,000 20,280 Busabala P/S 240 2,908,000 2,379,720 10,000 6,270,000 870,000 Kibiri C/U P/S 627 3,338,000 5,400,000 10,000 4,490,000 -1,956,706 St.Kizito Kibiri P/S 449 6,790,000 6,446,706 10,000 6,840,000 1,278,042 Masajja UMEA P/S 684 4,668,000 5,561,958 10,000 8,760,000 2,862,693 St.Pius Masajja P/S 876 5,550,000 5,897,307 10,000 10,780,000 4,347,565 Namasuba UMEA P/S 1,078 6,460,000 6,432,435 10,000 5,330,000 717,005 Kigo Lunnya P/S 533 3,737,000 4,612,995 10,000 5,930,000 1,245,656 Kigo Prisons P/S 593 4,640,000 4,684,344 10,000 3,410,000 759,149 Mutungo Kitiko P/S 341 3,361,000 2,650,851 10,000 3,830,000 822,395 St.Gyaviira Lweza P/S 383 2,645,000 3,007,605 10,000 8,810,000 1,314,440 Lubugumu UMEA P/S 881 7,020,000 7,495,560 10,000 6,860,000 2,211,323 Andrew Ndejje P/S 686 5,365,000 4,648,677 10,000 5,760,000 198,663 Seguku Primary School 576 4,654,000 5,561,337

94,990,000 14,738,594 Total 9,499 74,853,000 80,251,406 10,000