The Republic of Uganda Report of the Auditor
Total Page：16
File Type：pdf, Size：1020Kb
THE REPUBLIC OF UGANDA REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF UGANDA AIR CARGO CORPORATION FOR THE FINANCIAL YEAR ENDED 30TH JUNE 2016 OFFICE OF THE AUDITOR GENERAL UGANDA TABLE OF CONTENTS LIST OF ACROYNMS ...................................................................................................... iii 1.0 INTRODUCTION .................................................................................................. 1 2.0 BACKGROUND INFORMATION .............................................................................. 1 3.0 ENTITY FINANCING ............................................................................................ 1 4.0 OBJECTIVES ....................................................................................................... 2 5.0 AUDIT OBJECTIVES ............................................................................................. 2 6.0 AUDIT PROCEDURES PERFORMED ....................................................................... 2 7.0 CATEGORIZATION AND SUMMARY OF FINDINGS .................................................. 3 7.1 Categorization of findings .................................................................................... 3 7.2 Summary of Findings ........................................................................................... 3 8.0 DETAILED FINDINGS ........................................................................................... 4 8.1 Failure to disclose value of Land ........................................................................... 4 8.2 Afrik Aviation ...................................................................................................... 4 8.3 Staff Salaries Payable .......................................................................................... 4 8.4 Outstanding PAYE ............................................................................................... 5 8.5 Outstanding NSSF ............................................................................................... 5 8.6 Grounded Aircraft - C130- 5X-UDF ........................................................................ 6 8.7 Returned Air Crafts (Y12s) ................................................................................... 6 ii LIST OF ACROYNMS UACC Uganda Air cargo corporation MoFPED Ministry of Finance Planning and Economic Development MOD Ministry Of Finance AOC Air Operators Certificate UGX Uganda Shillings USD United State Dollars BOU Bank of Uganda NSSF National Social Security Fund TAI Treasury Accounting Instruction VAT Value Added Tax WHT Withholding Tax CAA Civil Aviation Authority PFMA Public Finance Management Act, 2016 iii REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF UGANDA AIR CARGO CORPORATION FOR THE YEAR ENDED 30TH JUNE, 2016 THE RT. HON. SPEAKER OF PARLIAMENT I have audited the financial statements of Uganda Air Cargo Corporation for the year ended 30th June 2016. These financial statements comprise of the statement of financial position, the statement of financial performance, and cash flow statement together with other accompanying statements, notes and accounting policies. Management Responsibility for the financial statements The Directors are responsible for the preparation and fair presentation of the financial statements of Uganda Air Cargo Corporation in accordance with International Financial Reporting Standards and the requirements of the Corporation’s Act (Cap 322) and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error. Auditor’s Responsibility My responsibility as required by Article 163 of the Constitution of the Republic of Uganda, 1995 (as amended) and Sections 13 and 19 of the National Audit Act, 2008 is to audit and express an opinion on these statements based on my audit. I conducted the audit in accordance with International Standards on Auditing. Those standards require that I comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing audit procedures to obtain evidence about the amounts and disclosures in the financial statements as well as evidence supporting compliance with relevant laws and regulations. The procedures selected depend on the Auditor’s judgment including the assessment of risks of material misstatement of financial statements whether due to fraud or error. In making those risk assessments, the Auditor considers internal control relevant to the entity’s preparation and fair presentation of financial statements in order to design audit procedures that are appropriate in the circumstances but not for purposes of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the iv reasonableness of accounting estimates made by management as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Part “A” of this report sets out my opinion on the financial statements. Part “B” which forms an integral part of this report presents in detail all the significant audit findings made during the audit which have been brought to the attention of management and form part of my Annual Report to Parliament. PART “A” Opinion In my opinion, the financial statements present fairly, in all material respects, the financial position of Uganda Air Cargo Corporation as at 30th June, 2016 and its financial performance and cash flows for the year then ended, in accordance with the International Financial Reporting Standards and comply with the requirements of the Uganda Air Cargo Corporation Act. Report on other legal requirements As required by the Uganda Air Cargo Act (Cap 322) and the National Audit Act, 2008; I report to you, based on my audit, that: i. I have obtained all the information and explanations, which to the best of my knowledge and belief were necessary for the purpose of my audit. ii. In my opinion, proper books of account have been kept by the Company, so far as appears from my examination of those books; and iii. The statement of financial position and statement of financial performance are in agreement with the books of account. John F.S. Muwanga AUDITOR GENERAL KAMPALA 20th December, 2016 v REPORT OF THE AUDITOR GENERAL AND SUPPLEMENTARY INFORMATION PART "B" DETAILED REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF UGANDA AIR CARGO CORPORATION FOR THE YEAR ENDED 30TH JUNE, 2016 This Section outlines the detailed introduction, background information, entity financing, audit findings, management responses, and my recommendations in respect thereof. 1.0 INTRODUCTION In accordance with Article 163(3) of the Constitution of the Republic of Uganda, 1995 (as amended) and Section 16(2) of Uganda Air Cargo Corporation Act, I am required to audit and report on the public accounts of Uganda that is to say, all public offices including the courts, the central and the local government administrations, universities and public institutions of the like nature and any public corporation or other bodies or organizations established by an Act of Parliament. Section 16(2) of Uganda Air Cargo Corporation Act further mandates me to specifically carry out audits the Corporation. Accordingly, I carried out the audit of the above Corporation to enable me report to the Minister, the Board and Parliament. 2.0 BACKGROUND INFORMATION Uganda Air Cargo Corporation (UACC) was created by the UACC Act (Cap 322) in 1994 with the mandate to establish and operate air transport services within and outside Uganda. UACC is expected to operate commercially and be sustainable. UACC is a Government of Uganda statutory corporation, registered as a limited liability company under the Companies Act, 1994. UACC is classified under category (ii) of the PERD Statute, which means that the Government of Uganda intends to maintain majority ownership of the Corporation. The Corporation’s main offices are located at Entebbe International Airport, Terminal Building. It also has a ticketing office at Colline House in Kampala. The Corporation’s vision is “The preferred Airline”, and its mission is “To provide safe, reliable, efficient cargo freight, passenger freight and travel services at competitive rates”. 3.0 ENTITY FINANCING UACC offers air cargo freight, air passenger charters, medical evacuations, VIP charters, fun flights, businesss charters and humanitarian/relief flights. During the year, UACC generated a total income of UGX.28,894,706,200 from the services rendered and spent UGX.27,781,713,694. 1 4.0 OBJECTIVES The main objective of the corporation is to establish, provide, develop and operate safe, efficient, adequate economical and properly coordinated air transport services. 5.0 AUDIT OBJECTIVES The audit was carried out in accordance with International Standards on Auditing and accordingly included a review of the accounting records and agreed procedures as was considered necessary. In conducting my reviews, special attention was paid to establish whether:- a. The financial statements have been prepared in accordance with consistently applied Accounting Policies and fairly present the revenues and expenditures for the period and of the financial