Report of the Auditor General on the Financial Statements of National Drug Authority for Year Ended 30Th June, 2016

THE REPUBLIC OF UGANDA

REPORT OF THE AUDITOR GENERAL

ON THE FINANCIAL STATEMENTS OF NATIONAL DRUG AUTHORITY FOR THE YEAR ENDED 30TH JUNE 2016

OFFICE OF THE AUDITOR GENERAL

UGANDA

TABLE OF CONTENTS ACRONYMS ...... ii REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF NATIONAL DRUG AUTHORITY FOR YEAR ENDED 30TH JUNE, 2016 ...... 3 DETAILED REPORT OF THE AUDITOR GENERAL FOR THE FINANCIAL YEAR ENDED 2016 ...... 6 1.0 INTRODUCTION ...... 6 2.0 BACKGROUND INFORMATION ...... 6 3.0 FINANCING OF THE AUTHORITY ...... 6 4.0 MANDATE OF NDA ...... 6 5.0 AUDIT SCOPE ...... 7 6.0 PROCEDURES PERFORMED ...... 8 7.0 AUDIT FINDINGS ...... 9 8.0 DETAILED FINDINGS ...... 9

ACRONYMS

CNF Committee on National Formulary DADI’s District Assistant Drug Inspectors DAR Drug Assessment and Registration GMP Good Manufacturing Practices MoU Memorandum of Understanding NDA National Drug Authority NDPA National Drug Policy and Authority PAYE Pay As You Earn PPDA Public Procurement and Disposal of Public Assets QMS Quality Management Systems UGX Uganda Shillings WHO World Health Organisation

REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF NATIONAL DRUG AUTHORITY FOR YEAR ENDED 30TH JUNE, 2016

THE RT. HON. SPEAKER OF PARLIAMENT I have audited the financial statements of the National Drug Authority (NDA) for the year ended 30th June 2016. These financial statements comprise of the Statement of Financial Position, Statement of Comprehensive Income, Statement of Changes in Equity, and Statement of Cash Flows together with other accompanying statements, notes and accounting policies.

Management Responsibility for the Financial Statements In accordance with the National Drug Policy and Authority Act (Cap.206), the Authority is required to maintain such books of account and related records to enable the preparation of Financial Statements that present fairly the state of the Authority’s affairs.

The directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act (Cap 110). This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

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 express an opinion on the financial statements based on my audit. I conducted my audit in accordance with the International Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing audit procedures to obtain audit 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 the financial statements whether due to fraud

or error. In making those risk assessments, the Auditor considers internal controls 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 purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the 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 my 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.

PART "A"

Opinion In my opinion the financial statements present fairly in all material respects the financial position of the National Drug Authority as at 30th June 2016 and of its financial performance and cash flows for the year then ended in accordance with the International Financial Reporting Standards and the National Drug Policy and Authority Act (Cap 206).

Emphasis of Matter Without qualifying my opinion, I wish to draw your attention to Note 11 to the financial statements;  Pending Legal Cases National Drug Authority is involved in several pending law suits with claims amounting to UGX.113,599,025,876.

Though the cases are still pending before courts of law, their determination against National Drug Authority and hence payment of the estimated significant claims and damages could have a material impact on the ability of the Authority to continue as a going concern.

Report on Other Legal and Regulatory Requirements

As required by the National Drug Policy and Authority Act I report to you, based on my audit that, the business administration of the Authority has been conducted efficiently;

In accordance with Authority principles, and the auditing and accounting provisions of the Act, In accordance with its objectives, regulations and any other decision made by the Authority members.

John F. S. Muwanga AUDITOR GENERAL

18th December, 2016

PART “B”

DETAILED REPORT OF THE AUDITOR GENERAL FOR THE FINANCIAL YEAR ENDED 2016

This section outlines in detail the audit scope, audit findings, my recommendations and management responses in respect thereof.

1.0 INTRODUCTION I am mandated by Article 163 (3) of the Constitution of the Republic of Uganda, 1995 (as amended), to audit and report on the public accounts of Uganda and of all public offices including the courts, the central and 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. Accordingly, I appointed Shore Partners, Certified Public Accountants to audit the Authority on my behalf and report to me so that I report to Parliament.

2.0 BACKGROUND INFORMATION The NDA was set up by an Act of Parliament (Cap 206) in 1993 and is a corporate body fully owned by the Government of Uganda. NDA is charged with ensuring availability and promote use of safe, efficacious and good quality medicines for human and animal use.

3.0 FINANCING OF THE AUTHORITY The authority’s funds were mainly derived from the following sources; Internally Generated Funds of UGX.41,180,272,921; Rent from properties UGX.185,332,549; Donor Funds UGX.683,851,375 and income from investments UGX.323,841,200. Total entity financing for the year was therefore UGX 323,841,200.

4.0 MANDATE OF NDA NDA is mandated to carry out:- a) Assessment and registration of medicines for quality, safety and efficacy. b) Inspection, approval and/or licensing of local and foreign manufacturing sites for compliance with current Good Manufacturing Practices (GMP). c) Inspection and licensing of premises (drug outlets: Pharmacies and Drug Shops) in and through which medicines are stored or distributed to the public.

d) Licensing of medicines importers and processing applications for importation of medicines. e) Inspection of medicines at gazetted ports of entry. f) Testing of drugs for compliance to approved quality standards. g) Regulation of drug promotion and advertising through screening and monitoring medicines advertisements. h) Pharmacovilance (monitoring and assessing adverse drug reactions and taking appropriate regulatory action). i) Post marketing surveillance (surveillance of the formal and informal markets for compliance with drug regulations and guidelines and ensuring absence of substandard, expired and counterfeit medicines. j) Supervision of safe and environment friendly disposal of condemned, substandard, expired and counterfeit medicines. k) Regulation of drug related clinical trials.

5.0 AUDIT SCOPE I carried out the audit in accordance with International Standards on Auditing (ISA) 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 the following:- a) The financial statements have been prepared in accordance with International Financial Reporting Standards and the requirements of the Companies Act (Cap 110) and fairly present the Authority’s revenue and costs incurred for the year, in conformity with generally accepted accounting principles. b) To evaluate and obtain sufficient understanding of the internal control structure of the Authority, assess control risk and identify reportable conditions, including material internal control weaknesses. c) To perform tests to determine the extent of compliance with applicable laws and regulations. d) All the Authority funds have been used in accordance with the conditions of the relevant regulations and only for the purposes for which the financing was provided with due attention to economy and efficiency. Report on any matters pertaining to value for money.

e) Whether the goods and services financed had been procured in accordance with relevant procurement laws. f) Whether staff claims and payments were in line with their letters of appointment and if allowances of whatever nature are claimed against supporting documents. g) All necessary supporting documents, records and accounts have been kept in respect of all activities, and are in agreement with the financial statements presented.

6.0 PROCEDURES PERFORMED The following audit procedures were undertaken:- i. Reviewed Financial Statements as well as the Authority’s budget and expenditure reports. ii. Reviewed and evaluated the Authority’s internal control structure and its capability to properly identify and account for relevant expenditures. Ascertained whether procurements were made in accordance with relevant procurement regulations. iii. Reviewed Authority minutes, handbooks and other pertinent laws and regulations. iv. Audit steps and procedures to provide reasonable assurance of detecting errors, irregularities and illegal acts that could have a material direct or indirect effect on the financial statements amounts. v. Review records and other information relating to expenditures to determine whether they were allowable, properly allocated, reasonable, valid and accurate. Also ensured that necessary supporting documents, records and accounts were kept. vi. Reviewed existing procurement guidelines and assessed whether goods and services financed had been procured in accordance with them. vii. Reviewed staff records and letters of appointment to establish whether staff claims, allowances and payments were authorized and adequately supported. viii. Carried out necessary procedures to determine whether assets were used in the interest of the Authority. ix. Obtained specific written representations.

7.0 AUDIT FINDINGS 7.1 Categorization of Findings The following system of profiling of the audit findings has been adopted to better prioritise the implementation of audit recommendations. No Category Description 1 High Has a significant / material impact, has a high likelihood of reoccurrence, significance and in the opinion of the Auditor General, it requires urgent remedial action. It is a matter of high risk or high stakeholder interest. 2 Moderate Has a moderate impact, has a likelihood of reoccurrence, and in the significance opinion of the Auditor General, it requires remedial action. It is a matter of medium risk or moderate stakeholder interest. 3 Low Has a low impact, has a remote likelihood of reoccurrence, and in the significance opinion of the Auditor General, may not require much attention, though its remediation may add value to the entity. It is a matter of low risk or low stakeholder interest.

7.2 Summary of Findings No Title of finding Significance 1 Pending legal cases High 2 Noncompliance with the National Drug Policy and Authority Act Cap 206 High 3 Weaknesses in drug regulation at Border Points High 4 Release of drug consignments without NDA verification and approval High 5 Wrongful payment of Per Diem Moderate Absence of tenancy agreements and failure to enforce terms where 6 Moderate agreements exist Weaknesses in installation Works for the HVAC and Clean Rooms for 7 Moderate National Drug Authority Microbiology Laboratory 8 Credit Services with no Relevant Agreements Moderate 9 Management of the fixed deposit (investment) Moderate 10 Partially Accounted for Funds Moderate 11 Quarantine Areas for Goods Awaiting Release Moderate Collaboration with Uganda Revenue Authority on use of the Asycuda 12 Moderate system

8.0 DETAILED FINDINGS 8.1 Pending Legal Cases NDA is involved in several pending law suits with claims amounting to UGX.113,599,025,876. The outcomes are uncertain. Though still in court, their eventual determination against NDA could have a significant effect on the cashflows and ability of the Authority to continue as a going concern.

I advised management to ensure due diligence is undertaken in carrying out its work to safeguard against unfavourable court outcomes.

8.2 Non-compliance with the National Drug Policy and Authority Act Cap 206 NDA is mandated by the National Drug Policy and Authority Act (NDPA) specifically section 5 to regulate pharmacies to ensure that they comply with: trading license requirements, keeping records of expired drugs, having qualified staff, maintaining updated prescription books, and maintaining clean premises of operations among others. However, from my field visits of a sample of 51 pharmacies across the country, I noted that 42 had dusty or untidy premises, 26 had no temperature control mechanism in place, 14 did not display their licence at the premises and 6 had no prescription books among others.

The cases on non-compliance, mainly attributed to inadequate supervision and enforcement efforts by NDA, could result in pharmacies offering inappropriate, poor quality medicinal products to the public thereby exposing the public to health hazards. In their response, management acknowledged the observations and have been followed up by the respective regional offices. Management also attributed the non-compliance in the pharmacies to inadequate supervision by licensed in-charge pharmacists, a matter which had been taken up by the respective professional body, PSU.

To further improve regular inspection and sensitization, management is in the medium term (2016/2017) increasing the regional inspectors from two (2) to four (4) per region with a further gradual future scale up.

I await managements’ expeditious implementation of their proposal.

8.3 Weaknesses in drug regulation at Border Points Section 9 (2) of the National Drug Policy and Authority (Importation and Exportation of Drugs) Regulations, 2014 states that the Authority shall, on the arrival of the consignment of drugs at a port of entry into Uganda, inspect the drugs to confirm that the drugs comply with the approved specifications and that each batch is accompanied by a certificate of analysis. During the audit, I however noted that the entry points in Mirama hills, Katuna, Elegu and Oraba have no NDA officials to carry out the inspection.

There is a risk that inappropriate medical products could enter the country due to absence of NDA staff at these border points posing health dangers to the final consumers.

In response, Management explained that NDA has a good working relationship and understanding with the URA which ensures such illegal medicine consignments are detected, impounded and culprits dealt with accordingly. This collaboration has ensured over the past years that these ports of entry, though not directly manned by NDA, are constantly monitored for illegal importation and smuggling of medicines. I explained to management, that since URA staff are not technical, to consider deploying qualified inspectors of drugs at every port of entry to enhance its monitoring efforts.

8.4 Release of drug consignments without NDA verification and approval Contrary to regulations, I noted that some consignments of drugs entered the country without NDAs approval. Below is a list of some of the consignments from my sample where I was unable to obtain release letters by NDA from the ports of entry.

Table 1: consignments where I was unable to obtain release letters by NDA

importer Custom Invoice detail entry no number City Pharmacy C22935 50745 and Consignment of assorted medicines 56159 Clinical Research C24773 2001102849 Consignment of Glivec HGC 100 mg capsules Center (JCRC) (Imatinib). NDA verification certificate number 418/2016 and emergency/extraordinary permit ref: 151/UNREG/2016 dated 18th March 2016 had been issued by NDA; Techno Med Ltd, C24943 Consignment of unidentified cold storage items Techno Med Ltd C24933 Consignment imported darted 22/04/2016 on

There is a risk that inappropriate medicinal products could gain access to the country thereby pausing a health risk to the ultimate users.

Management acknowledged the observation and explained that the matter is currently under investigation. NDA is also in dialogue with the URA to reign in on errant clearing firms who connive with clients to illegally clear consignments without the involvement of the Authority. It is envisaged that the findings from this investigation once closed, will help identify gaps or areas for strengthening collaborative efforts with Uganda Revenue Authority with respect to the control of medicine importation into the country. 11

I await the results of the investigation.

8.5 Management of the fixed deposit (investment) Section 8 (1) of NDA investment policy states that NDA may fix funds with banks regulated and approved by the Central Bank of Uganda to take deposits. During the course of the audit, I noted that on 27th January 2016 the Board in its 57th meeting of the Drug Authority approved the proposal to place USD 5,260,000 (Five million two hundred sixty thousand united states dollars) on a fixed deposit account with Standard Chartered Bank at a rate of 3% (three percent) per annum. These are funds put aside by management for the construction of NDA towers. However, only two bankers were requested to quote interest rates for the fixed deposit. Correspondences seen indicate that only one bank replied to the request which resulted in limited competition in offering the service. Due to limited competition, the interest rates offered may have been lower than the open market could offer and thereby not maximizing value from the amount placed. In response, management explained that they complied in full to the Public Finance Management Act, 2015, by seeking for competitive quotations from the two banks who are the duly approved and authorized NDA Bankers.

I informed management that the Public Finance Management Act 2015 refers to opening of bank accounts for receiving or spending public funds. However, placing a fixed deposit is an investment that should be managed in line with the requirements of the investment policy which requires the market analysis before placing investments to include obtaining interest rates from banks licensed by the Central Bank. This provision therefore does not limit NDA to only banks where it holds bank accounts.

I advised management to always ensure competition in placement of deposits and other investments to maximize value from NDAs resources.

8.6 Collaboration with Uganda Revenue Authority on use of the Asycuda system During the course of the audit, I noted that NDA Nakawa entry port was enrolled on the Asycuda system of Uganda Revenue Authority as part of the strengthening efforts to curb down on the counterfeits. This is a commendable initiative by the two authorities envisaged to make monitoring of counterfeits more efficient. This initiative has however

not been rolled out to cover other entry ports of Entebbe, Busia and Malaba. In addition, there is inadequate staffing for inspections as highlighted in 8.2 above and a case of Busia and Malaba key entry points being manned by only one inspector.

I also noted that there is no memorandum of understanding signed between Uganda Revenue Authority and NDA regarding the initiative of integrating NDA inspection activities into the Asycuda system.

The absence of integration of NDA inspection work in Asycuda for all key border/entry points presents a risk of Uganda Revenue Authority clearing medicinal products that may otherwise not qualify with timely NDA inspection. In addition there is a risk of not having a point of reference in addressing any disputes that could arise as a result of the Asycuda integration initiative.

In response management explained that the ASYCUDA system is now operational in Nakawa, installed in Entebbe and Malaba. The NDA is in the process of recruitment of more officers to be deployed at designated ports of entry to improve the coverage of entry ports. The importance of an MOU with the URA is recognised and will be pursued by management.

I advised that NDA should also pursue to be enabled, through the Asycuda system, to monitor all the key border posts. This is envisaged to make NDAs inspection and monitoring activities more efficient.

8.7 Quarantine Areas for Goods Awaiting Release Section 17 of NDPA (Certificate of Suitability of Premises) Regulations, 2014 requires every ICD to have a separate and quarantine area for materials and products due for release. During the audit, I however noted that some ICDs, for example at Maina in Nakawa, have no such areas and verification shades are also lacking. This limits efficiency and effectiveness of the verification exercise.

There is a risk that counterfeits may not be detected during verification because of unconducive environment for verification.

Management acknowledged the observation and explained that it is being taken up with URA customs. 13

I advised management that the requirements for suitability of premises certificate should be observed before the certificate is issued to any client.

8.8 Absence of tenancy agreements and failure to enforce terms where agreements exist

The agreements between National Drug Authority and tenants occupying Nkrumah road property, state that rent for the term of tenancy shall be payable quarterly in advance. However this is not complied with and management has not taken any steps to enforce it. Furthermore, I noted that some tenants have no tenancy agreements as shown in the table below:

Table 2: Tenants without tenancy Agreement

S/No. Tenant Room Number 1 Starlite Electrical Services 14 2 Tula Property Consultants 17 3 Rwam’s (U) Ltd 18 4 Factual Solutions Ltd 10 5 Kenlord Finance Ltd 16 6 TTB Investments 23 7 TTB Investments 26 8 FS Stationers Ltd 11 9 Century Advocates 22

Failure to enforce payment terms in rental agreements exposes NDA to possible losses in rental revenue. Furthermore without signed agreements, enforcement of collection measures could be difficult and any disputes arising between the landlord, property manager and tenants may present serious challenges to resolve.

Management acknowledged the observations and promised to engage the property manager for enforcement of contractual terms.

I advised management to expedite enforcement of the property management terms and conditions stipulated in the rental. I also advised that cases where tenants have not signed agreements with NDA should be promptly addressed to ensure terms and conditions applicable to each party are known and formally agreed to.

8.9 Weaknesses in installation Works for the HVAC and Clean Rooms for National Drug Authority Microbiology Laboratory During the course of the audit, I noted that NDA halted the above project which was in the final stages of completion in the month of June 2015. I further noted that the resumption of the project is to cost NDA more funds amounting to USD 50,625 for materials that expired during the period the project has been on halt. This cost excludes air tickets for the technicians from India and other expenses that will be incurred to resume and complete the project. By the time the project was halted, NDA had invested a total of UGX.3,364,881,335 in the project. An additional amount of UGX.29,642,120 was attributed to the project during the year ended 30 June 2016. No value for money is being derived from this amount already invested in the project.

The inconsistencies exhibited in the implementation of the laboratory project will cost the Authority more funds that could have been avoided.

In response management explained that the project was halted by the Authority as they sought to appraise and review status and management of the project and review gaps in the project implementation that included among others:

a. Inflating and increasing costs that were in excess of the contract sum signed; b. Lack of milestones defined to deliver critical project timelines that left the project duration open ended; c. No provisions in the contract to address commissioning and installation of the HVAC; d. Conflict of interest in the award of the contract as the successful bidder was already on site prior to bid award.

It was further explained that the project was resumed on 12th September 2016 with a Contract Management Team in place to oversee project implementation and salvage the project in view of the investments already made.

There was however no evidence to show that works on the project have resumed. There is thus a possibility of incurring even more expenditure as a result of continued delay in project execution.

I advised NDA management to devise a swift mechanism to complete the project to salvage value from significant amounts already spent on the project. Going forward, such strategic projects should only be undertaken following a proper project implementation plan with clear milestones, benefits and clearly assigned responsibility for overall project accountability.

8.10 Credit Services with no Relevant Agreements Section 2 (4) of the National Drug Policy and Authority (Fees) Regulations, 2014 states that an application shall not be received by the Authority in respect of which the prescribed fees is not paid.

However I noted that NDA provides credit services to some clients e.g. Ministry of health, Global fund, Medical access, among others, without agreements to guide on management of credit services. NDA risks losing revenue in respect of credit services extended to these clients. This can negatively affect smooth running of NDA operations. Management explained that they have engaged the Ministry of Health, the principal recipient of the Credit service for clearance of outstanding dues who have indicated that they are only able to pay upon verification of Invoice and service delivery.

I advised management to avoid offering credit in line with the regulations or else consider amending the regulations in cases where cash payments may not be feasible. 8.11 Partially Accounted for Funds Review of the expenditure revealed that UGX.44,516,339 spent on fuel (UGX.32,524,766) and rent (UGX.11,991,573) was not properly supported. Out of the fuel expenses UGX.5,877,485 was purportedly spent on car washing, parking fees and service fees which were not authenticated. All rental payments were not supported with tenancy agreements.

Unsupported expenditure raises doubt as to whether the funds were applied to intended purposes.

In response, management explained that it signed a fuel card contract with VIVO Energy Uganda with provision for accessing VIVO products (fuel, Car Wash and Car Servicing) at VIVO designated stations in 2013. The services have thus been utilized to fuel and Service NDA vehicles at designated VIVO Service Stations. It was also explained that 16

management is to further stream-line this service agreement to provide separate cards for fuel and Car Servicing.

I advised management that expenditure should be incurred in an economical, efficient and effective manner and that Management should ensure that unaccounted for funds are refunded by the responsible officers. The rental agreements should also be availed.

8.12 Wrongful payment of Per Diem Section 14.8.17.1 of the human resource manual states that local and foreign per diem shall be provided to an employee undertaking official assignments to cater for meals, accommodation and incidentals as per NDA rates. From the review of vehicle logbooks, I noted that upcountry staffs are paid per diem even when they are to go for official work and come back to the work station on the same day. An amount of UGX.27,105,000 was paid wrongfully to staff.

This leads to loss of funds of the Authority.

Management agreed to the observation and promised to implement the recovery.

I have requested management to expedite the recovery.

8.13 Review of status of previous year findings The following audit issues contained in my previous report were not fully addressed by management as indicated below;

Observation Recommendatio Current Status (fully Management response n implemented/partiall y implemented/not implemented 1 Potential Conflict NDA should liaise Not Implemented Management under the of Interest with the guidance of the Ministry of I noted potential responsible Health has been working conflict of interest on authorities to have closely with the First NDA board as it is the NDPA amended Parliamentary Counsel on the composed of some as a matter of Draft National Food and Drug members who are urgency. Authority Bill 2016 which practicing among others addresses the pharmacists. composition and size of the Authority. The draft bill is expected to hand over to the Minister of Health for submission to cabinet in November 2016.

2 Establishment of The Authority Not Implemented Management under the guidance of National Food and should liaise with the Ministry of Health has been Medicines the Minister to working closely with the First Authority have the act Parliamentary Counsel on the Draft There is a risk of amended to ensure National Food and Drug Authority Bill delaying important that important 2016 which among others addresses reforms particularly reforms are the composition and size of the on food and food enacted Authority. The draft bill is expected supplements which to hand over to the Minister of are not regulated Health for submission to cabinet in which may have November 2016. adverse effects on the population. 3 Litigation Cases Management All the cases are still All cases are in the High Court I noted that NDA was should ensure due pending pending resolution. involved in a number diligence is always of litigation cases. undertaken in The outcomes and/or carrying out its amounts of the work in order to obligations could not have higher be measured with chances of sufficient reliability. obtaining Due to this limitation, favourable court their impact on the outcomes financial statements could not be established. The outstanding cases include the following;  Mavid Pharmaceuticals Ld vs. NDA and 2 others, Civil suit No. 383 of 2010, Amount involved 3,082,895,000  NDA vs. Samuel Kasozi and 2 others High Court Civil Suit No. 148 of 2009, Amount involved 398,130,876  Dr. Livingstone Kityo Semakula and others vs. NDA and Jeffery, Amount involved 118,000,000  Signa- Chemie Enterprises (U) Ltd & 519 others vs. NDA, Amount involved 110,000,000,000 4 Committee on The Drug Authority Not Implemented The 60th Ordinary Authority meeting Essential Drugs should consider Appointed Mr.Seru Morries as I noted that the appraising the work Chairman to the Essential drugs committee is housed of the committee Committee as well as approved The at Ministry of Health terms of Reference of the and does not report Committee on 27th July 2016. The to NDA board as I Committee shall commence work was unable to see with the New Authority in December any report from the 2016 committee. 6 Salary advances All advances should Not Implemented For All staff, advances are I noted a staff be recovered to recoverable from member who was minimize financial Their terminal dues comprising of dismissed during the loss. Management final pay cheque and Gratuity year but the salary should explore entitlement Which is processed

advance was not fully avenues of against clearance from NDA. Mr. recovered recovering all Sematiko has Never cleared to-date advances not Neither has NDA paid out his recovered for staff terminal Dues. The outstanding that left the entity. advances shall be Recovered from his Terminal pay upon Clearance with NDA 7 Understaffing NDA should This is contained in the new revised I noted that the consider recruiting organogram which has a clear quality management more staff in the outline of the staff establishment. and drug registration above departments Currently management is working on departments are a recruitment plan to cater for all the understaffed created positions.

FINANCIAL STATEMENTS