District financial scandal: CAOs fail to give accountability
Apr 23, 2008
Districts are in the spotlight over failure to account for billions of public funds entrusted to them. For the past few weeks, many chief administrative officers (CAOs), who are the district accounting officers, have been having a rough ride before the Parliamentary Local Government Accounts Committ
By Joshua Kato and Paul Kiwuuwa
Districts are in the spotlight over failure to account for billions of public funds entrusted to them. For the past few weeks, many chief administrative officers (CAOs), who are the district accounting officers, have been having a rough ride before the Parliamentary Local Government Accounts Committee. While districts cry foul over underfunding, the committee, headed by Geoffrey Ekanya (Tororo), has discovered that even the little they get is not properly accounted for.
Districts are supposed to submit accountability of both the central government grants and locally collected revenue to the Auditor General (AG). The AG scrutinises the submissions and makes a report to Parliament, which then invites districts with queries to appear before the committee. The missing funds are classified as ‘unaccounted for funds’ and ‘doubtful expenditures’. The funds are mostly spent on advances to staff, unauthorised expenditure, double payment to officials and excess expenditure. On average, the central government remits at least sh1.1 trillion per year to the districts, which also collect at least sh100b in local revenue.
“There is persistent breaking of the financial regulations and procedures in the Local Government Financial Regulations, the Local Government Act and the Public Assets Act,†Ekanya observed.
Advances trap
According to the AG reports, although there are set rules, district staff claim advances without filling out the necessary vouchers. Recovering this money becomes a problem.
“Due to this laxity, substantial amounts of advances are likely to translate into a financial loss to the council,†one of the Auditor General’s reports for Kyenjojo district reads.
In the districts under review, Nakasongola had sh61m, Kabarole sh788m, Kyenjojo sh458m and Moyo over sh313m in advances.
But according to the CAOs, there are several factors that hinder recovery of these funds. In Nakasongola district for example, some of the employees who had taken advances were moved. “The outstanding balance of sh8,074,520 is from workers who have left Nakasongola District Local Government,†says the Nakasongola CAO, Philemon Mubiru.
According to public service regulations, a person’s salary cannot be deducted without his or her consent, or a court order. The CAOs say this is why they are contacting the Police to help them recover these funds.
For staff who die, the advances are written off, after authorisation from the district council. For those who are retrenched, the advances are recovered from their pension and gratuity packages.
In Kabarole district, when Kamwenge and Kyenjojo were carved out a few years ago, several staff who had taken advances relocated to the two new districts.
“I have written to the CAOs of Kamwenge and Kyenjojo districts, requesting them to remit all the money deducted from salaries for the staff who were posted there,†says the Kabarole CAO, Solomon Kalibwayi Musoke. Kabarole has also enlisted the Police’s help.
Diversion, overpayment and excess expenditure
In many cases, funds are diverted without the authorisation of the council. Between 2001 and 2005, Moyo had sh587m as excess expenditure and Nakasongola, spent sh441m on unauthorised projects. In Kabarole district, the Auditor General queried sh34m paid to M/S Muka Drilling Services, intended for drilling boreholes in Burahya County. The boreholes were never constructed. Still in Kabarole, a maternity ward that was supposed to be constructed at sh4.5m had the figures inflated to sh40m. Musoke says the matter was reported to the Police.
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Some districts that failed to give accountability
Apac — sh8b between 2001 and 2005
Moyo — sh3.1b between 2001 and 2005
Kabarole — sh14b between 2001 and 2005
Ssembabule — sh66m between 2001 and 2004
Nebbi — sh975m between 2001 and 2005
Kisoro — sh1.5b between 2001 and 2005
Nakasongola — sh660m between 2001 and 2005
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Kyenjojo district had over sh625m in excess expenditure.
“There are no invoices, building quotations, tenders for bidders for sh68m spent on construction of the administration office and a borehole,†MP Beatrice Rwakimari says.
Sh93m, allegedly used to purchase a second-hand pick-up truck in 2002 could not be properly accounted for.
Local revenue shortfalls
Almost all districts record local revenue shortfalls of over 50%. Nakasongola expected to collect at least sh825m in the financial year 2003/04, but only collected sh471m (about 57% of the expected total).
For the 2001/02 financial year, Moyo expected to collect sh353m, but only sh199m was collected, translating into a shortfall of sh153m. The CAO, Julius Peter Odongkara, says: “There were political factors which led to the revision of the tax structure three times during the financial year, hence late enumeration and assessment of graduated tax payers, laxity in revenue mobilisation, poverty and a narrow revenue base.â€
In Kabarole, it had been projected that sh1.1b would be collected, but only sh365m was realised, indicating a shortfall of sh799m. The CAO says this was due to several reasons, including political interventions and over estimation.
Change of CAOs
In the current Nakasongola case, all these unaccounted for funds were disbursed by a former CAO. However, Parliament grilled Mubiru, threatening him with court action if he failed to account for the funds.
In the case of Nebbi district, Joseph Balisanyuka, the CAO, said: “I had not been posted to Nebbi in 2003 when these things were done.
In Kampala, the town clerk, Ruth Kijjambu, was temporarily arrested over unaccounted for funds accrued during the reign of her predecessor, James Ssegane.
New CAOs, though responsible for accountability, may not be liable before the law to answer cases committed by previous CAOs, even if the former CAO handed over the files to them. However, MPs argue that when one is appointed to public office, he or she takes over the liabilities and assets of that office.
Districts are in the spotlight over failure to account for billions of public funds entrusted to them. For the past few weeks, many chief administrative officers (CAOs), who are the district accounting officers, have been having a rough ride before the Parliamentary Local Government Accounts Committee. While districts cry foul over underfunding, the committee, headed by Geoffrey Ekanya (Tororo), has discovered that even the little they get is not properly accounted for.
Districts are supposed to submit accountability of both the central government grants and locally collected revenue to the Auditor General (AG). The AG scrutinises the submissions and makes a report to Parliament, which then invites districts with queries to appear before the committee. The missing funds are classified as ‘unaccounted for funds’ and ‘doubtful expenditures’. The funds are mostly spent on advances to staff, unauthorised expenditure, double payment to officials and excess expenditure. On average, the central government remits at least sh1.1 trillion per year to the districts, which also collect at least sh100b in local revenue.
“There is persistent breaking of the financial regulations and procedures in the Local Government Financial Regulations, the Local Government Act and the Public Assets Act,†Ekanya observed.
Advances trap
According to the AG reports, although there are set rules, district staff claim advances without filling out the necessary vouchers. Recovering this money becomes a problem.
“Due to this laxity, substantial amounts of advances are likely to translate into a financial loss to the council,†one of the Auditor General’s reports for Kyenjojo district reads.
In the districts under review, Nakasongola had sh61m, Kabarole sh788m, Kyenjojo sh458m and Moyo over sh313m in advances.
But according to the CAOs, there are several factors that hinder recovery of these funds. In Nakasongola district for example, some of the employees who had taken advances were moved. “The outstanding balance of sh8,074,520 is from workers who have left Nakasongola District Local Government,†says the Nakasongola CAO, Philemon Mubiru.
According to public service regulations, a person’s salary cannot be deducted without his or her consent, or a court order. The CAOs say this is why they are contacting the Police to help them recover these funds.
For staff who die, the advances are written off, after authorisation from the district council. For those who are retrenched, the advances are recovered from their pension and gratuity packages.
In Kabarole district, when Kamwenge and Kyenjojo were carved out a few years ago, several staff who had taken advances relocated to the two new districts.
“I have written to the CAOs of Kamwenge and Kyenjojo districts, requesting them to remit all the money deducted from salaries for the staff who were posted there,†says the Kabarole CAO, Solomon Kalibwayi Musoke. Kabarole has also enlisted the Police’s help.
Diversion, overpayment and excess expenditure
In many cases, funds are diverted without the authorisation of the council. Between 2001 and 2005, Moyo had sh587m as excess expenditure and Nakasongola, spent sh441m on unauthorised projects. In Kabarole district, the Auditor General queried sh34m paid to M/S Muka Drilling Services, intended for drilling boreholes in Burahya County. The boreholes were never constructed. Still in Kabarole, a maternity ward that was supposed to be constructed at sh4.5m had the figures inflated to sh40m. Musoke says the matter was reported to the Police.
--------------------------------------
Some districts that failed to give accountability
Apac — sh8b between 2001 and 2005
Moyo — sh3.1b between 2001 and 2005
Kabarole — sh14b between 2001 and 2005
Ssembabule — sh66m between 2001 and 2004
Nebbi — sh975m between 2001 and 2005
Kisoro — sh1.5b between 2001 and 2005
Nakasongola — sh660m between 2001 and 2005
-------------------------------------
Kyenjojo district had over sh625m in excess expenditure.
“There are no invoices, building quotations, tenders for bidders for sh68m spent on construction of the administration office and a borehole,†MP Beatrice Rwakimari says.
Sh93m, allegedly used to purchase a second-hand pick-up truck in 2002 could not be properly accounted for.
Local revenue shortfalls
Almost all districts record local revenue shortfalls of over 50%. Nakasongola expected to collect at least sh825m in the financial year 2003/04, but only collected sh471m (about 57% of the expected total).
For the 2001/02 financial year, Moyo expected to collect sh353m, but only sh199m was collected, translating into a shortfall of sh153m. The CAO, Julius Peter Odongkara, says: “There were political factors which led to the revision of the tax structure three times during the financial year, hence late enumeration and assessment of graduated tax payers, laxity in revenue mobilisation, poverty and a narrow revenue base.â€
In Kabarole, it had been projected that sh1.1b would be collected, but only sh365m was realised, indicating a shortfall of sh799m. The CAO says this was due to several reasons, including political interventions and over estimation.
Change of CAOs
In the current Nakasongola case, all these unaccounted for funds were disbursed by a former CAO. However, Parliament grilled Mubiru, threatening him with court action if he failed to account for the funds.
In the case of Nebbi district, Joseph Balisanyuka, the CAO, said: “I had not been posted to Nebbi in 2003 when these things were done.
In Kampala, the town clerk, Ruth Kijjambu, was temporarily arrested over unaccounted for funds accrued during the reign of her predecessor, James Ssegane.
New CAOs, though responsible for accountability, may not be liable before the law to answer cases committed by previous CAOs, even if the former CAO handed over the files to them. However, MPs argue that when one is appointed to public office, he or she takes over the liabilities and assets of that office.