State House blows its budget by 176%

By Mary Karugaba

It is one of the sectors that receive the biggest portion of the national budget, but State House still spent above its original approved funds by 176%.

An audit report by the Auditor General has revealed that although State House was originally allocated sh64b, by the end of the financial year, it had spent sh173b.

The AG said the increment was financed by supplementary funding of sh108b, which means the approved budget did not reflect the true operations of State House.

The report pointed out that in some cases the original budgets approved by Parliament were exhausted in the first half of the financial year.

“It was noted that over the years, State House has continued to receive supplementaries annually. This impairs the credibility of the budget. Management should always draw up a realistic budget for State House, which reflects the true operations,” the AG said.

But management explained that the problem was due to Ministry of Finance’s ceiling, which was far below their estimates and “to bridge the gap, State House always seeks supplementary funding.”

The AG, Peter Nyombi noted that a total of 24 government entities incurred expenditure in excess of the approved budgetary provisions to the tune of sh115b.

He attributed this to weaknesses in controls over budgetary expenditures or utilization of revenues at source without authority.

He recommended that the excess expenditure should be investigated and any amounts in excess of the approved budget be regularized in accordance with the requirements of the Public Finance and Accountability Act, 2003.

Some of the agencies that spent beyond their budgets include Uganda National Roads Authority (sh102b), Uganda Mission at the United Nations, NY (sh2b), Uganda Heart Institute (sh849m), Mulago Hospital Complex (sh669m) and Uganda Embassy in France (sh706m).

‘Inaccuracies’

The audit also discovered that State House incurred outstanding commitments amounting to sh804m but they were never disclosed in the financial statements, making the payables balance understated by the amounts in question.

It was also observed that a commitment of sh1b was not supported with any documentation, making it impossible for the auditors to confirm the accuracy and completeness of the figure.

The AG also queried sh208m that was paid to a company for supply of 4,000 sand bags, Hesco Barriers plus insurance charges.

During the audit, it was established that although the terms of the contract required payment to be effected after 100% delivery of the items, only sand bags were confirmed delivered.

The Hesco Barriers were later on delivered on June 29, 2011 after the payment.

The AG warned that management should ensure that in future, advance payments are secured by a guarantee as stipulated in the PPDA Regulations 249 and 252 to mitigate the risk of loss.

State lodges without land titles

The Auditor General also noted that State House maintains a number of State lodges upcountry but they all have no land titles to confirm the ownership and acreage of the land they sit on.

“Without land titles there is a risk of losing part of the land of the State lodges to land encroachers,” he warned.