The Public Accounts Committees (PAC) have flagged concerns over discrepancies and omissions in financial reporting by the Auditor General of various entities.
These concerns were raised during a harmonisation meeting between the different Public Accounts Committees with officials from the Office of the Auditor General to address gaps identified in audit reports for the financial year ending June 30, 2023.
Chaired by Hon. Muhammad Muwanga Kivumbi, the Chairperson of PAC-Central and Hon. Henry Musasizi, the Minister of Finance, Planning and Economic Development (General Duties) on Tuesday, 20 November 2022, at Parliament, the meeting aimed to improve accountability and ensure transparency in government operations.
The Public Accounts Committees that attended the meeting included; Committee on Commission, Statutory Authorities and State Enterprises (COSASE), Public Accounts (Local Government), and Public Accounts (Central Government).
Hon. Muwanga Kivumbi in his remarks raised a concern on the lack of detailed reporting on the implementation of government activities stating that for instance under the Ministry of Lands, Housing, and Urban Development, the Auditor General assessed 10 outputs comprising 75 activities worth Shs11.03 billion but did not provide the total number of outputs planned or financial values for partially and unimplemented activities.
“Implementation of activities is where abuse and mismanagement is most pronounced, yet it is at the core of service delivery. This kind of reporting is suspicious as it makes consumers of the Auditor General’s reports have doubts on the intention of the auditors,” he stated.
Similar issues were noted in the Ministry of Education and Sports, where the Auditor General assessed 31 outputs involving 81 activities valued at Shs14.81 billion. Out of this, 18 outputs with 61 activities worth Shs10.81 billion were reported as partially implemented, but their corresponding financial values were not detailed.
The committee observed that this left activities worth Shs223.97 billion unaccounted for, raising serious concerns about the comprehensiveness of the audits.
Another major issue highlighted was insufficient sampling of expenditure. Under the Ministry of Education and Sports, for instance, only Shs14.81 billion, representing 4.6 percent of the Shs 322.4 billion utilised warrants (excluding wages) was assessed.
Hon. Muwanga Kivumbi explained that this limited sample size meant that Shs307.6 billion in expenditures went unassessed, making it difficult to draw meaningful conclusions. He urged the Auditor General to adopt the Pareto principle, which prioritises transactions accounting for 80 per cent of expenditure value, to improve representativeness and audit efficiency.
At the Ministry of Agriculture, Animal Industry, and Fisheries, the committee discovered that Shs107 billion had been paid as domestic arrears despite the expenditure not being budgeted.
Similarly, the education ministry was found to have diverted Shs17.5 billion from planned activities to settle domestic arrears, paying Shs28.5 billion instead of the Shs11 billion initially budgeted.
Responding to the concerns, the Auditor General, Edward Akol, defended the operations of his office emphasising the importance of understanding the full scope of the audit process. He explained that the methodology used in audits involves different types of reports; financial, value-for-money (VFM), and forensic, all serving distinct purposes.
“Each of these reports has an objective. The objective of a financial audit is about how accounts are prepared, not on performance,” Akol noted, urging the committee to consider all audit reports comprehensively to fully appreciate the work of his office.
He revealed that his office has produced over 200 VFM reports in the past 12 years, yet many have not been discussed. “We have invested significant resources into these reports. It takes about eight months to produce one, and last year alone, we produced 25,” he said.
Akol proposed a strategy to compile various audit types into combined reports for individual ministries, which would give a holistic view of their performance. “If we are looking at the Ministry of Health or Agriculture, you will see financial audits, VFM audits, IT audits, and others in one document,” he explained, highlighting this as a more effective way to assess performance.
He addressed concerns about sampling methods, acknowledging criticism about the percentage of sampled data in certain audits. “I have heard the dissatisfaction about sample sizes. It is important to align expectations with international standards,” he said, adding that his team regrets instances where sampling fell below expectations.
Akol also stressed the need for further dialogue on contentious issues, such as discrepancies in reported percentages, suggesting an independent review to resolve disagreements.
Hon. Timothy Batuwa, Jinja South Division West MP, questioned the validity of making sweeping conclusions based on limited sample sizes. “Would ministries feel comfortable with conclusions drawn from just 4.6 percent or 8 percent of their data?” he asked.
He also called for a commitment to addressing gaps identified in past audits. “What should we expect in the next financial year?” he inquired.
