MDAs fail to account for shs 2 trillion Covid-19 funds

The Auditor-General has unearthed mismanagement of shs 1.97 trillion Shillings appropriated by Parliament to manage the COVID-19 pandemic.

These funds were disbursed to Ministries, Departments and Agencies-MDAs under the Emyooga programme, Microfinance Support Centre, Uganda Development Bank (UDB), and Uganda Development Corporation (UDC), among others.

According to the Auditor-General, John Muwanga various stakeholders increased their call to strengthen accountability in the wake of the pandemic triggering special audits and investigations relating to COVID-19 expenditure.

He was presenting the audit report for the financial year 2020/2021 to Deputy Speaker of Parliament Anita Among on Wednesday.

He, however, believes that follow up and recommendations in his report will facilitate improvement in public accountability and service delivery.

According to the audit report, shs 4.89 billion out of the shs 676 billion disbursed to various MDAs to settle domestic arrears was diverted to pay for unrelated expenditure.

Payment of domestic areas was intended to improve liquidity within the local business community.

Edward Akol, the Acting Assistant Auditor General in charge of Audits says that there was also unsupported domestic arrears worth shs 27.38 billion, payment of shs1.24 billion for rejected domestic arrears and shs 33.8 billion used to settle international obligations.

The Auditor-General also reported diversion of shs 7.98 billion out of the shs 253.5 billion released to the Ministry of Health to among others procure medical supplies, 282 motor vehicles, payment of allowances to medical workers, masks, intensive care equipment and building modular houses at 6 border points.

“Although funds were paid for the acquisition of vaccines, there were delays in the delivery of the vaccines due to the global demand. There was a delay in the installation of intensive care equipment in Gulu, Mbarara, Bombo due to building inadequacies,” reads part of the audit report.

Muwanga also reported that whereas medical workers requested to be paid shs150,000 per day as risk allowance, they were instead paid shs 80,000 per day.

The Auditor-General also reveals that Shs 2.2 billion meant for Pay As You Earn –PAYE was not deducted from the allowances paid to medical workers.

Emyooga Programme shs260 billion

The Auditor-General queries the utilization of the shs 260 billion allocated for the Emyooga programme through the Microfinance Support Centre with a goal of transforming household incomes by increasing employment opportunities and access to financial services to the rural areas.

Muwanga reports that Shs 219.4 billion (84 percent) at the time of audit, had so far been disbursed to 6,326 Emyooga Saving and Credit Cooperative Organizations (SACCOs) but these SACCOs were in the process of obtaining operational licenses.

‘No MoUs had been entered into between the disbursing entity and the beneficiary SACCOs; shs34.7 billion, though disbursed remained un-accessed by the beneficiaries,” reads part of the audit report.

Uganda Development Bank (UDB)-558.6 billion

Out of the shs 558.68 billion appropriated for recapitalization of Uganda Development Bank, Auditor General says that only shs 531 billion was disbursed leaving shs 26.87 billion unremitted by the Ministry of Finance.

“From the amount disbursed, funds totaling shs 234 billion Shillings had been paid out to various beneficiaries; by the time of the audit, the balance of shs 292.6 billion was still deposited in commercial banks. Of the amounts paid out, shs 95 billion was sent to financial institutions and SACCOs following MoUs entered into by UDB and financial institutions, for the latter to on-lend to beneficiaries,” further reads the report.

Micro-finance Support Centre shs56.8 billion

Muwanga says that the Micro-finance Support Centre (MSc) lacked capacity at zonal offices to appraise loans and this was manifested in the unbalanced approach for loan appraisals. The centre was allocated shs 56.8 billion to increase funds available for on-lending to different businesses.

According to the audit report, a total of shs 13 billion was disbursed to applicants without the Micro-finance Support Centre finalizing the perfection of securities for the collateral’s, shs2.5 billion irregularly advanced to applicants contrary to the credit policy and shs 3.14 billion advanced to applicants with no collateral.

Meanwhile, Muwanga told Parliament that due to the impact of the pandemic, some audits were not conducted as planned.

During the financial year 2020/2021, the Office of the Auditor-General planned to undertake 4,165 audits but only 2,692 audits representing 88.1 percent of the annual approved budget of government were undertaken.

Muwanga says that a total of 1,473 audits, of which 50 percent are schools and tertiary institutions, could not be undertaken due to resource constraints and effects of the Covid-19 pandemic


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