How Uganda missions squandered $2.8m

By BENON HERBERT OLUKA

Uganda's 28 foreign missions are riddled with weak internal control and monitoring systems, corruption, circumvention of public procurement procedures and reckless expenditure, a report by the Auditor General says.

These weaknesses are likely to cost the country billions of shillings in losses, says the report for the 2006/07 financial year.

The report, which has already been submitted to parliament, shows that the country's 28 missions incurred a total of Ush5 billion ($2.8 million) in excess expenditure that was neither approved nor authorised by parliament.

This is not the first time that the foreign missions are overshooting their budgets. According to the Auditor General, during the 2005/06 financial year, the missions spent a total of Ush8.3 billion ($4.7 million) above their total budget provision without parliament's approval.

Ugandan law requires the accounting officer of any government ministry to seek parliamentary approval to spend public funds in excess of what is initially approved by parliament.

Nandala Mafabi, chairman of the Public Accounts Committee, told The EastAfrican that officials found guilty of spending government funds without approval are supposed to be punished.

"When someone spends money but doesn't have authority to spend it, we treat it as a loss and the person who brought about the loss is held responsible," said Mr Mafabi.

Mr Mafabi said his committee has had a heavy backlog of audit reports to complete since it started scrutinising them when the eighth parliament opened, but would bring any official found to have flouted the law to book when it starts scrutinising the 2006/07 financial report.

"This time we are going to be very serious and hold people accountable because people have taken things for granted," he said.

Of the 28 foreign missions that Uganda has across the world, 11 are in Africa, eight in Europe, three in the US, five in Asia and one in Australia. The Auditor General has also asked parliament to investigate another Ush3 billion ($1.7 million) spent on doubtful payments, unrecorded non-tax revenue remittances, over-payment of allowances, nugatory expenditure, and incompletely vouched expenditure.

Regarding expenses above the budget provision, the biggest culprit was Uganda's embassy in New York, which the Auditor General found to have incurred unauthorised expenditure amounting to Ush1.9 billion ($1 million) in the 2006/07 financial year.

According to a breakdown of the expenditure provided by the embassy to the Auditor General's office, Ush1.3 billion ($742,857) of the excess expenditure was said to have been used for purchasing "goods and services," while another Ush520 million ($297,142) was used for settling "employee costs."

Uganda's embassy in New York was also found to owe the New York City Authority a total of $1.5 million in ground rent for Uganda House — a multi-storied building rented out to UN agencies and the embassy of Burundi — all of whom are said to have been renting several floors at below market rates.

The amount that Uganda owes the New York City Authority comprises of Council property tax of $1.4 million and interest amounting to $66,000.

Uganda's embassy in Rome accumulated the second highest unauthorised excess expenditure of Ush632 million ($361,142), while five other embassies spent more than Ush250 million ($142,857) without authorisation.

Some of the biggest culprits are foreign missions nearest to Kampala. The embassy in Nairobi overshot its approved budget by Ush382 million ($218,285), Kigali by Ush343 million ($196,000), and Dar es Salaam by Ush98 million ($56,000).

Generally, Uganda's 28 foreign missions overshot their approved budgets by an average of Ush179 million ($102,285) in the 2006/07 financial year — a rather high degree of financial recklessness that has rung alarm bells at the Auditor General's office.

"Excess expenditure indicates breakdown of controls over the budgetary expenditure," notes the Auditor General in his 490-page report, before advising the embassies to seek formal approval to overspend funds.

Okello Oryem, State Minister for Foreign Affairs in charge of International Co-operation, declined to comment on the contents of the report, saying financial matters regarding the ministry should be addressed to the accounting officer.

Officials in the ministry said the Permanent Secretary, James Mugume, had travelled out of the country.

Officials from various embassies, however, reportedly argued during discussions with their counterparts from the Auditor General's office that the irregularities are due to under-funding of the missions by the government, which forces the officials to borrow from non-tax revenue sources to finance various critical operations.

While this argument is plausible for some of the embassies, records obtained by the office of the Auditor General show that a number of others accumulated the excess spending as a result of irregular use of their approved budgets.

In the Brussels embassy, for instance, which registered a budgetary expenditure overshoot of Ush106 million ($60, 570), the Auditor General reports that officials flouted foreign exchange rates to overpay their salaries by 29 per cent. As a result, the government lost $5,714 per month in the 2006/07 financial year.

"The Accounting Officer should have the excess payments recovered from beneficiaries and, in future, put exchange rates into consideration to avoid exchange rate gains going to staff," advises the Auditor General.

In another case at the Copenhagen embassy, which overshot its budget by Ush62 million ($35,428), the mission paid $13,600 to a shipping line to ship home personal effects of one of the mission staff.

The goods were, however, shipped and abandoned in Mombasa instead, in spite of the fact that yet another firm had already been contracted and paid $6,500 to clear and transport the goods to Kampala, while an additional $300 was paid to another firm for insurance cover.

But further investigations, according to the Auditor General, later revealed that the shipping firm does not exist.

"In a written response, the Accounting Officer explained that the matter was reported to the police and that the Royal Danish Ministry of Foreign Affairs and the mission lawyers were pursuing the company to recover the extra money which the mission had paid," notes the Auditor General.

While Uganda's foreign missions seem to spend beyond their approved limits with reckless abandon, the Auditor General said the majority of the embassies did not provide sufficient information to show whether they had met the targets set by government.

For instance, the London High Commission, which overshot its budget by Ush137 million ($78,285), realised a total of Ush833 million ($476,000) from non-tax returns but a sum of Ush190 million ($108,571) alleged to have been transferred to the consolidated fund was not supported with remittance advice slips and acknowledgement receipts from the Treasury.

According to the AG, the amount was not recorded in the statement of arrears of revenues, resulting in understatement of revenues collected.

 

--
Jean-Louis Kayitenkore
Procurement Consultant
Gsm: +250-08470205
Home: +250-55104140
P.O. Box 3867
Kigali-Rwanda
East Africa
Blog: http://www.cepgl.blogspot.com
Skype ID : Kayisa66