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THE REPUBLIC OF UGANDA - OAG€¦ · Kyambogo University is a public University located 8 kms from...
Transcript of THE REPUBLIC OF UGANDA - OAG€¦ · Kyambogo University is a public University located 8 kms from...
THE REPUBLIC OF UGANDA
REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF
KYAMBOGO UNIVERSITY
FOR THE FINANCIAL YEAR ENDED 30TH JUNE 2015
OFFICE OF THE AUDITOR GENERAL
UGANDA
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TABLE OF CONTENTS
LIST OF ACRONYMS ............................................................................................................................ iii
REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF KYAMBOGO
UNIVERSITY FOR THE YEAR ENDED 30TH JUNE, 2015 ................................................................ iv
DETAILED REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE
KYAMBOGO UNIVERSITY FOR THE YEAR ENDED 30TH JUNE, 2015........................................... 0
1.0 INTRODUCTION ........................................................................................................................ 0
2.0 BACKGROUND INFORMATION................................................................................................ 0
3.0 ENTITY FINANCING ................................................................................................................. 0
4.0 OBJECTIVES OF THE UNIVERSITY ........................................................................................ 1
7.1 Categorization of Audit Findings ............................................................................................. 3
7.2 Summary of audit finding .................................................................................................... 3
LIST OF ACRONYMS
ACRONYM MEANING
FY Financial Year
ISA International Standards on Auditing
KYU Kyambogo University
MoESTS Ministry of Education, Technology Science and Sports
MOFPED Ministry of Finance, Planning & Economic Development
MoPS Ministry of Public service
NCHE National Council for Higher Education
NSSF National Social Security Fund
NTR Non Tax Revenue
OAG Office of The Auditor General
PAYE Pay As You Earn
PDE Procuring and Disposing Entity
PFMA Public Finance Management Act
PPDA Public Procurement and Disposal of Assets
TAI Tertiary Institutions Act, 2001
UGX Uganda Shilling
UNISE Uganda National Institute of Special Education
UPK Uganda Polytechnic Kyambogo
URA Uganda Revenue Authority
REPORT OF THE AUDITOR GENERAL ON
THE FINANCIAL STATEMENTS OF KYAMBOGO UNIVERSITY
FOR THE YEAR ENDED 30TH JUNE, 2015
THE RT. HON. SPEAKER OF PARLIAMENT
I have audited the financial statements of Kyambogo University for the year ended 30th June
2015. These financial statements comprise of the Statement of Financial Position, the
Statement of Financial Performance, and Cash flow Statement together with other
accompanying statements, notes and accounting policies.
Management Responsibility for the Financial statements
Under Article 164 of the Constitution of the Republic of Uganda 1995 (as amended) and
Section 45 of the Public Finance Management Act, 2015, the Accounting Officer is
accountable to Parliament for the funds and resources of the Kyambogo University. The
Accounting Officer is also responsible for the preparation of financial statements in
accordance with the requirements of the Public Finance Management Act 2015, and the
Financial Management Guidelines for Public Universities, 2009, and for such internal control
as management determines is necessary to enable the preparation of financial statements
that are free from material misstatement whether due to fraud or error.
Auditor’s Responsibility
My responsibility as required by Article 163 of the Constitution of the Republic of Uganda
1995 (as amended) and Sections 13 and 19 of the National Audit Act, 2008 is to audit and
express an opinion on these statements based on my audit. I conducted the audit in
accordance with International Standards on Auditing. Those standards require that I comply
with the ethical requirements and plan and perform the audit to obtain reasonable
assurance whether the financial statements are free from material misstatement.
An audit involves performing audit procedures to obtain evidence about the amounts and
disclosures in the financial statements as well as evidence supporting compliance with
relevant laws and regulations. The procedures selected depend on the Auditor’s judgment
including the assessment of risks of material misstatement of financial statements whether
due to fraud or error. In making those risk assessments, the Auditor considers internal
control relevant to the entity’s preparation and fair presentation of financial statements in
order to design audit procedures that are appropriate in the circumstances but not for
purposes of expressing an opinion on the effectiveness of the entity’s internal control. An
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audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management as well as evaluating the
overall presentation of the financial statements. I believe that the audit evidence I have
obtained is sufficient and appropriate to provide a basis for my qualified opinion.
Part “A” of this report sets out my qualified opinion on the financial statements. Part “B”
which forms an integral part of this report presents in detail all the significant audit findings
made during the audit which have been brought to the attention of management and form
part of my Annual Report to Parliament.
PART “A”
Basis for Qualified Opinion
Unsupported adjustment of domestic arrears
The University management adjusted the audited balance of UGX.4,983,181,363 by
UGX.7,080,137,441 for domestic arrears through the statement of changes in reserves.
However, I was able to verify only UGX.4,638,629,950 leaving a balance
UGX.2,441,507,491 not supported with adequate documentation. I was also not availed
with the supporting documents for the newly accrued payables of UGX.8,855,923,344
during the year.
Unauthorized Excess expenditure
Review of the budget estimates and the actual expenditure revealed that a sum of
UGX.4,987,135,363 was incurred well above the budgeted expenditure without the
requisite approval of Council and other authorities.
The practice undermines the intentions of the authorities which approved the budget.
Opinion
Qualified Opinion
In my opinion, except for the possible effects of the matter described in the Basis for
Qualified Opinion paragraph, the financial statements present fairly in all material respects,
the financial position of the Kyambogo University for the year ended 30th June 2015 in all
material respects in accordance with the Financial Management Guidelines for Public
Universities, 2009, and Section 51(1) of the Public Finance Management Act, 2015.
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Emphasis of Matter
Without qualifying my opinion further, I draw your attention to the following matters
disclosed in notes 18 & 22 of the financial statements.
Management of Receivables
Contrary to the University fees policy and Examinations regulations I noted that the
University reported receivables of UGX.4,809,987,553 relating to student’s fees.
Failure to collect tuition cripples the University’s ability to implement planned activities
and impacts negatively on service delivery.
Accumulation of Payables
Contrary to the Government commitment control system which requires the Accounting
Officers to commit the entity to the extent of funds availability, payables amounting to
UGX.8,855,923,344 accrued during the year.
Failure to adhere to the commitment control system does not only violate the laid down
Government policies, but also exposes the University to the risks associated with delayed
settlement of suppliers, such as litigations with their attendant costs.
Other Matter
In addition to the matters raised above, I consider it necessary to communicate the
following matter other than those presented or disclosed in the financial statements.
Staffing Gaps
Review of the approved University staff establishment revealed that out of 1,556 posts,
only 837 (54 %) were filled leaving a gap of 723 (46 %) posts. Out of 537 required
academic staff, only 260 posts were filled, which was less than 50%. This implies that
the University does not have the requisite number of teaching staff, despite the fact that
teaching is its core activity. Inadequate staffing undermines the achievement of strategic
objectives and affects the level and quality of service delivery at the University.
Underfunding of University Capital Development budget
Review of capital budget performance for the last six financial years revealed that only
UGX. 16,063,057,000 cumulatively has been allocated for capital development by both
the central Government and the University through the annual budget allocations and
Non-tax revenue.
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This underfunding does not allow the University to develop adequate infrastructure to
cater for the increasing student population.
John F.S. Muwanga
AUDITOR GENERAL
21st December, 2015
PART "B"
DETAILED REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS
OF KYAMBOGO UNIVERSITY FOR THE YEAR ENDED 30TH JUNE, 2015
This Section outlines the detailed audit findings, management responses, and my
recommendations in respect thereof.
1.0 INTRODUCTION
Article 163 (3) of the Constitution of the Republic of Uganda, 1995 (as amended)
requires me to audit and report on the public accounts of Uganda and all public
offices including the courts, the central and local government administrations,
universities, and public institutions of the like nature and any public corporation or
other bodies or organizations established by an Act of Parliament. Accordingly, I
carried out the audit of the Kyambogo University to enable me report to Parliament.
2.0 BACKGROUND INFORMATION
Kyambogo University is a public University located 8 kms from Kampala City. It is
found in Kyambogo Parish, Nakawa Division, Kampala District. It was established by
the Universities and Other Tertiary Institutions Instrument No.37 of 2003. The
University was established out of a merger of three former institutions of ITEK, UPK
and UNISE. The University’s vision and mission statements are as stated below;
Vision: “To be a Centre of academic and professional Excellency”
Mission: “To advance and promote knowledge and development and skills,
technology and education and in such other fields having regard to quality equity
progress and transformation of society”
The University is unique in nature because of the different specialties drawn from the
three former institutions which are teacher education, engineering science; and
special needs education and rehabilitation.
3.0 ENTITY FINANCING
The University was financed by Grants from Central Government, Donor funds and
locally generated revenues. Grants totalling UGX 25,443,509,830 and UGX
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966,478,400 were received from Central Government and other Government units
respectively while Non-Tax Revenue collection was UGX. 44,662,899,671 for tuition
fees.
4.0 OBJECTIVES OF THE UNIVERSITY
The University’s strategic objectives include;
Foster excellence in education encompassing quality, skills development, breadth and
relevance of teaching and learning,
Promote research, innovation and knowledge generation,
Improve infrastructure and facilities in line with the University needs,
Strengthen the University’s institutional capacity, and
Improve the stature and image of the University.
The University’s specific objectives include;
To spearhead applied research.
To produce highly and practically skilled man power for service to society.
To strengthen and expand vocational studies.
To provide training for teachers and other personnel working in the field of special needs
education and rehabilitation, and to cater for all kinds of persons with disabilities and
special learning needs.
To equip graduates with the analytical tools required to solve problems utilizing their
scientific knowledge and appropriate technology.
To provide a resource center for the production and dissemination of information relating
to persons with disabilities and special learning needs.
To promote the acquisition, adaptation and application of information technology and to
solve economic and educational problems of Uganda.
5.0 AUDIT OBJECTIVES
The audit was carried out in accordance with International Standards on Auditing
and accordingly included a review of the accounting records and agreed procedures
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as was considered necessary. In conducting my reviews, special attention was paid
to establish:-
a) Whether the financial statements have been prepared in accordance with
consistently applied accounting policies and fairly present the revenues and
expenditures for the period and of the financial position as at the end of the period.
b) Whether all funds were utilized with due attention to economy and efficiency and
only for the purposes for which the funds were provided.
c) Whether goods and services financed have been procured in accordance with the
Government of Uganda Procurement regulations.
d) Whether the University had a sufficient internal control structure and the internal
controls were working as intended.
e) Whether the management complied with the Government of Uganda financial
regulations in their operations.
f) Whether all necessary supporting documents, records and accounts have been kept
in respect of all activities, and are in agreement with the financial statements
presented.
6.0 PROCEDURES PERFORMED
The following audit procedures were undertaken:-
(a) Revenue
Obtained schedules of all revenues collected and reconciled the amounts to the
cashbooks and bank statements.
(b) Expenditure
The payment vouchers were examined for proper authorization, eligibility and
budgetary provision, accountability and support documentation.
(c) Internal Control system
Reviewed the internal control system and its operations to establish whether
sound controls were applied throughout the period audited.
(d) Procurement
Reviewed the procurement of goods and services by the Ministry during the
period under review and reconciled with the approved procurement plan.
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(e) Fixed Asset Management
Reviewed the use and management of the Ministry assets during the period
under audit
(f) Financial Statements
Examined on a test basis, evidence supporting the amounts and disclosures in
the financial statements; assessed the accounting principles used and
significant estimates made by management; as well as evaluating the overall
financial statement presentation.
7.0 FINDINGS
7.1 Categorization of Audit Findings
The following system of profiling of the audit findings has been adopted to better
prioritise the implementation of audit recommendations.
N
o
Category Description
1 High significance Has a significant / material impact, has a high likelihood of
reoccurrence, and in the opinion of the Auditor General, it
requires urgent remedial action. It is a matter of high risk
or high stakeholder interest.
2 Moderate significance Has a moderate impact, has a likelihood of reoccurrence,
and in the opinion of the Auditor General, it requires
remedial action. It is a matter of medium risk or moderate
stakeholder interest.
3 Low significance Has a low impact, has a remote likelihood of reoccurrence,
and in the opinion of the Auditor General, may not require
much attention, though its remediation may add value to
the entity. It is a matter of low risk or low stakeholder
interest.
7.2 Summary of audit finding
No Finding Significance
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1. Unsupported adjustment of domestic arrears High
3. Unauthorized Excess expenditure High
4. Management of Receivables High
5. Accumulation of Payables High
6. Under funding of University Capital Development High
7. Staffing Gaps High
8. Mischarge of expenditure Moderate
9. Late delivery of Teaching materials Moderate
10. Failure to Appoint Contracts Managers Moderate
11. Lack of a Risk Management policy Moderate
12. Absence of IT steering committees Moderate
13. Failure to collect outstanding rental fees from private
businesses
Moderate
14. Grounded Vehicles Moderate
15 Follow up of prior year Audit recommendations Moderate
8.1 Unsupported adjustment of domestic arrears
The University management adjusted the audited balance of UGX.4,983,181,363 by
UGX.7,080,137,441 for domestic arrears through the statement of changes in
reserves. However, I was able to verify only UGX 4,638,629,950 leaving a balance
UGX.2,441,507,491 not supported with adequate documentation. I was also not
availed with the supporting documents for the newly accrued payables of
UGX.8,855,923,344 during the year.
In the absence of supporting documents I could not confirm the correctness of the
adjustments and accrued payables during the year.
There is a risk that fictious claims can creap through the system and they are paid as
domestic arrears.
There appears to be no systematic approach of compiling and documenting all the
payables at the end of the financial year.
I advised the Accounting Officer to put in place proper procedures of tracking and
recording all unpaid claims and invoices for their proper management and eventual
settlement.
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8.2 Unauthorized Excess expenditure
Paragraph 3.18 (5) of the Kyambogo University Management Manual 2014 states
that “The vote holder in consultation with the University Bursar, are responsible for
monitoring their expenditure to ensure that the budget limits of their Administrative
departments or Faculties are not exceeded and to initiate requests for virement,
reallocation and /or supplementary provisions when their budget limits are about to
be used up”.
Review of the budget estimates and the actual expenditure revealed that a sum of
UGX.4,987,135,363 was incurred well above the budgeted expenditure without the
requisite approval of the Council and other relevant authorities.
I explained to management that over expenditure on one budget item suffocates the
implementation of other planned activities. The practice also undermines the
intentions of the authorities which approved the budget.
In response management indicated that the excess expenditure was due to
inadequate budgeting. The expenditures were particularly on teaching and learning
budget, arising from pressures to settle domestic arrears for this category of
expenditure.
I have advised the Accounting Officer to always budget properly and avoid
overspending by obtaining appropriate authority and adjusting the budgets where
expenditure is expected to exceed the initial budgeted amounts.
8.3 Management of Receivables
The University fees policy and Examinations regulations require that for any student
to sit for University exams, he/she must have fully paid up all tuition and functional
fees and duly registered with the University. Strict implementation of the policy
would mean that no debtors would arise from unpaid fees. I noted however, that the
University reported receivables of UGX.4,809,987,553 relating to student’s
fees.According to Note 18 to the Financial statements, UGX.3,482,873,320 has been
outstanding for more than one year.
I explained to management that failure to collect tuition fees cripples the University’s
ability to implement planned activities and impacts negatively on servive delivery.
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In response management explained that there was a reduction in the receivables
accrued during the year compared to the previous years. They attributed this to the
operationalization of the financial manual and introduction of revenue collection
system E-kampus.
I advised management to collect the outstanding receivables and also implement the
University fees policy with the aim of ensuring that all students pay their tuition fees
before sitting for the university exams.
8.4 Accumulation of Payables
Contrary to the Government commitment control system which requires the
Accounting Officers to commit the Government entities to the extent of funds
availability, payables amounting to UGX.8,855,923,344 accrued during the year as
shown in the table below;
ITEM New outstanding
Commitments
Incurred during
the Year
Cumulative Outstanding
commitments 30 June 2015
Employee costs 4,915,927,602 8,802,292,578
Goods and Services
Consumed
3,939,995,742 4,830,873,682
8,855,923,344 13,633,166,260
With the current level of revenues collected by the University, It is highly unlikely
that the payables will be settled in the near future.
I explained to management that failure to adhere to the commitment control system
does not only violate the laid down Government policies, but also exposes the
University to the risks of litigations with their associated costs and also to the
possibility of industrial/labour strikes by unpaid staff members.
Management attributed the increase in payables to mandatory expenditures due to
the nature of the University operations whereby some activities are implemented
across the financial years, uneven cash flows as result of delayed students’ fees
payments and spill over effect of students’ and staff unrest in the previous financial
year.
I advised the accounting officer to adhere to the Government Policy and ensure that
commitments are only allowed to the extent of the available funds.
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8.5 Under funding of University Capital Development budget
Review of the University budget performance report revealed that the University has
been grossly underfunded in terms of capital development over the last six year.
Analysis of capital budget performance for the six financial years revealed that for
these years, only UGX 16,060,057,000 has been allocated for capital development by
both the central Government and the University through the annual budget
allocations and Non-tax revenue respectively as shown in the table below;( figures in
thousands).
Financial Year
GoU Contributi
on to Capital
Developm
ent
NTR Contribution
to capital Development
Total Total %ge
of GoU Releas
es
Total %ge of NTR
Collection
2009/10 222,844 702,080 924,924 1.2 2.3
2010/11 167,133 2,077,838 2,244,971 0.7 5.7
2011/12 167,134 2,434,018 2,601,152 0.9 6.2
2012/13 167,138 5,066,687 5,233,824 0.8 11.6
2013/14 222,845 2,329,506 2,552,351 0.9 5.1
2014/15 55,711 2,450,124 2,502,835 0.2 5.5
Total 1,002,805 15,060,253 16,060,057
I noted that the increasing student population has increased form 19,600 in 2013/14
to the current 25,000 in 2015/16. The small capital budget cannot permit
development of adequate infrastructure to match the increasing student numbers but
instead puts pressure on the old inadequate infrastructure. NCHE recommends on
average 2.5m2 per student of classroom space which does not seem to be available
given the current level of infrastructure development.
It was noted that most of that most of the houses (staff and others) are roofed with
asbestos sheets, which have been outlawed and banned.
Management acknowledged the gross underfunding on capital development and
indicated that the issue had been raised in various reports but no increments have
been considered by the Government. They also indicated that the University
management was in constant consultation with Ministry of Education, Science, and
Technology & Sports to review this trend.
I advised management to pursue the matter of funding with MoFPED and MoESTS
with a view of ensuring that adequate capital development funds are provided to
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enable the University undertake infrastructure development to cater for the
increasing student population.
8.6 Staffing Gaps
Review of the approved University staff establishment revealed that out of 1,556
posts, only 837 (54 %) were filled leaving a gap of 723 (46 %) posts. Out of 537
required academic staff, only 260 posts were filled, which was less than 50%. This
implies that the University does not have the requisite number of teaching staff,
despite the fact that teaching is the core activity. Most affected positions were those
above lecturer position, implying that the University is facing challenges of
supervising academic work at a senior level which impacts negatively on the
University’s research initiatives. The low number of teaching staff is also contrary to
the recommended numbers by NCHE.
The recommended ratios by NCHE are as follows;
Details Ideal Good Acceptable
General 1:15 1:2 1:25
Arts and Social Sciences 1:15 1:25 1:30
Other Proffesions,Law, Education etc. 1:15 1:20 1:25
Science based Professions 1:10 1:15 1:20
The low numbers of PHD and Masters holders is also contrary to the recommended
levels by NCHE which should be as follows;
Details Ideal Good Acceptable
Ph.D Holders 60% of staff 50% of staff 15-50% of staff
Masters Holders 70% of staff 60% of staff 50% of staff
Contact hours for academic
staff
10hrs/week 15hrs/week 20hrs/week
I explained to management that inadequate staffing undermines the achievement of
strategic objectives and affects the level and quality of service delivery at the
University.
In response, Management explained that the University did not have funds to recruit
staff and that for the last three (3) years; the University has not attracted Professors
and Associate Professors. As a strategy, the University had resorted to grooming its
own Professors and Associate Professors through Promotions, Training and Research
whereby 110 academic staff had enrolled for PhD and 41 had graduated. They
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further indicated that the University had also written to the Ministry of Public Service
to solicit for enhancement of the wage bill to enable it recruit additional staff in the
coming financial years.
I await the outcome of management efforts in addressing the staffing gap.
8.7 Mischarge of expenditure
The University uses the Government of Uganda Chart of accounts, which defines the
nature of expenditure for each item code. It is intended to facilitate better and
consistent classification of financial transactions and also track budget performance
per item in line with the approved budget. During budgeting, funds are tagged to
particular activities and outputs using account codes and are appropriated as
accordingly.
I noted however, that during budget implementation payments amounting
UGX.146,286,272 were charged on budget items meant for other activities. I
explained to management that the practice impacts on the credibility of the financial
statement balances since they do not reflect the true amounts expended on the
respective activities. It also undermines the budgeting process.
The Accounting Officer explained that the mischarges arose from payment of
committee sitting allowances whose budget had been exhausted. I advised him to
ensure adequate and proper budgeting process to cater for all activities
appropriately.
8.8 Late delivery of Teaching materials
During the financial year under review, the University entered into contracts with
various service providers for supply of teaching materials intended for practical
lectures and other teaching guides with specified delivery schedules of one to two
weeks. I noted however, that teaching materials worth UGX.91,790,778 were
delivered two months after placement of the supply orders and the materials could
not be used for the intended purpose during the semester.
In response management attributed the delays to a number of issues such as late
initiation of procurements hence forcing PDU to set short delivery periods which were
not practical, the nature of the requirements for some Departments i.e. Human
nutrition & Home Economics, Agriculture and Art & Industrial Design required
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complex, unique, assorted items like rats and others which were not readily available
on the market.
I advised the Accounting Officer to streamline the procurement processes of teaching
materials to ensure that user departments initiate procurements in time.
8.9 Failure to Appoint Contracts Managers
A sample of 28 procurements worth UGX.1,955,176,369 were reviewed and it was
noted that contract managers were not appointed contrary to Reg.52. (1) of the
PPDA (contract regulations) 2014 which requires the user departments to nominate
to the accounting officer, a member of the user department, with appropriate skills
and experience, or who is supervised by a member of the user department who has
the appropriate skills and experience, to be appointed as contract manager .
In other cases where contract managers were appointed, there was no evidence of
implementation plans and contract management reports being filed.I explained to
management that failure to appoint contract managers violates the PPDA laws and in
their absence and contract management records, I could not confirm whether
supervision and monitoring of the contracts were adequately undertaken and in
accordance with the terms of the contract agreements.
In response management explained that contract managers were being appointed
for only works related procurements and that in future contract managers will be
appointed for all contracts and train all users in contract management.
I await the outcome of management’s commitment and actions.
8.10 Lack of a Risk Management policy
Risk assessment is the Identification and analysis of likely risks that an entity is
exposed to and can affect achievement of objectives. This informs the
steps/measures that can be taken to mitigate such risks. This is also a requirement
under the principles of corporate Governance 2014.
I noted however that the University management does not have an approved risk
management policy. I explained to management that failure to put in place a
comprehensive risk management policy exposes the University to resort to reactive
other than proactive responses to risks and there is a possibility that in case of any
unexpected events happening, the University may not be able to mitigate their
effects.
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In response, management indicated the development of risk management policy is
under process.
I advised Management to put in place a risk management policy that should provide
for analysis of risks and adoption of appropriate mitigation measures to address the
risks.
8.11 Absence of IT steering committees
KYU ICT policy Sec 6(2) states that Research, Innovations and Business Development
(RIBD) section shall be responsible for the development and review of ICT policies
and strategies for the University. The successful implementation of the ICT strategy
requires a well-focused coordination and University will need to utilize the ICT
steering committee to oversee the implementation of the strategy.
I noted that the University has not formed the steering committee to oversee
investments in ICT at the University. I explained to management that uncoordinated
ICT investments could lead to acquisition of ICT to investments that are not properly
aligned to the University’s business processes.
In response management explained that the Directorate of ICT was approved by the
University Council in November 2015 and that the structure that caters for the ICT
Steering Committee was part of the approval.
I advised the Accounting Officer to expedite the formation of the IT steering
committee so as to ensure that the investments in IT are strategically guided.
8.12 Failure to collect outstanding rental fees from private businesses
The University hired out spaces to various private business operators from which
rent is collected. At the close of the year, unpaid rental fees had accumulated to
UGX. 44,907,670 covering a number of years but there was no evidence that the
University had made efforts to recover the outstanding rental dues and the figure is
not included in the receivables for the year.
I advised the Accounting Officer to institute mechanisms to recover all outstanding
rental dues and in future consider putting in place controls to prevent accumulation
of unpaid rental dues.
8.13 Forgeries of examination cards
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The University fees policy and Examinations regulations require that for any student
to sit for University exams, he/she must have fully paid up all tuition and functional
fees and duly registered with the University. A student who satisfies the above
condition is cleared and given a green card to sit examinations.
Details from the Academic registrar’s office showed that a number of students were
involved in forgeries of Examination Registration cards during Semester 1 and II of
2014/15 Examinations. Management acknowledged that some students had
managed to manipulate the system to sit exams and some were even able to
graduate without clearing the University fees.
I explained to management that those forgeries are a result of weak internal controls
surrounding the fees collection and examinations management.
Management regretted the anomaly and explained that a number of policies and
guidelines on student fees collections, registration and management of examinations
had been put in place. The University had also extensively invested in automation of
business processes (e-kampus payment systems) to facilitate efficient fees
collections, students’ registrations and results management. Management stated that
it will further strengthen the registration process for examinations management by
investing in barcode readers and staff capacity development.
I await the outcome of management’s actions towards improving the controls in fees
collection and examination management.
8.14 Grounded Vehicles
Statutory Instruments 2014 No. 13, Regulation 2(1) of the PPDA Regulations 2014,
provides that for purposes of disposal planning, an accounting Officer shall, in each
financial year, cause the public assets of a PDE to be reviewed to identify the public
assets to be disposed of in the following financial year.
A review of a report obtained from the University Estates office indicated that a
number of assets including grounded vehicles were in bad condition with no plans by
the University to have these assets boarded of. There is a risk of further
deterioration in the scrap value of the assets if no immediate action is taken to board
them off.
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In response, the Accounting Officer stated that the vehicles in bad condition belong
to the MoESTS, and that he had written to the Ministry to obtain authority to either
dispose them off or to have them taken by MoESTS.
I advised the Accounting Officer to follow up this matter with MoESTS and Ministry of
Works to have the vehicles disposed of.
8.15 Follow up of prior year Audit recommendations
A review of the previous year audit issues and recommendations was carried out and
it was noted that management has not implemented the recommendations as per
details in the table below;
Audit Issue Current Status
Verification remarks
Misstatements in the Financial
Statements
Not addressed Financial statements were
corrected and submitted to
OAG for review.
Lack of budget provisions for
domestic arrears - UGX.959,827,755
Not Addressed Addressed in FY2015/16
BUDGET were UGX 3 billion was
provided for domestic arrears.
Failure to adhere to the Commitment
Control System
Not Addressed Not addressed as FY 2014/15
Accounts indicate over
commitment and payables.
Management of Receivables Not Addressed Partially addressed by settling
UGX; 1,251,270,988 leaving a
balance of UGX 47,078,093.
Failure to collect Revenue from staff
rentals – UGX.180,966,472
Not Addressed Partially addressed by UGX
2,113,884 not recovered.
Failure to collect outstanding rental
fees from private businesses -
UGX.42,457,276
Not Addressed Partially addressed with UGX
2,857,835 outstanding by feb
2015 (mukab general supplies
620,000 Kyala & brothers
1,621,000, twin general
enterprises 4553,320, NCHE
1,331,015).
Unpaid Hall Fees - UGX.62,560,000 Not Addressed Addressed fully
Non-collection of rent from
businesses operating illegally in the
University
Not Addressed Partially addressed:
Pending chief government
valuer to value rentable spaces
in the university.
Banks operating in the University
premises without paying rent and/or
valid contracts
Not Addressed Partially addressed. With ECO
BANK which was still consulting
its headquarters in west Africa.
Revenue from the University Farm:
Outstanding credit sales to
departments – UGX.15,571,150
Unauthorized Over Expenditure –
Not Addressed Partially addressed. Recurrence
of the same observation in
2014/15 final account.
14
UGX.5,135,749,119
Mischarge of expenditure – UGX.
978,727,963
Not Addressed Partially addressed. Recurrence
of the same observation in
2014/15 final account.
Unexplained deductions -
UGX.239,465,087
Not Addressed Addressed.
Extra Load Allowance -
UGX.40,145,000
Not Addressed Not Addressed.
It’s hard to address the
situation as the staffing is not
improved.
Doubtful Payment of Teaching
Allowance - UGX.17,957,500
Not Addressed Partially addressed
Un-presented Payment Vouchers –
UGX.504,161,513
Not Addressed Fully addressed
Advances not accounted for -
UGX.66,335,791
Not Addressed Partially addressed with
UGX.10,273,000 not recovered.
But plans to recover from
individuals are underway.
Non-remittance of taxes to URA -
UGX.382,901,835
Not Addressed To be addressed in FY2015/16
budget.
Not addressed
Undeducted NSSF –
UGX.315,232,550
Not Addressed Addressed
Undetailed Procurement work plan Not Addressed Addressed
Child To Child Project Not Addressed Addressed
Staffing gaps Not Addressed Not addressed.
Failure to record land in the Fixed
Assets Register
Not Addressed Addressed
Failure to transfer land titles into the
names of Kyambogo University
Not Addressed Under process of transfer.
Unabated Land Encroachment Not Addressed Partially addressed.
Un-demarcated University Land Not Addressed Under negotiation with
Buganda kingdom.
Dilapidated East end Kitchen
(Mandela Hall
Not Addressed Not addressed;
At level of Request for
quotations. Work is to be
undertaken this financial year
2015/16.UGX 250milion for
renovation in 2015/16 budget.
Non-functioning CCTV cameras Not Addressed Not addressed: Repairs
Provided in FY2015/16 BUDGET
Failure to install proper burglar
proofing at the East End Dining
stores
Not Addressed Addressed
Broken water pipes and dilapidated
Lavatory facilities in Halls of
residences
Not Addressed Addressed
Failure to dispose grounded vehicles Not Addressed Not addressed.
15
In addition, the University has continued to attract qualified audit opinions over a
number of years. Many of the bases of the qualified opinions required management to
cause investigations into the actions of the responsible staff and take action, while
others indicated systemic challenges that required council decisions to review the
operations of certain departments such as finance, procurement and internal audit.
This has not been the case.
In July 2014, I issued a special investigations report on the operations of the
University. However, there is no evidence that the University council and management
have taken any actions on my recommendations there in.
The accumulation on unresolved audit issues and recommendation could be an
indication that management and council do not appreciate the importance of the audit
recommendations and unwillingness to improve for better results.
I advised management of the University to review all the Auditor General’s reports for
the last five to seven years and implement the recommendations therein to enhance
accountability and better stewardship of the University resources.
16
FINANCIAL STATEMENTS