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Auditor General exposes financial indiscipline at Uganda’s Embassy in Denmark

Auditor General John Muwanga

Auditor General John Muwanga

A new report by the Auditor General has revealed financial indiscipline at Uganda’s Embassy in Copenhagen, Denmark. This is in relation to the utilization of Shs 5.6 billion total budget disbursed to the Embassy for the financial year 2019/2020.

AG John Muwanga’s report on the embassy’s audited financial statements was tabled before parliament last week. Muwanga’s qualified opinion notes that the finances of the embassy were not handled well.

A qualified opinion means a statement issued by an auditor accompanying an entity’s audited financial statements suggesting that the financial information provided by the entity is limited in scope or a material issue concerning the application of generally accepted accounting principles. The diversion of Shs 300 million meant for refurbishing the residence for the head of mission is one of the bases for a qualified opinion by the auditor general.

The government owns an official residence for the head of mission at the Copenhagen-based embassy, but in the report, the auditor general noted that the house is being occupied by the administrative attaché instead of the head of mission.

“During the financial year 2079/2020, the embassy had planned to refurbish the official residence and Shs 300 million was released by the ministry of Finance through a supplementary budget for the purpose. However, the refurbishment did not take place and Shs 190 million was returned to the consolidated fund while Shs 110 million was diverted. Diversion of funds is contrary to the provisions of the Public Finance Management Act, PFMA 2015,” reads part of the audit report.

Muwanga says that there is a risk that in the subsequent financial year the funds may not be re-voted for the refurbishment of the chancery and residence further delaying their utilization.

“The accounting officer explained that the funds for the refurbishment of properties were not utilized due to the difference in Public Procurement and Disposal of Assets (PPDA) regulations between Uganda and Denmark and the bidders had concerns about the general conditions of the contract in the solicitation document issued to them, as being general and yet, in Denmark there exists very specific conditions of contract guiding consultancy services for building and construction works. Hence no Danish firms were comfortable signing the procurement forms provided in the PPDA document format, which the Uganda embassy had issued. The mission, therefore, requested the PPDA for an exception to use the Danish regulations and the consultancy bids were subsequently received and evaluated,” further reads the report.

The embassy accounting officer also blamed the Covid-19 pandemic and the related lockdowns which affected the operations of the embassy and those of the potential contractors and that selection of a consultant could not progress as desired.

However, the auditor general says that this response was unsatisfactory as it did not address the issue of the diversion of the funds. He advises better planning mechanisms to ensure that government projects are implemented and completed within the planned period in line with regulation 11(2) of the Public Finance Management Regulations 2016 and that any need to reallocate funds for expenditure, should seek the authorization of the minister of Finance.

Meanwhile, the audit report also observes that the embassy also rents a separate residence (an apartment) for the head of mission and that during the financial year 2019/2020, rent equivalent to Shs 266.99 million was paid for the apartment.

“During an interview with the former accounting officer for the embassy, Alex Hope Mukubwa on 21st January 2021, it was explained that the head of mission opted to reside in the rented apartment because the official residence was in a state of disrepair and would therefore not provide a befitting image for the embassy and government. A decision was made to allow the administrative attaché to stay in the embassy official residence thereby saving an annual rent of DKK 216,000 equivalent to Shs 121.6 million,” says the report.

The auditor general also identified a sum of Shs 300 million that was approved by parliament as the supplementary budget for the embassy, out of which Shs 270 million was subsequently released.

However, Muwanga observes that the budget was not accurately disclosed in the “commentary on the financial statements by the head of accounts" and in addition, the amount was not disclosed in the “statements of appropriation accounts."

“Misreporting of the budget figure misleads users of the financial statements. The accounting officer explained that the accounts were already consolidated by the accountant general, and promised that prior year adjustments will be made in the financial year 2020/2021. I informed the accounting officer that the financial statements are still misstated and should therefore be adjusted in the subsequent financial year,” says Muwanga.

Muwanga also notes that Shs 225.08 million was irregularly diverted from the activities on which they were budgeted and spent on other activities for which money had not been appropriated without seeking and obtaining the necessary approval. The activities to which funds were diverted included salaries for local staff, air tickets, allowances, energy bills and furniture.

“This action affected the implementation of planned activities. Included in the Shs 225.08 million is a sum of Shs 103.9 million that was diverted in the 4th quarter of the financial year. This was done at a time when key staff were away from the embassy. A review of various correspondences among the embassy staff and the minutes of the finance committee meeting of 26th June 2020 indicated that the management of the embassy mischarged funds to utilize all unspent balances at the end of the financial year 2019/ 2020,” reveals the audit report.

The new audit report also noted a review of the sampled documents which revealed that payments to the tune of Sha 29.57 million had contradicting supporting documentation attached and that payments were not budgeted for or were incurred for activities that are not the responsibility of the embassy.

The AG says that there is a risk that public funds were not put to their proper use and that funds could have been lost through payment for activities of no benefit to the government. Also reported by the auditor general is the payment of Shs 79.58 million to two staff with no contract appointment letters to justify the monthly salaries paid to them.

Muwanga says that payment to staff without contracts amounts to irregular expenditure. Public service standing orders specify the letter of appointment of an officer recruited locally to the foreign service on contract terms. The audit report and others were referred to parliament’s public accounts committee for hearings and scrutiny to begin.                    

Last year in August, the ministry of Foreign Affairs recalled staff at the Ugandan Embassy in Copenhagen, Denmark implicated in a scam planning to embezzle unspent embassy funds.

In an audio clip that circulated widely, the embassy staff who were attending a Zoom meeting discussed how to share the unspent funds for the 2019/2020 financial year. In the Zoom meeting, the diplomats agreed on how much each of the three top diplomats and the junior staff would get as per diem despite not doing any work.

The team in the audio also appeared to discuss a plan on how to bribe the auditors citing similar previous incidents at the Uganda Embassy in Switzerland. In the audio, the officials said they would disguise the unspent funds amounting to $4,000 (about Shs 14.6m) as their per diem for 8 days.

Comments   

+2 #1 WADADA rogers 2021-10-14 11:41
Stealing is the order of the day in this government, it was their chance to take whatever their hands could touch
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0 #2 Akot 2021-10-14 14:06
Quoting WADADA rogers:
Stealing is the order of the day in this government, it was their chance to take whatever their hands could touch


Thanks.

What do we expect from a shithole ruled by one man since 1986?

Yet, Ugandans are at peace waiting to legalise Museveni with yet another fake election, then bolster him immediately with continuity of the fake parliament!

So many have stopped commenting, those of us who still do so will end up doing the same to leave Ugandans at peace with the man they want to rule them for life & leave the seat to his son!
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+1 #3 Lakwena 2021-10-14 14:57
In other words, regardless of social and economic status, Ugandans are becoming more and more corrupt because; for 36 years and counting, Dictator Gen Tibuhaburwa has unsecured the future of the country.

So that no amount of stealing, investing from the proceeds theft and/or saving cannot save you from the vagaries of economic uncertainties.

Wachireba?
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+1 #4 kabayekka 2021-10-14 21:56
So, by going with such a sincere report that seems to have caused the dismissal of the Denmark embassy personnel from their lucrative jobs, what guarantee is there that the replacement staff will work better to try and build a handsome Uganda dynasty for the NRM chairman?

Or will this overseas government financial misery require Madame Nakyobe to get on the plane and to go to Denmark and organize the refurbishment of the dilapidated buildings of the Uganda Embassy?--Accountants take copy!
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-1 #5 Joe 2021-10-15 11:32
Quoting Akot:
[quote name="WADADA rogers"] Stealing is the order of the day in this government, it was their chance to take whatever their hands could touch


Thanks.

What do we expect from a shithole ruled by one man since 1986?...............

Akot, it is clear you are devoid of self esteem, may be you clean toilets for a living in Britain, but accepting the baptism of your country of origin by some DOTARD as a SHITHOLE is sickening to the Ugandans living in Uganda and doing their best to make it better. The residents of a shit hole are FEACES, think about that! Ugandan problems will be solved by continued fight for the better. The Ugandans accepting to be "called" feaces may as well stay shithole cleaners wherever they reside. Lack of self respect and esteem, will not earn you favor with your bigoted masters.
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+1 #6 Zaitun 2021-10-15 16:10
What else would you expect from a government that is ruled by thieves? How sure are you that those guys up there in Denmark had not had the go-ahead of their big men in Kla to commit that crime?

Embezzlement of public finance under this scary regime has never been a problem but the order of the day unless committed by a man coming from those regions that do not matter.

If any man cries foul, the likes of Wainanchi will come up with deady materials and stone or lynche that person to death.
That is now their speciality.

Who bewitched you, pour Uganda, to get so low to this extend and to the point of extinction?
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0 #7 Akot 2021-10-17 18:11
Quoting Lakwena:
...

regardless of social and economic status, Ugandans are becoming more and more corrupt because; for 36 years and counting, Dictator Gen Tibuhaburwa has unsecured the future of the country.

So that no amount of stealing, investing from the proceeds theft and/or saving cannot save you from the vagaries of economic uncertainties.


Thanks.

Yet, Museveni will 1 day die of old age, then what will Ugandans do as all they look up to is Museveni?


What will Museveni's son do for Ugandans when he ha slearnt so much from his evil father & it's that family mother who destroyed Uganda Education & Karamoja?

How many more yeas do Ugandans think Museveni will live?
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0 #8 Akot 2021-10-17 18:18
[quote name="kabayekka"]...

what guarantee is there that the replacement staff will work better to try and build a handsome Uganda dynasty for the NRM chairman?

Or will this overseas government financial misery require Madame Nakyobe to get on the plane and to go to Denmark and organize the refurbishment of the dilapidated buildings of the Uganda Embassy? /quote]

Thanks.

It's up to Ugandans to end Museveni's rule, yet all they do are ensure his lifetime rule through the divisive inhuman tribalistic system, fake presidential & parliamentary elections that bolster Museveni while telling the outside world Uganda is a democracy ruled by Museveni since 1986 & he will be replaced by his son when he dies of old age!

How do Ugandans look at one another, just go on with no future for their own children?
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0 #9 Akot 2021-10-17 18:22
Quoting Zaitun:


What else would you expect from a government that is ruled by thieves? How sure are you that those guys up there in Denmark had not had the go-ahead of their big men in Kla to commit that crime?

Embezzlement of public finance under this scary regime has never been a problem but the order of the day unless committed by a man coming from those regions that do not matter.

If any man cries foul, the likes of Wainanchi will come up with deady materials and stone or lynche that person to death.

That is now their speciality.

Who bewitched you, pour Uganda, to get so low to this extend and to the point of extinction?


Thanks.

Just tribal leaders standing down & UNITY are all Ugandans need to get rid of Museveni/family, then form the kind of governace they want immediately!
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0 #10 Henry Baisi 2021-10-18 21:01
My learned friend the Auditor General has done a good job exposing the fraud across Government.

We now need him or someone better qualified to tell us how to prevent that fraud from happening in the first place. Short of that, he is wasting taxpayer's money too.
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