OFFICE OF THE AUDITOR GENERAL THE REPUBLIC OF UGANDA REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF UGANDA BUREAU OF STATISTICS FOR THE YEAR ENDED 30T JUNE 2021 OFFICE OF THE AUDITOR GENERAL UGANDA ~.~--.~ <,:-,rr,~. TABLE OF CONTENTS LIST O F A C RO N Y M S .....................................ONYMS...-.---..---..-..-.--.-...-.-...-......... ................................... iii REPORT OF THE AUDITOR GENERAL ON THE AUDIT OF THE FINANCIAL STATEMENTS OF UGANDA BUREAU OF STATISTICS FOR THE FINANCIAL YEAR ENDED 30TH JUNE, 2021.................... 1 U nq u alified O pin io n ..................................inion...................---..--....----.1.........--.....................................1 B asis fo r O pinio n in.........................................- ......................................1 Key A udit M atter................................................................ 1.0 IMPLEMENTATION OF THE APPROVED BUDGET..................... ......D...G......... ....... .1 2.0 STA FFING G A PS ......................................................... 3.0 LACK OF LAND TITLES FOR UBOS LAND......................D. _D - - ............................7 4.0 UNDER ABSORPTION OF FUNDS UNDER UNFPANFPA.................................-..............................8 5.0 DELAYED IMPLEMENTATION OF UBOS PANEL-SURVEY PROJECT......................................... 8 6.0 DELAYED IMPLEMENTATION OF BASELINE EDUCATION CENSUS PROJECT (WB-GPE- U T S E P)................................................. 7.0 UNIMPLEMENTED PLANNED PROCUREMENTS................................................................ 12 A PPEN D IC ES.....ICE..S...... ................ ... ............... .....................----.14..-....---.....--.-.... . .........................14 APPENDIX 1: Im plementation of the approved budget..................................................................14 APPENDIX 2: Extent of Quantification by activitiestivi............................ - ...........................54 APPENDIX 3: Showing level of implementation of Fully Quantified outputs.......................................55 FINANCIAL STATEM ENTS .......................TEMENTS..................-..----.....--....56......--...................................56 ii LIST OF ACRONYMS ACRONYMS MEANING BEC Budget Execution Circular EPRC The Economic Policy Research Centre (EPRC) GoU Government of Uganda ICT Information Communication Technology ICT Information & Communication Technology IFMS Integrated Financial Management System INTOSAI International Organization of Supreme Audit Institutions ISSAIs International Standards of Supreme Audit Institutions JLOS Justice, Law and Order Sector MDAs Ministries, Departments and Agencies Mn Million MoFPED Ministry of Finance, Planning and Economic Development MOGLSD Ministry of Gender Labour and Social Development MOH Ministry of Health NAA National Audit Act NIRA National Identification and Registration Authority NTR. Non-Tax Revenue OAG Office of the Auditor General PBS Program Budgeting System PDU Procurement & Disposal Unit PFMA Public Financial Management Act PFMA Public Finance Management Act PFMR Public Finance Management Regulations PPDA Public Procurement and Disposal of Assets PPDA Public Procurement & Disposal of Public Assets PS/ST Permanent Secretary / Secretary to the Treasury TI Treasury Instructions UBOS Uganda Bureau Of Standards UCF Uganda Consolidated Fund UGX Uganda Shilling REPORT OF THE AUDITOR GENERAL ON THE AUDIT OF THE FINANCIAL STATEMENTS OF UGANDA BUREAU OF STATISTICS FOR THE FINANCIAL YEAR ENDED 30TH JUNE, 2021 THE RT. HON. SPEAKER OF PARLIAMENT Opinion I have audited the accompanying financial statements of Uganda Bureau of Statistics for the financial year ended 30th June 2021, which comprise the statement of Financial Position as at 30th June 2021, the Statement of Financial Performance, Statement of Changes in Equity and Statement of Cash Flows together with other accompahying statements for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In my opinion, the financial statements of Uganda Bureau of Statistics for the year ended 30th June 2021 are prepared, in all material respects, in accordance with Section 51 of the Public Finance Management Act 2015, and the Financial Reporting Guide, 2018. Basis for Opinion I conducted my. audit in accordance with International Standards of Supreme Audit Institutions (ISSAIs). My responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Bureau in accordance with the Constitution of the Republic of Uganda 1995 (as amended), the National Audit Act, 2008, the International Organization of Supreme Audit Institutions (INTOSAI) Code of Ethics, the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B) (IESBA Code), and other independence requirements applicable to performing audits of Financial Statements in Uganda. I have fulfilled my other ethical responsibilities in accordance with the IESBA Code, and in accordance with other ethical requirements applicable to performing audits in Uganda. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Key Audit Matter Key audit matters are those matters that, in my professional judgment, were of most significance in my audit of the financial statements of the current period. These matters were addressed in the context of my audit of the financial statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters. I have determined the matters described below to be key audit matters communicated in my report. 1.0 IMPLEMENTATION OF THE APPROVED BUDGET On the 24th of April 2020, Parliament approved the annual budget for MDAs and LGs that contained the specific resource envelope allocated to each vote to implement agreed on outputs. Subsequently, the PS/ST issued a Budget Execution Circular that communicated the budget strategy, policy, and administrative issues to guide the budget implementation for the financial year 2020/2021. During my overall risk assessment exercise, I noted that MDAs and LGs are still experiencing challenges in implementing the budgets approved by Parliament and policy guidance's issued by PS/ST, which has continued to affect the performance and credibility of the budget negatively. These challenges include; lack of strategic plans that are aligned to the National Development Plans, underperformance of revenue, implementation of off-budget activities, under absorption of funds, insufficient quantification of outputs, partial and non- implementation of outputs, diversion of funds and challenges in budget monitoring and reporting of performance. I am aware that the Covid-19 Pandemic continues to significantly affect the implementation of several activities. Consequently, a number of activities were not implemented due to budget cuts and lockdown measures instituted to control the spread of the pandemic. It is against this background that the implementation of the budget was again considered a key audit area during the office-wide planning for the current audit year. The Uganda Bureau of Statistics (UBOS) is mandated under the UBOS Act 1998, as the principal data collecting and disseminating agency responsible for coordinating, monitoring, and supervising the National Statistical System. To achieve this mandate, UBOS planned to implement a number of both recurrent and development deliverables under various programmes. A review of the entity's ministerial statement and budgets revealed that the Bureau had an approved budget of UGX.60.696Bn, out of which UGX.48.86Bn was released. The table below shows a summary of the key deliverables of the Bureau for the financial year 2020/21; Table showing key deliverables for UBOS for the ear SN Key deliverables Amount Amount Cumulative Released Spent percentage of (UGX) Bn (UGX) Bn Actual expenditure i. Economic statistical 6.34 6.23 13% indicators ii. Population and Social 10.31 9.48 20% Statistics indicators iii. Industrial and Agricultural 10.07 9.82 21% indicators iv. District Statistics and 1.82 1.78 4% Capacity Building v. National statistical system 4.86 4.57 10% database.maintainpd . vi. Statistical Coordination and 15.47 14.92 32% Administrative support Total 48.86 46.82. 1000/' The Bureau planned to achieve its deliverables through the implementation of one hundred six (106) outputs with a budget of UGX.60.696Bn. I sampled seventy-six (76) outputs worth UGX.40.4Bn, representing 66.6% of the total budget for review as summarised in the table below; Table showing Planned and sampled outputs Total Number of Total budget of Actual % budget allocation of Numbe outputs the sampled expenditure of the sampled outputs in r of sampled outputs (UGX) Bn sampled output relation to net budget Output (UGX) Bn s I - - I 106 .76 40.4 31.88 66.6% From the procedures undertaken, I noted the following; No Observation Recommend ation 1 Existence of Strategic plans that are aligned to NDP-III I commend Paragraph 5 of the budget execution circular for the financial year the 2020/2021 cites poor alignment of Government Budgets with the Accounting National Development Plans. The PS/ST urged Accounting Officer for Officers to ensure that all activities for Financial Year 2020/2021 preparing and are aligned with NDP III and implemented accordingly. aligning its Regulation 26 (1) of the National Planning Authority strategic plan (development of Plans) regulations requires entities to submit to to the NDP III. NPA their five-year development plans for certification before approval. This being the first year of implementation of the NDP-III, the entity was expected to prepare a strategic plan aligned to NDP III and ensure that the plan is approved. The strategic plan would then form the basis of the preparation of the entity's annual plans. During the audit of the Bureau, I noted that the entity had its plan approved at the time of audit. The' Accounting Officer explained that SSPS went through compliance and has now been completed and endorsed by the Minister. 2 Revenue Performance-for MDAs a) Performance of NTR I advised the . . Accouriting I reviewed the NTR estimates, revenue sources, and rates Officer to charged at the \te level 'for the financial year 2020/2120 and ensure 3 and at head office. Much as several correspondences between UBOS and Uganda Land Commission (ULC) were seen on file, it was observed that the land titles are yet to be acquired. Lack of land titles heightens the risk of land grabbing by unscrupulous individuals which may lead to unnecessary court challenges. The Accounting Officer explained that management has continued to follow-up with the Land Commission, which agreed to enter UBOS as a User on the said titles of Entebbe and Statistics House. He further explained that management was in contact with the Ministry of Lands, Housing and Urban Development, in tracing the physical files of Plot 9, Colville Street. Additionally, he stated that for land in Entebbe at Plot 9-11, Airport Road, the Uganda Land Commission had requested a special title and had agreed to include UBOS as a User. Management is advised to continue following up with the process of acquiring the land titles for these two pieces of.land to mitigate the risk of land grabbing. 4.0 UNDER ABSORPTION OF FUNDS UNDER UNFPA UBOS signed an MoU with UNFPA to conduct national surveys under long term census, through compilation of data from various administrative sources and coordinate, monitor and harmonise data production processes in the National Statistical System in collaboration with Makerere University, National Planning Authority, NIRA, MOH, JLOS, EPRC, MOGLSD, and district technical experts. The funding agreement between UNFPA and UBOS specified that the surveys were to start and end on 01/01/2019 and 31/12/2019, respectively. However, during my review, I observed that UBOS refunded unutilised funds to UNFPA of UGX.100,314,000 on 14/04/2021. Additionally, an unutilised balance of UGX.975,097,452 was noted to be on the project account as at 30th June 2021. The above could have arisen due to delayed implementation of activities, which led to delayed absorption of funds. This may potentially jeopardize donor relations with the Bureau by limiting future funding and collaboration, thereby undermining the potential partnerships and service delivery to Ugandans. Management acknowledged the issue and explained that the Bureau was in discussion with UNFPA to ensure that the planned activities are completed by the end of Quarter-2 of FY2021/22 I await the outcome of ongoing discussions with the funder. 5.0 DELAYED IMPLEMENTATION OF UBOS PANEL-SURVEY PROJECT On the 23rd of April 2018, a Memorandum of Understanding was signed between the Ministry of Finance,.,P,anning and Economic Development and UBOS to carry 8 out a Panel Survey funded by the World Bank at a total cost of USD.1,600,000, to be disbursed in three phases in 2018, 2019, and 2020. The closing date of the project was 30th June 2020. The project implementation was started in April 2019 and had a closing balance of UGX.700,665,000 on account no.003430088000019 held at BOU as at 30/06/2019. During the financial year 19/20, the Bureau reactivated the dollar account number No. 003430088400009 held at Bank of Uganda and received USD.299,900 on the 18th of March 2020, for the implementation of the project. During the FY 2020/2021, an additional amount of USD.50,311 was received from the World bank on 17/12/2020 for panel surveys. The programme implementation timeline has been extended by the funder up to 2022. Delays in utilising the availed funds could lead to the return of the grant funds, hence negatively affecting service delivery. The project implementation delays were attributed to Covid-19 restrictions. In his response, the Accounting Officer explained that Bureau obtained a letter of project extension, and the Panel Survey is ongoing. I advised the Accounting Officer to expedite the implementation of activities and ensure that they are accomplished within the extended timeframe. 6.0 DELAYED IMPLEMENTATION OF BASELINE EDUCATION CENSUS PROJECT (WB-GPE-UTSEP) On the 17th Of July 2019, UBOS commenced a collaboration with the Ministry of Education and Sports (MoES) with support from World Bank through Global Partnership for Education (GPE)-through the Uganda Teachers and School Effectiveness Project (UTSEP) to carry out The Comprehensive Education Institutions Baseline Data Collection Exercise (CBE). The project was estimated to cost UGX.11.074Bn (With MoES-GOU meeting 49.9% of the cost and WB-GPE- UTSEP funding 50.1%). The funding was agreed to be disbursed in 4 instalments as detailed below; Installment Milestone Amount - UGX Percentage 1st At signing of MOU 7,751,920,190 70% 2nd Pre-test Report 2,214,834,340 20% 3rd Data Collection progress report 553,708,585 50/o 4th Final data Collection report 553,708,585 5% Total,_ _______________ .11,074,171,700 16.09io According to the agreement, UBOS was to provide personnel for data collection, compilation, and analysis, while MoES was also to provide staff to participate in the implementation of the exercise. The exercise was planned to commence in July 2019 and conclude in December 2019. 9 It was observed that UBOS received UGX.5.151Bn on 28th January 2020 from the Ministry of Education and Sports for the exercise. However, I noted that the exercise was delayed, and only UGX.1.2Bn has been utilised to date, for the recruitment, procurement of tools for the census, and training of project staff. I further noted that data collection activity was not done as of 30th June 2021, with UGX.3.9Bn lying on the bank account unutilised. UBOS was granted a no-cost extension by the funder to extend implementation timelines while awaiting the opening of the educational institutions. The delay was attributed to Covid-19 restrictions that led to the closure of the educational institutions to date. The Census timeline has been adjusted to cater for the delays caused by Covid-19. There is a risk that the MOU and implementation timeline may expire before the activities are implemented. The Accounting Officer explained that a letter from the Ministry of Education and Sports extending the implementation period for the census was obtained, and the Bureau will conduct the Education Census when schools re-open. I advised the Accounting Officer to ensure that preparations are complete and ready for implementation as soon as schools re-open. Other Information The Accounting Officer is responsible for the other information. The other information comprises the statement of responsibilities of the Accounting Officer and the commentaries by the Head of Accounts and the Accounting Officer and other supplementary information. The other information does not include the financial statements and my auditors' report thereon. My opinion on the financial statements does not cover the other information and I do not express an audit opinion or any form of assurance conclusion thereon. In,connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially consistent with the financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude that there is a material misstatement of this other information; I am required to report that fact,I have nothing to report in this regard. Management Responsibilities 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 Uganda Bureau of Statistics. 10 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 for such internal control as management. determines necessary-to enable the preparation of financial statements that are free from material misstatement whether due to fraud or error. In preparing the financial statements, the Accounting Officer is responsible for assessing the Bureau's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless the Accounting Officer has a realistic alternative to the contrary. The Accounting Officer is responsible for overseeing the Bureau's financial reporting process. Auditor's Responsibilities for the audit of the Financial Statements My objectives are to 'obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISSAIs will always detect a material misstatement, when it exists. Misstatements can arise from fraud or error and are considered material if, individually. or in aggregate, they could reasonably be expected to influence the economic decisions of users, taken on the basis of these financial statements. As part of an audit in accordance with ISSAIs, I exercise professional judgement and maintain professional scepticism throughout the audit. I also; * Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. * Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bureau's internal control. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. * Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Bureau's ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor's report. However, future events or conditions may cause the Bureau to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. I communicate with the Accounting Officer regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. I also provide the Accounting Officer with a statement that I have complied with relevant ethical, requirements regarding independence, and to communicate with them all 'relationships and other matters that may reasonably be thought to bear on my indpendence, and where applicable, related safeguards. From the matters communicated"with the Accounting Officer, I determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I describe these matters in my auditor's report unless law or regulation-precludes public disclosure about the matter or when, in extremely rare circumstances, I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Other Reporting Responsibilities In accordance with Section 19 (1) of the National Audit Act, 2008, I report to you, based on my work described on the audit of Financial Statements, that; except for the matters raised in compliance with legislation section below, and whose effect has been considered in forming my opinion on financial statements, the activities, financial transactions and information reflected in the financial statements that have come to my notice during the audit, are in all material respects, in compliance with the authorities which govern them. Report on the Audit of Compliance with Legislation The material finding in respect of the compliance criteria for the applicable subject matters are as follows; 7.0 UNIMPLEMENTED PLANNED PROCUREMENTS According to Paragraph 32 of the Budget Execution Circular for the financial year 2020/2021, the PSST noted -that implementation of critical Government programs 12 continued to experience delays on account of low absorption of funds, delayed procurements resulting from late initiation of the procurement process by beneficiary Departments; failure to.appoint Contract Managers on time to fast track implementation; inefficient management of Resettlement Action Plans and change of designs, among others Therefore, Accounting Officers should ensure that; * Contract managers are appointed in time for every contract * The beneficiary departments initiate the procurement process in time as stipulated under the procurement plan and,. * Issues related to land acquisition and compensation were undertaken in time. However, it was noted that several procurements to the tune of UGX.1.834Bn were not executed as of 30th June 2021. This was attributed to unforeseen circumstances such as the lock-down associated with the Covid-19 pandemic and budget-cuts which affected the provision of planned services. As a result, the implementation of critical government programs was:delayed. In his response, the Accounting Officer explained that management evaluated the activities and has reprioritised the automation of HR Systems and Accounts in this Financial Year. I advised the Accounting Officer to ensure that future procurements are initiated early in the year to avoid such disruptions. John F.S. Muwanga AUDITOR GENERAL 29th November, 2021 13