Gross mismanagement of billions of shillings of public funds has been unearthed in Mbarara district.
A report by the Auditor General (AG), John Muwanga, for the year ending June 30, 2011, said money was irregularly allocated to projects and in other cases, it was not recorded in books of accounts.
It was observed that out of sh1.2b (excluding property tax) collected, only sh80.9m was remitted to the divisions, leaving sh305.4m outstanding.
The unremitted funds were not disclosed as liabilities on the balance sheet.
It was discovered that monthly and quarterly financial reports, including an annual trial balance, a consolidated statement of income and expenditure, a balance sheet at the end of the quarter and other financial statements were not prepared and submitted.
The report says purchases worth sh12.7m were made without following procurement regulations.
Management explained that they sought permission from the contracts committee before purchase, but evidence was not provided.
The AG called for appropriate administrative action on the errant officers.
There were also irregularities in the lease of former Unicef grounds to the American Procurement Company (AMPROC). The district leased out 7.976 acres of land on Plot 5, Kitunzi Road to AMPROC for 40 years at a rate of sh3.4m per annum.
However, it was observed that the value of the land had not been properly established as the valuation report used was for the year 2006 and the values were not negotiated.
In the circumstances, the AG noted that value for money was not achieved and advised that a revaluation be made at current prices and any loss borne by those responsible.
Auditors found various health centres had a shortage of drugs. The AG said this may be due to the insufficient amount of drugs dispatched to the health centres by the National Medical Stores (NMS).
He advised management to liaise with NMS and other stakeholders to solve the bottlenecks. Most of the health centres inspected lacked equipment and accessories like mosquito nets, blankets and delivery items for mothers.
The centres were understaffed, with only 113 posts filled out of the 250 established vacancies in the 10 health centres.
A total of sh1.2b was committed to 18 projects in the health, education, water and works sectors. By the end of the year, only eight of the planned activities worth sh83m were complete.
The rest of the 10 activities worth sh1.19b were incomplete due to various reasons, including limited capacity of contractors and the release of insufficient funds. Projects completed worth sh138m were neither budgeted for nor included in the workplan.
Mbarara municipal council contracted an unnamed company to collect sh1.3b property tax for the year and property tax receivables of sh646.9m.
However, only sh237m and sh37m were collected, respectively. The council could not explain the performance gaps.
It was noted that revenues accruing from property rates of sh378.5m were not recorded and the year's property rates revenue were disclosed as sh646.9m instead of over sh1b, hence understating property rates debtors by sh359.6m.
It was discovered that property rates ledgers were not kept and exempt properties were not excluded, hence the overstatement.
The council made a provision for bad debts of sh116.4m, contrary to the financial and accounting regulations and wrote off bad debts for the 2009/10 financial year worth sh170.3m.
A total of sh25m arising from civil suit no 243 of 1996 (against tycoon Charles Muhangi) were not properly disclosed on the balance sheet and were not recorded as revenue, contrary to regulations.
In addition, plots 32-40 on Mbaguta road were not disclosed in the financial statements.
Although management explained that the errors had been corrected, this was not done on verification by the AG.
Council has continued to approve buildings in the town centre without underground parking, contrary to its policy.
A sample of 15 buildings erected between 2008 to-date had no underground parking, yet the council resolved in 2008 never to approve building plans without underground parking.
Under the council development plan, the municipality is served by hydroelectric power, covering about 70% of the area and nearly 60% of the town population.
However, of the existing 365 electric poles, only 43 have functioning security lights, 149 are not functioning, while 154 poles have no provision for security lights.
A comprehensive plan to light the streets was lacking as only sh3m was provided in the budget.
Management attributed this to lack of funding.
Field inspection also revealed unlicensed car washing bays that were discharging potentially toxic water onto the road infrastructure, hence accelerating the deterioration of the roads.
A review of the enrolment of pupils in primary one during 2004 in selected schools was 951 pupils, but those who completed Primary Seven in 2010 were 475.
This could be due to the unfriendly school environment, poverty, lack of confidence and policies in the education system.
Investigators also discovered that the pupil-to-teacher ratio was below the national standard and that the pupil-to-classroom ratio was at 106:1 compared to the national standard of 55:1.
The AG said the unfriendly school ratios, if not addressed, could negatively impact on the delivery of service in primary education and the performance of pupils.
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