2 October 2013

Uganda: State House Spending Habits Exposed, PAC to Investigate

A parliamentary review of State House spending over the years has concluded that the president's official residence overshoots its budget by billions of shillings every single year.

Now an investigation by Parliament's Public Accounts Committee will look to find out why State House overshoots its budget and continues to get supplementary budget allocations beyond what is legally permissible.

PAC vice chairperson, Paul Mwiru (FDC, Jinja Municipality East), told The Observer the committee will review the Auditor General's report which found that State House continues to access illegal supplementary funding.

"What is being done by State House is illegal and we need to know why they are doing it. The Auditor General has raised the flag and under our mandate we need to find out why this illegality is being committed," Mwiru said.

According to the AG's report for the financial year 2012/13, the State House approved budget for the year was Shs 64.8bn but the actual releases totalled Shs 173.5bn. He said this represented a 173% or Shs 108.6bn budget overshoot financed by supplementary funding, which was above the original approved budget.

"This implies that the approved budget did not reflect the true operations of State House. It was noted that over the years, State House had continued to receive supplementary requests annually exceeding its original budgets," the report reads.

The report says illegal supplementary budgets "impair the credibility of the budget," adding that in many cases the original budgets approved by parliament are exhausted in the first half of the financial year.

"Why is the culture of supplementary budgets common to State House? What is the peculiarity warranting supplementary requests year in, year out?" asks Mwiru.

In the AG's report, State House officials said they endeavour to prepare budgets that reflect the true operations of State House but their efforts are limited by the Medium Term expenditure framework budgetary ceilings which were far below their estimates.

"To bridge the gap, State House always seeks for supplementary funding," reads the report, which also recommends that State House management should always draw up a realistic budget.

Mwiru says the AG's finding is an alarm which the committee must investigate.

"This is not the first time and if this is not stopped, it will point to a failure on our part as people who are mandated to monitor public expenditure," he said.

According to PAC, a review of State House's outstanding commitments shows they stand at Shs 804,336,592 during the year under review. However, these outstanding commitments were not disclosed in the financial statements, the report says.

"Consequently, the payables balance was understated by the amounts in question," the report adds.

It was also revealed that in the statement of outstanding commitments, there was an adjustment for overstatement of the prior year's arrears of Shs 1,073,557,144, which was not supported by any documentation.

"It was, therefore, not possible to confirm the accuracy and completeness of the figure," the Auditor General notes.

When contacted yesterday, Tamale Mirundi, the President's Press Secretary, said the supplementary requests were justified.

"Most of the expenditure in State House is not predictable; that is why we have to come for requests. For instance, who knows how many people the president will meet in a year?" he said.

It has been revealed that the proposed Public Finance Bill will seek to cure the culture of supplementary budgets by providing for a contingency fund from which urgent financial requests would be charged.

"This is the only way to cure the supplementary requests which have caused disturbances in the expenditure discipline," Chris Kassami, the former secretary Treasury, said last year while appearing before Parliament's committee on Finance, Economic Planning and Development.

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