Members of the East African Legislative Authority rejected a report by its accounts committee after it failed to name individuals responsible for financial impropriety at the East African Community Secretariat.
The committee, chaired by Ngwaru Maghembe, highlighted several cases of misappropriation.
It reported that $218,362 was paid to firms unqualified for the tenders awarded to them. It also found irregularities in the payment of $582,485.93 to Avtech Systems Ltd for installation of security cameras at the EAC headquarters.
In its 151-page report, the committee also cites $29,845 spent on procurement of furniture for the Kiswahili Commission, without adhering to rules and regulations governing the Community.
"This report just comes to kill the intent of the audit commission because no one was mentioned in any of the recommendations," said Mukasa Mbidde, a lawmaker from Uganda.
EALA Speaker Martin Ngoga ordered the committee to come up with actionable recommendations so that those accused of mismanagement are held accountable.
The EALA legislators claimed that nearly $1 million was unaccounted for in the payroll and another $537,000 was lost as a result of illegal contracts.
"About $1.3 million was removed from the staff emolument account contrary to regulations," said Aden Abdikadir, an EALA member from Kenya.
The audit report also showed gross irregularities in the recruitment and award of short-term contracts. According to the accounts committee, there was no evidence that the engagement of short-term staff was recommended to the Council of Ministers for approval as required by law.
The report also showed that staff members with short-term contracts have been working for over seven years. Their contracts also showed they were not entitled to leave and terminal benefits, which is against international labour requirements and contrary to article 70 (1) (2) and regulations 37 (2) of the EAC Staff Rules and Regulations.
The EAC management is currently operating under a structure and establishment approved in 2006, while awaiting the completion of the institutional review, which has been ongoing for 10 years.
The East African Legislative Assembly Accounts Committee said that the overall budget performance of the East African Community for the year 2016-2017 was at 62 per cent. The budget was $106 million, but the actual funds received were $70 million, from which $66 million was absorbed.
The audit commission reported delays in remittance of contributions from partner states. In the report, the committee said that only 39 per cent of the contribution for the financial year 2016-2017 had been received by December 31, 2016.
There has been a 42 per cent decline in contributions from development partners compared with previous financial years. In the past financial year, EALA only got 31 per cent of the budgeted amount from development partners.
Ministers of finance from partner states are considering sustainable, alternative financing options for EAC projects and programmes.
Due to the low budget performance, most planned activities were not implemented, resulting in missed targets.
There is a noticeable decline in grants released by the development partners to finance EAC activities for three consecutive years, from $7.4 million for financial year 2014/2015 to $3.2 million in 2015/16; $2.6 million for 2016/17 and $2.5 million in financial year 2017/2018.