Uganda government collects less than 15% of mining royalties due to the absence of on-site mine inspectors, the auditor general has observed.
The auditor general’s report for FY 2018/19 notes that the government collected only Shs 10.5bn as mining royalties yet the Customs and Excise department of Uganda Revenue Authority showed that Shs 70.2bn should have been collected.
This bad statistic is one of many outlined in the report, a summary of which was presented to the media on February 23 at the offices of Civil Society Budget Advocacy Group in Ntinda, Kampala. The report says the government does not have supervisors on mining sites and just relies on self-declarations by mining companies which often under declare.
A joint presser by Civil Society Budget Advocacy Group (CSBAG) and Anti-Corruption Coalition Uganda listed 12 key points of concern about the report. “These are not our numbers; they are from the auditor general’s report,” Julius Mukunda, the executive director of CSBAG, said, adding that they will soon abridge the 100-page report into 10 pages and distribute it to the public massively. Cissy Kagaba, the executive director of ACCU, supplemented Mukunda.
The auditor general’s report also says Shs 66.5bn and $528,000 were attached by way of garnishee orders against the government. “There is a conflict of interest; those supposed to defend us [government], do not. The obvious mistakes of firing staff and ending up with garnishee orders should be addressed by having the individual responsible held liable,” Mukunda said.
The report also mentions duplication of investment by government entities as leading to wastage of resources, increased borrowing and increased maintenance costs. Also highlighted is the under absorption of funds in the upgrading of health centres and construction of seed secondary schools. The absorption rate in these two projects was 43 per cent and 54 per cent respectively. The main blame was placed on the ‘hybrid procurement system’ adopted by the line ministries of Education and Sports, and Health which took long to be concluded and the administrative reviews of the Public Procurement and Disposal of Public Assets Authority.
Besides, various entities also returned unused monies (Shs 548bn) to the consolidated fund. The report mentions lost money through energy losses in power evacuation and delayed construction of power evacuation lines and substations.
Non-collaboration between government entities also leads to a lot of resource leakages. For example, the Uganda Revenue Authority’s failure to access the Integrated Financial Information Management System resulted in Shs 393.8bn not being collected. A number of expatriates do not pay Pay As You Earn tax because the Directorate of Immigration doesn’t share with URA the work permits it issues, several instruments are registered by the Ministry of Lands, Housing and Urban Development without payment of stamp duty, to mention but a few examples.
The report also mentions understaffing in local governments to the tune of 49 per cent. There were also many underfunded recently created town councils. While the government has created 583 new town councils in the last five years, the Ministry of Finance has approved only 228 to access funds from the national budget. In addition, many ministries, departments, agencies and local governments practice mischarge of expenditure, which means spending on unbudgeted items. There are also instances of supplementary expenditure not approved by parliament, which is contrary to the law.
Mukunda said civil servants who fail to perform to expectations or cause financial losses to the government should be prosecuted and replaced. He, however, noted that staff appraisal is lacking in many entities, and this demoralizes government employees.