MPs sitting on the public accounts committee (PAC) - central government have dismissed a submission by officials from the ministry of Energy regarding their failure to declare Shs 23 billion donor funds.
Led by the ministry permanent secretary, Pauline Irene Bateebe, the officials appeared before the committee to respond to the findings raised by the auditor general John Muwanga in his FY 2020/2021 report.
“I noted the ministry received off-budget financing to a tune of Shs 23.049 billion not declared to treasury and, therefore, not appropriated to the entity by parliament. These funds were received directly from development partners,” says Muwanga.
The money in question was received from United States California University to support seismological data collection under the directorate of geological survey and mines and others. The other money came from the United Nations Development Programme (UNDP) global environment facility (Shs 1.09 billion) to support integrated waste management and biogas, and Egypt (Shs 21.8 billion) for solar powered plant to be installed in Busitema.
Muwanga says that off-budget financing distorts planning and may result in duplication of activities and is contrary to the Public Finance Management Act.
In the event that an external agency provides funds to a government entity in the course of implementation of the budget or any funds remain unspent at the expiry of an appropriation, the entity is required to declare and a supplementary issued in line with the Public Finance Management Act, 2015.
Sections 36 (6), 43 and 44 (20) of the act requires all the public resources including external financing to be paid into the consolidated fund and once deposited. The law also requires an accounting officer to ensure that all planned development partner disbursements are included in the vote budget estimates.
In her response to the MPs, PS Bateebe said that funds received from California University do not form part of grants received by the ministry but they were instead treated as deposits received by the ministry.
“These funds were for the seismic station at Mbarara which is jointly owned by the California University and the ministry as per the memorandum of understanding. UNDP Global Environment Facility project is fully sponsored by UNDP, operates outside the Integrated Financial Management System (IFMS), and prepares financial statements that are audited by auditors appointed by UNDP as per the project document,” Bateebe explained in part.
Regarding the Shs 21.8 billion from Egypt, she told the committee that this was a grant of solar equipment from Egypt for 4 Megawatt Solar Plant at Busitema University. Bateebe said that this equipment was received during the closure of the financial year and that this is why no supplementary request was submitted to the secretary to treasury.
Eddie Kwizera, the Bukimbiri County questioned whether these budget items had no funds provided by government. John Amos Okot, the Agago North said that no explanation from the ministry justifies their failure to declare the donor funds.
Xavier Kyooma, the Ibanda North said that Shs 23 billion was not small money and dismissed the explanation by the ministry, saying it was not convincing. Emmanuel Mugunga, the former permanent secretary at the ministry said that the Shs 21.8 billion captured under Egypt for solar powered plant to be installed in Busitema was an in-kind donation with no direct cash involved.
But MP Kyooma said that this does not make the auditor general’s observation wrong since this remains an asset and should have been reported for a supplementary to be made. Bateebe further told the committee that when the solar equipment was received, they got a competitive value that they attached to them.
The committee directed the ministry officials to provide the grant offer document for the solar plant, importation documents and other documents regarding the funds by Monday.