PRESENTER BY NYERO PASKA DISTRICT INTERNAL AUDIT – GULU DISTRICT LOCAL GOVERNMENT.

TOPIC: FRAUD DETECTION AND PREVENTION. CASE STUDY: NATIONAL AGRICULTURAL ADIVISORY SERVICES (NAADS) IMPLEMENTATION IN GULU MUNICIPALITY. REF: STATUTORY INTERNAL AUDIT REPORT 2010/2011 FINANCIAL YEAR. Gulu District Local Government

BACK GROUND. NAADS is a programme designed by government to target the local communities at parish and village levels in our local settings. Government came up with this programme with the aim of empowering the communities by providing farm implements, improved seeds, animals, birds etc depending on the needs identified by the communities. The programme is community driven and the power of needs identification, beneficiary selection and procurement of all supplies vest with the communities. The district and Municipal council authorities only guide the processes, monitor implementation and also offer technical back stopping through the extension services. The audit department is there to assure, the NAADS implementation guidelines are adhered to and internal controls are effective and assure value for money for public funds. Gulu District Local Government

STRUCTURE OF LOCAL GOVERNMENT SETTING Gulu District Local Government CENTRAL GOVERNMENT DISTRICT LOCAL GOVERNMENT MUNICIPAL COUNCIL DIVISIONS PARISHES VILLAGES

FUNDS FLOW ARRANGEMENT Gulu District Local Government NAADS SECRETARIAT GULU DISTRICT GENERAL FUND ACCOUNT GULU DISTRICT NAADS ACCOUNT DIVISION NAADS ACCOUNTS

FUNDS FLOW ARRANGMENT NAADS SECRETARIATE DISTRICT LOCAL GOVERNMENT DISTRICT NAADS ACCOUNT DIVISION NAADS ACCOUNT Gulu District Local Government

AREA/ISSUESAUDIT FINDINGSACTION LINE RECOMMENDATIONS TO MANAGEMENT ON UNCLEARED ISSUES Farmer selection process  Relatives of local councils are selected to benefit other than the venerable communities.  Gender issues not considered as per the NAADS implementation guidelines  Demand for files for farmers’ selected and verify with the local authorities on the ground to confirm participation of all members of the communities.  Confirm whether mobilization was done by the leaders during the selection process.  Were the guidelines have not been followed, the selection must be nullified and the process repeated. Unspent balances  Unspent balances not returned to the treasury at the end of the financial year.  Demand for evidence of refund of unspent balances to the treasury.  Unspent balances to be remitted back to the treasury and authority for use must be given by the centre as required. Accountabilty  Funds not accounted for interms of receipts, signatures, payment schedules of participants etc.  Demand for the accountabilities in all forms.  Funds be recovered from the responsible officers. Gulu District Local Government

cont………. Unsupported expenditures  Funds spent on various activities are not supported with the relevant documentations like, minutes of meetings, attendance list of participants in training, activity reports, letters of contract awards and agreements signed with suppliers, distribution lists of items to the farmers.  Demand for all the relevant supporting documents stated for verification.  All funds not dully supported with the necessary documentations must have not been used for the intended purposes and should be refunded back by the responsible officers. Taxes  Taxes provided for well posted in the books of accounts but not remitted to the authorities.  Demand for evidences of tax remittance to the authorities  Any financial loss caused in terms of penalties due to non compliance to the laws must be borne by individuals who caused the loss.  All the unremitted taxes must be remitted as required by law Gulu District Local Government

Village level procurements(p rocurements handled by the village procurement committees  Lack of proper documentations of the procurement processes in terms of minutes and attendance lists.  Supplies are not inspected by the sector specialist ie either veterinarian, agriculture extension officers to confirm order against quotations like age of animals and birds, type of seeds and quality.  Internal auditors do not witness deliveries of supplies as a control measure to confirm delivery, quantity and quality.  Inflation of prices like for animals procured  Procurement committees do not witness the deliveries of supplies as required by NAADS implementation guidelines.  Demand for all documentations that are required for community procurements.  Demand for inspection reports from the sector specialist confirming the right delivery has been made.  Demand for deliveries notes well signed by internal audit staff.  Compare price list issued by the procurement unit at the district against what they quoted.  Demand for lists of procurement committees and conduct field verifications during audit to confirm the right people on the committee have signed the documents as witnesses  Conduct field physical verifications to confirm supplies.  The committee be held for defrauding the process and causing financial loss to the division  Any loss caused by lack of inspection must be recovered from the responsible officers.  All deliveries to verified by the auditors as clearly stipulated in the guidelines  Any loss caused as a result of over inflation must be recovered from the responsible officers.  Any supplies not witnessed by the village procurement committee is not valid and proper explanation be given or action of refund of money be taken from the responsible officers. Gulu District Local Government

Unauthorized payments  Funds used for implementation of programme not authorized by the senior assistant town clerk at the division ( principal signatory)  Demand for explanations from management  Funds must be refunded back by the responsible officers. Work plan implementation  Activities outside the approved work plans implemented.  Demanded for explanations from management  Funds were recovered from the responsible officers. Un authorized sale of enterprises by the farmers.  Animals especially goats and farm implements like ox- plough were sold by farmers for financial gains against the NAADS guidelines.  Demanded for explanations from management and the farmer.  The responsible farmer was arrested and should replace back the enterprise sold.  Other benefits extended to that farmer be re-located to other needy members of the community. Gulu District Local Government

Lastly, I would like to share with the participants that, the recommendation that we made to management has greatly improved the way the programme is now implemented in the divisions in Gulu Municipality.  The Gulu District Local Government Public accounts committee an equivalent of the Audit Committee in the Private sector played it’s oversight roll so well and made management to act on our recommendations.  The office of the Resident District Commissioner also played a big role to ensure our recommendations are acted upon by management.  The Municipal councilors also followed up on how the divisions implemented our recommendations.  The office of the Auditor General also used our report to make follow-up during their annual audit and this has helped a lot in improving the situation the ground. Gulu District Local Government

STEPS IN THE COMMUNITY PROCUREMENT PROCESS Gulu District Local Government Description Activity Responsibility 1. PROCUREMENT PLANNING Based on participatory planning at the sub county. - Consult community members and identify requirements/specificat ions, quantities, prices, procurement schedule Parish community Procurement committee (PCPC), supported by NAADS Sub county coordinator and subject matter specialist 2. ISSUE REQUEST FOR QUOTATIONS BASED ON SPECIFICATION - To at least 3 bidders for local shopping - To single bidder for Direct procurement. Parish Community Procurement Committee (PCPC)

STEPS IN THE COMMUNITY PROCUREMENT PROCESS Cont.. Gulu District Local Government 3 - EVALUATE QUOTATIONS Analyze quotations select lowest evaluated bidder( meeting specifications and lowest evaluated price) Parish Community Procurement Committee (PCPC) 4 -AWARD CONTRACT  Announce the award to all bidders  Send a report of decision of award to Assistant Town Clerk  Receive a letter of acceptance from successful bidder Parish Community Procurement Committee (PCPC)

STEPS IN THE COMMUNITY PROCUREMENT PROCESS Cont….. Gulu District Local Government 5- PLACE CONTRACT -Issue purchase order for goods (farm inputs & technologies) Assistant Town Clerk PCPC 6 RECEIVE GOODS (FARM INPUTS & TECHNOLOGIES) & ENSURE THEIR DISTRICTBUTION -Check quantity and quality -Obtain delivery note, -Witness delivery Parish Community Procurement Committee (PCPC), Beneficiaries, Internal Auditor/SMS where necessary

STEPS IN THE COMMUNITY PROCUREMENT PROCESS Cont….. Gulu District Local Government 7- PAY SUPPLIER- Pay supplier Assistant Town Clerk PCPC 8 – KEEP RECORDS - Maintain procurement files Assistant Town Clerk PCPC

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