MPs fault URA for non-disclosure of donor funds

The Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) has faulted the Uganda Revenue Authority (URA) for non-disclosure of the sources of funding and off-budget financing.

According to Section 44(1) of the Public Finance Management Act (PFMA) 2015, the Minister of Finance, Planning and Economic Development is required to receive all monetary grants made to the government or a vote by a foreign government, international organisation or any other person.

The Treasury Instructions 2017 requires an accounting officer to ensure that all planned development partner disbursements under his or her vote are included in the vote budget estimates that are appropriated by Parliament.

However, during the committee meeting with URA officials on Tuesday,11 July 2023, the committee discovered that the authority received project funds worth Shs101.5 million directly from United Nations Capital Development for undertaking specific activities.

In addition, the authority also received funds worth Shs420 million from the World Bank but no information was provided to show that these funds were budgeted and appropriated by Parliament.

According to the Auditor General, the failure to fully budget for all funds distorts budget management, creates a risk of multiple financing and therefore, a breach of the law.

Kasese Municipality Member of Parliament, Hon. Ferigo Kambale questioned where URA gets the mandate to spend money from donors without approval.

He said that URA management needs to include the money in their budget as soon as the agreements are signed.
“Even if the agreements had not been signed by the time of preparing the budget and you, later on, realised that the money was supposed to come, that would also cause a justification for preparing a supplementary budget to be approved by the Parliament of Uganda,” he said.

Hon. Mpindi Bumali (Indep., PWDs) said that it is a bad sign for the tax authority to fail to declare money collected from donors, and yet it collects taxes from Ugandans.

He questioned the credibility of the amount of taxes collected.

“Are we sure that our money is not spent on the source, because they declare what they collected, so it means they can also declare less and spend other money on their own?” Mpindi said.

According to their response given to the Auditor General then, URA explained that they will adhere to all laws and policies while obtaining any external financing going forward.

The Chairperson of Cosase, Hon. Joel Ssenyonyi said that external financing should have been part of URA’s budget submitted to Parliament.

He said that as an entity, even with clearance from the Ministry of Finance, they do not have the authority to receive money from anywhere outside the authority of Parliament.

“Parliament is meant to appropriate money which is collected by URA to different entities but also any loans, grants and so on; they are to the government of Uganda and with specificity to an entity,” he said.

However, Commissioner General URA, John Musinguzi Rujooki stated that indeed they will take a step back and look at whether they captured the funding in their budget for the financial year 2019/2020.

“Should we find we did not, then we will take the advice of the hon. Members and we will do that going forward. I think we could have easily been under the impression that it is either loans that have to be paid back or a consolidated vote that must go through Parliament,” he said.

When asked to present documents supporting clearance from the minister and details of the grants, the authority stated that some of the documents were lost.

“That was unfortunate, and as the Commissioner of Finance has explained, maybe some of these documents were lost in transition because these are documents that were kept within the legal department. We apologise for the fact that the finance team that was dealing with the auditors did not avail these documents,” said Patience Rubagumya Tumusiime, Head of Legal at URA.