Office of the Auditor General Faces Resource Gaps, Limits Audits

The Office of the Auditor General (OAG) is struggling with inadequate resources, which significantly hampers its ability to conduct comprehensive audits across the numerous entities under its purview. Officials from the OAG revealed to the Budget Committee that out of approximately 16,000 entities that require auditing, the office can only manage to audit around 4,500 due to these limitations.

During a meeting chaired by Hon. Amos Kankunda, the OAG officials addressed concerns raised by MPs, particularly regarding the substantial recoverable costs claimed by oil companies operating in the Albertine region. Assistant Auditor General, James Bantu, assured the committee that the OAG does indeed audit these claims, a critical point given that the reported recoverable costs have surged to approximately US$3.1 billion.

This figure sparked questions from MPs like Hon. Gyaviira Ssebina Lubowa, who highlighted the significant increase from a previous estimate of US$935 million. Lubowa sought clarification on the audit process and the composition of this substantial sum, expressing concern that inflated costs could diminish Uganda’s future petroleum revenues.

Bantu explained that oil companies submit annual compilations of their exploration and drilling expenditures, which the OAG scrutinizes against legal and contractual frameworks. He emphasized that these recoverable costs are expenditures intended to be recouped once oil production generates revenue.

The committee also inquired about the OAG’s capacity to audit Uganda’s Charter of Fiscal Responsibility. Bantu confirmed that all five objectives outlined in the Charter, including public debt, fiscal balance, and petroleum management, are auditable and have been part of previous audits. The OAG is considering a proposal to issue a consolidated annual assessment of the government’s performance against these fiscal objectives, offering recommendations for improvement.

The meeting underscored the need for enhanced resources at the OAG to fulfill its mandate effectively and safeguard national financial interests, especially in light of the impending oil production and the associated revenue management complexities.

Source: Parliament of Uganda