Economic Diversification and Growth

tracts, including payments for goods or services that were
not delivered. The quality of contract management is weak.
Often established procedures are not implemented and only
21 percent of contracts have complete procurement records.
eral’s special investigation report on OPM, more needs to
be done to address the lack of integration between accounting
and budgeting systems, which leads to weak controls
on the release of funds due to numerous manual interventions
and lack of proper reconciliation (OAG 2014). Some
of the most significant risks of wastage, errors, delays and
fraudulent losses are found in payroll and pensions management.
The government is committed to rolling out the
Integrated Payroll and Pension System (IPPS), interfacing
IPPS with IFMS, introducing biometric payroll records for
civil servants and decentralization of the payroll to improve
accountability.
5.28. Through the PFM reform program (FINMAP),
the government is committed to completing the roll
out of IFMS to all entities over the next 3–4 years. IT
audits are also stepped up to tackle system weaknesses (like
use of passwords, assignment of responsibilities, defense
against cyber attack,...) These issues will be addressed by
Audit House, the
headquarters for the office
of the Uganda Auditor
General, on Apollo Kagwa
Road in Kampala
a strengthened internal audit system, which has been granted
more independence and a Directorate status in the new
PFM Act. There is a need to ensure that the roll outs of
these fiduciary systems are properly understood and implemented,
through increased monitoring, reviews and audits.
Additional change management training, sensitization and
communications will ensure that responsibilities are well
understood. More regular monitoring and more effective
incentives and sanctions will also improve compliance.
5.29. Public Procurement. Around 70 percent of public
expenditures go through procurement systems that are critical
for effective service delivery, but are affected by poor
practices. Unpredictable and late release of funds can either
lead to under-spending or to rushed spending at year-end,
making procurement less competitive and more costly.
This has been identified as a key obstacle to efficient use
of available funds, which affects the credibility of the budget.
Furthermore, there is evidence of wastage within con-
5.30. There is evidence of improvement in the performance
of the contracts audited by PPDA (in FY 2013, 46
percent of contracts were rated satisfactory compared
to 27 percent in 2011). Reforms aimed at better budget
planning and predictability should improve procurement
practices. Nonetheless, ongoing efforts should be considerably
strengthened and extended more widely across all
government entities to improve the overall effectiveness
of procurement systems. One should find the right balance
between efficient and simple processes and effective controls
and transparency. The government is committed to
implement bulk purchases and standardized unit costs (to
realize economies of scale), and to enhance institutional
capacity for the management of the project cycle. It is also
assessing the feasibility and potential benefits of introducing
e-Procurement to improve reporting and transparency.
An e-Procurement system should be interfaced or integrated
with other systems, including IFMS, and accompanied
by change management to reap efficiency and compliance
benefits.
5.31. Quality and independence of oversight. Reforms to
enhance the independence of external audits improved the
quality of audits produced by the Office of the Auditor General
(OAG). The OAG was awarded the Swedish National
Audit Office Prize for the Best Performance Audit Report of
2013 and 2011. Audit findings are discussed more frequently
in the press and other forums, including the Parliament.
However, there is a significant backlog of audit reports that
are not debated in the Parliament. In addition reports are
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