The Committee on Commissions, Statutory Authorities, and State Enterprises (COSASE) has raised concerns regarding the Uganda Revenue Authority’s (URA) retention of funds. These concerns were brought up during a meeting between the committee and the Office of the Auditor General to discuss queries raised in the Auditor General’s report for the fiscal year ending June 30, 2022.
Molly Kirungi, a Principal Auditor at the Office of the Auditor General, informed the committee that, based on the approved budget, URA was supposed to receive Shs534 billion, which was fully allocated except for an unspent amount of Shs34.7 billion from the previous year that was retained by the organization.
While the Auditor General confirmed that URA had obtained authorization from the finance minister to retain the mentioned funds, the Auditor General’s report revealed that out of the total funds of Shs568 billion received during the fiscal year, URA spent Shs443.79 billion, resulting in an unspent balance of Shs125 billion.
The committee members argued that the Public Finance Management Act requires clearance from Parliament for the retention of unspent funds. However, the Office of the Auditor General informed the committee that the URA Act allows the authority to retain funds with permission from the Secretary to the Treasury.
Concerns were raised by Hon. Gerald Nangoli, the MP for Elgon North County, about URA potentially bypassing Parliament’s appropriation powers. He questioned why URA had the mandate to retain unspent balances when the Public Finance Management Act mandates that all unspent balances are automatically returned to the Consolidated Fund by June 30.
Hon. Nathan Itungo, the MP for Kashari County South, requested clarification on the observation made regarding the retention of funds. The officials from the Auditor General acknowledged it as an issue but classified it as an unqualified opinion.
The committee chairperson, Hon. Joel Ssenyonyi, who is also the MP for Nakawa Division West, stated that URA would need to explain the unspent balances and the issue of their retention. He emphasized that Parliament is responsible for appropriations, and every entity submits its budget for scrutiny and approval. Ssenyonyi expressed concern about additional funds that were not planned for.
Ssenyonyi mentioned that the committee would seek clarity on whether the Public Finance Management Act should supersede the URA Act, considering that URA can retain funds after obtaining approval from the finance minister. The committee also discussed the possibility of engaging with officials from the finance ministry to address this matter.
A meeting with officials from URA is scheduled to take place on Tuesday, July 11, 2023, where these concerns will be further discussed.
