URA under spotlight for retaining funds without Parliament approval

The Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) has expressed concern over the Uganda Revenue Authority's (URA) retention of funds.

The issue came to light on Monday, 10 July 2023, during the committee's meeting with the Office of the Auditor General regarding the tax collector's queries raised in the Auditor General's report for the financial year ending 30 June 2022.

While presenting before the committee, Molly Kirungi, a Principal Auditor at the Office of the Auditor General, informed the committee that, according to the approved budget, URA was supposed to receive Shs534 billion, which was fully allocated except for the unspent amount of Shs34.7 billion from the previous year that was retained by the entity.

The Auditor General confirmed that URA had obtained authorisation from the finance minister to retain the mentioned funds. However, the Auditor General's report stated that out of the total available funds of Shs568 billion received during the financial year ending June 2022, the entity spent Shs443.79 billion, resulting in an unspent balance of Shs125 billion.

"The unspent funds were not returned to the Consolidated Fund as required by the Public Finance Management Act," reads the Auditor General's report.

Members on the committee argued that the Public Finance Management Act stipulates that clearance from Parliament is required to retain unspent funds.

However, the Office of the Auditor General informed the committee that, according to the URA Act, the authority is allowed to retain funds with the permission of the Secretary to the Treasury.

Hon. Gerald Nangoli, the MP for Elgon North County, expressed concerns about URA usurping the appropriation powers of Parliament.

"Is the PFMA selective? Because, as far as I know, by 30 June, it is automatic in the system that all unspent balances are swept back to the Consolidated Fund. How is it so special with URA that they have the mandate to retain unspent balances?" he questioned.

Hon. Nathan Itungo, the MP for Kashari County South, requested clarification from the team of the Auditor General on the observation made regarding the retention of funds.

The officials from the Auditor General stated that they noted it as an issue, although they classified it as an unqualified opinion.

The committee chairperson, Hon. Joel Ssenyonyi, also the MP for Nakawa Division West, said URA would need to explain the unspent balances and the issue of retaining them.

He said: "Our concern, which the entity will have to address, is that Parliament is responsible for appropriations. Every entity submits its budget, and then Parliament scrutinises it, makes suggestions, and eventually approves the appropriated budget. If there is anything extra, we wonder why it was not planned for."

Ssenyonyi added that the committee would seek clarity on whether the PMFA should supersede the URA Act, considering that URA can retain funds after approval from the minister. The committee also mentioned the possibility of engaging with officials from the finance ministry regarding this matter.

The committee is scheduled to meet with officials from URA on Tuesday, 11 July 2023.