Kosolo notes that they have established that the growth of many of microfinance institutions is being hampered by high costs, part of which are incurred in sourcing external audit services that necessitates setting limits.
The Finance Ministry
is considering introducing a policy that sets standard rates for private audit
firms that provide services to microfinance institutions.
The Microfinance State
Minister, Haruna Kyeyune Kasolo, says the ministry is concerned about the exorbitant
costs microfinance institutions are incurring to procure external audit
Kosolo notes that they have established that the growth of many of microfinance
institutions is being hampered by high costs, part of which are incurred in
sourcing external audit services that necessitates setting limits.
According to Kasolo,
due to high operational costs, the microfinance institutions are y transferring
the burden to members through high interest rates on credit facilities hence
failing to meet their intended objectives.
He explains that they
are working out a policy that will set a maximum cost at which private audit
firms will offer services to SACCOs.
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According to Kasolo, the ministry has also learnt that some unscrupulous
managers are conniving with auditors to cook-up audit reports to cover-up their
financial mismanagement practices.
He however, says plans
are underway to empower Uganda Microfinance Regulatory Authority-UMRA with an
independent audit department to conduct spontaneous audits on SACCO, as a way of
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Swaibuh Makumbi, one of the delegates of Masaka Elder’s SACCO is optimistic
that once adopted, the policy will save them suspicious expenses that are usually
negotiated by the audit firms, board of directors and managers.
He also adds that the proposal to have independent auditors sent in by the ministry
will also address the syndicate corruption by management bodies who are usually
the ones under question.
But Charles Kilibo, a Senior Auditor with Felbright and Company Auditors, who
recently audited Masaka Elders’ SACCO at Shillings 10 million, noted that fees
are charged based on the scope of work available.