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PAC Directs Mubende Hospital Off to Table Pension Payment Records

In his latest audit report, the Auditor General, John Muwanga considered payroll management in Regional Referral Hospitals a key audit matter and identified unrealistic budgeting for employees and pension costs, under absorption of wage funds, delayed access to the payroll, overpayment of salaries, non-payment of salary and pension arrears as cross-cutting risks.
Dr. Alex Adema, the Mubende Hospital Director with Badru Buyondo the Principal Human Resource Officer before PAC.

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The Public Accounts Committee (PAC) - Central Government has directed Mubende Regional Referral Hospital officials to produce a list of pensioners they paid the last financial year 2020/2021 following inconsistencies in their payroll management.

The PAC Committee Vice-Chairperson, Asuman Basalirwa, made the directive during a meeting with the officials led by the Hospital Director, Dr. Alex Andema on Tuesday. This followed irregularities in the expenditure of Shillings 7.32 billion availed for the hospital’s wage and pension budget. This money constituted 64.8% of the Hospital’s total budget of Shillings 11.29 billion for the financial year 2020/2021.

Out of the Shillings, 7.32 billion wage budget, Shillings 5.17 billion was spent and the unabsorbed balance of Shillings 2.15 billion was sent back to the Consolidated Fund. The under absorption of the money was attributed to the failure to recruit more staff due to the COVID-19 pandemic.

In his latest audit report, the Auditor General, John Muwanga considered payroll management in Regional Referral Hospitals a key audit matter and identified unrealistic budgeting for employees and pension costs, under absorption of wage funds, delayed access to the payroll, overpayment of salaries, non-payment of salary and pension arrears as cross-cutting risks.

MPs queried the wrong computation of gratuity benefits reported by Muwanga in his report. He noted that the re-computation of gratuity benefits revealed that the hospital had wrongly computed the gratuity benefit for 1 pensioner although payments were fully effected within the year under review.

Documents before PAC indicate that a sum of Shillings 408.1 million was spent by the hospital on the gratuity of 10 pensioners. Basalirwa noted that the anomaly highlighted by the Auditor General was through sampling and there is a need to inquire further about all the gratuity payments made.

“We want the list of computation of the pensioners. What they were entitled to and what they received. This should come with the documents we have asked you to submit to us,” Basalirwa directed. He said that there is a risk of underpayment, overpayment, and unpaid gratuity.

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Xavier Kyooma, the Ibanda South MP wondered why the Hospital has to date not bothered to make corrections in its financial statement despite an observation by the Auditor General in their computations. Daniel Mangeni, the Hospital Accountant explained that the issue is of concern to them and that they would correct their accounts in their coming financials.

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The committee also queried the unauthorized loan deductions by the hospital on the salaries of their staff. The Auditor-General noted that the service agreement between the government and Uganda Consumer Lenders’ Association/ Uganda Bankers’ Association requires a letter of undertaking for each employee before making an employee reservation.

Muwanga also says that only deductions consented to by the employees, in writing, should be submitted to the Ministry of Public Service for timely monthly payroll processing or as advised by the employer.  “I noted that 8 employees were not in ‘my approval report’, but were in ‘active deduction report’, while 39 employees were not in active deduction report, but were in my approval report,” Muwanga reported.

He also observed that 21 employees had inconsistencies between the loan amounts in the Integrated Personnel and Payroll System (IPPS) and the active deductions.  He noted that there is a risk of making deductions from staff that have no loans, which deprives them of their hard-earned funds. Basalirwa told the Mubende hospital officials that when they make any irregular deduction from the employee's account, they will be held liable and required to pay. 

Documents submitted to the committee indicate that Shillings 124.5 million had been deducted in form of loan repayments from staff. In response, Dr. Andema said that these anomalies were caused by system-related challenges. Also reported by the Auditor General are the delayed remittances of deductions to Uganda Consumers Lenders’ Association/Uganda Bankers Association. 

“I noted that the hospital made payroll deductions of Shillings 151 million, but didn’t remit concurrently with the salary payments in 6 out of 12 months. On average, it was delayed by 32 days,” said Muwanga. Dr. Andema told the committee that the hospital management currently ensures that all deductions are remitted to the respective organizations as required. 

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