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1VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
OFFICE OF THE AUDITOR GENERAL
T H E R E P U B L I C O F U G A N D A
M A R C H , 2 0 1 3
VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT
TO SACCOs BY THE RURAL FINANCIALSERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
www.oag.go.ug | E-mail: [email protected]
T H E R E P U B L I C O F U G A N D A
VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT
TO SACCOs BY THE RURAL FINANCIALSERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
MARCH, 2013
OFFICE OF THE AUDITOR GENERAL
OFFICE OF THE AUDITOR GENERAL
20th June, 2013
The Rt. Hon. Speaker of ParliamentParliament of UgandaKampala
VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM (RFSP)
In accordance with Article 163 (3) of the Constitution, I have undertaken a VFM audit on The Capacity Building Support to SACCOs by the Rural Financial Services Program and hereby submit this report.
My office intends to carry out a follow – up at an appropriate time regarding actions taken in relation to the recommendations in this report.
I would like to thank my staff: The Director, Mr. Stephen Kateregga and Assistant Director Ms. Liz Nambuya; and team Mr. Bob Monday – Senior Principal Auditor, Mr. Paul Rwabutara - Principal Auditor, Mrs. Suzanne Alum Opio - Senior Auditor, and the two auditors, Mr. Sam Ssemugooma and Ms Sheila Ngira who undertook this audit. I would also like to thank the staff of Ministry of Finance, Planning and Economic Development, and the RFSP implementating agencies for the assistance offered to my staff during the period of the audit.
John F. S. MuwangaAUDITOR GENERAL
AUDITOR GENERALAUDITOR GENERAL’S MESSAGE
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TABLE OF CONTENTS
i
List of Tables ………………............................……….................................…………………………………… iiList of Pictures ……………..................................…………………………………………………….................. iiList of Figures ………………………………..................................……………………………......................... iiAbbreviations …………………………................................................................................................ iiiExecutive Summary ................................................................................................................. iv
CHAPTER 1INTRODUCTIONBACKGROUND .......................................................................................................................... 21.1 Motivation ..................................................................................................................... 21.2 Description of the Audit Area ..................................................................................... 31.2.1 General Description ..................................................................................................... 31.2.2 Legal Framework ......................................................................................................... 31.2.3 RFSP Vision .................................................................................................................. 41.2.4 Objective and Activities ................................................................................................ 41.2.5 The Organization Structure ......................................................................................... 41.2.6 Funding ......................................................................................................................... 41.3 Audit Objectives ............................................................................................................ 51.4 Scope ............................................................................................................................ 5
CHAPTER 2AUDIT METHODOLOGY2.1 Sampling ...................................................................................................................... 72.2 Data Collection ............................................................................................................. 72.2 Data Analysis ............................................................................................................... 7
CHAPTER 3SYSTEM AND PROCESS DESCRIPTION3.1 Roles and Responsibilities of Key Players ................................................................. 93.2 Process Description .................................................................................................... 11
CHAPTER 4FINDINGS, CONCLUSIONS AND RECOMMENDATIONS4.1 Formulation of SACCO Regulation ............................................................................. 164.2 Provision of External Audit Services .......................................................................... 184.3 Establishment of SACCOs .......................................................................................... 194.4 Provision of kits (Basic & Advanced) .......................................................................... 204.5 Provision of Modular Trainings (Basic & Advanced) .................................................. 244.6 Funding ........................................................................................................................ 274.6.1 Utilization of IFAD loan ............................................................................................... 274.6.2 Disbursement of GOU Funds ...................................................................................... 284.7 Mentoring of Saccos ................................................................................................... 304.8 Programme Outreach, Usage and Sustainability ...................................................... 324.9 Performance Monitoring Tool Training by AMFIU ..................................................... 354.10 Computerization of The Cooperative Registry ........................................................... 374.11 Training in Cooperative Principles ............................................................................. 384.12 Support to SACCO Unions .......................................................................................... 39Glossary Of Terms .................................................................................................................. 41AppendicesAppendix i ........................................................................................................................... 42Appendix ii ........................................................................................................................... 43Appendix iii ........................................................................................................................... 45
VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
Table 1: RFSP funding for the period 2008/09-2011/12 ………………………………………............. 5
Table 2: Showing Provision of basic kits to SACCOs……………………………………………............ 21
Table 3: Showing Provision of advanced kits to SACCOs……………………………………............. 22
Table 4: Showing the period taken to deliver kits to SACCOs locations………………........... 22
Table 5: Showing undelivered equipment/kits in the stores……………………………….............. 23
Table 6: Showing Budget and Actual expenditures on basic …………………..…………............. 25
Table 7: Showing Annual budget performance IFAD Loan…………………………………............. 27
Table 8: Showing Delayed release of GOU funds to RFSP………………………………….............. 27
Table 9: Showing Annual Budget performance GOU………………………………………….............. 29
Table 10: Showing Annual Budget & Actual expenditures on Mentoring ………………........... 31
Table 11: Showing Monthly work load per FEW …………………………………………………............... 31
Table 12: Showing trends in Outreach & Usage Indicators………………………………….............. 33
Table 13: Showing trends in Reality check results……………………………………………….............. 34
Table 14: Showing Analysis of the Reality check Results…………………………………….............. 34
Picture 1&2: Showing generators & Motorcycles still in stores ……………………............………….. 23
Figure 1: Showing performance in provision of module training to SACCOs ………….......... 25
Figure 2: Showing disbursement of GOU funds to UCSCU 34 …………………………….............. 28
Figure 3: Showing budget performance of GOU funds ………………………………………............... 29
Figure 4: Showing Graph performance of technical assistance to SACCOs …........…………. 36
Figure 5: Showing Performance of Mentoring tools …………………………………………............... 36
LIST OF TABLES
ii
LIST OF PICTURES
LIST OF FIGURES
VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
ABBREVIATIONS
iii
AAG Assistant Auditor General
AG Auditor General
ADB African Development Bank
BOU Bank of Uganda
AMFIU Association of Microfinance Institutions in Uganda
DMF Department of Microfinance
DCM Department of Cooperatives and Marketing
DCO District Commercial Officers
FEW Financial Extension Workers
GoU Government of Uganda
IFAD International Fund for Agricultural Development
MDI Micro finance Deposit taking Institutions
MFI Micro Finance Institutions
MOFPED Ministry of Finance, Planning and Economic Development
MOU Memorandum of Understanding
MSCL Micro finance Support Centre Limited
MTIC Ministry of Trade, Industry and Cooperatives
OAG Office of the Auditor General
PAU Project Administrative Unit
PDU Procurement and Disposal Unit
PFA Prosperity for All
PMT Performance Monitoring Tool
RFSP Rural Financial Services Programme
RFSS Rural Financial Services Strategy
SACCO Savings and Credit Cooperative Organization
SHS Uganda Shillings
UCA Uganda Cooperative Alliance
UCCK Uganda Cooperative College Kigumba
UCSCU Uganda Cooperative Savings and Credit Union
VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
BACKGROUNDThe Auditor General is required under Article 163 (3) (b) of The Constitution of the Republic of
Uganda to conduct financial and value for money audits in respect of any project involving public
funds. This mandate is amplified by Section 21(1) of the National Audit Act 2008 which requires
the Auditor-General to carry out value for money audits for purposes of establishing economy,
efficiency and effectiveness in the operations of any department or ministry.
The Rural Financial Services Programme (RFSP) supports the Rural Financial services Strategy
(RFSS), which is one of the pillars of the Government vision of: “Prosperity for all”. The programme
is aimed at poverty eradication and ensures that every household in Uganda has a means to earn
a minimum living.
Accordingly, the Rural Financial Services Programme was formulated with an objective of increasing
outreach usage, and sustainability of financial operators (SACCOs) at the grass root level.
The Government of Uganda spent Shs.48.6 billion towards the Rural Financial Services Programme
(RFSP) in a period of four years, between the financial years 2008/09 and 2011/12.1
However, despite the substantial amount invested in the programme, the programme was only
able to achieve a target of 735 SACCOs and to-date, there are still many people in rural areas who
do not have easy access to financial services.
KEY FINDINGSFormulation of SACCO Regulations
One of the objectives of the RFS Programme was to contribute towards the establishment of a
regulatory framework that provides standards and guidelines for microfinance operations as well
as protecting the deposits and savings of members2.
Through document review and interviews with officials at MOFPED and RFSP, it was noted that in
the period FY 2008/09 to 2011/12, a total of shs.564,212,537 was spent by the Programme towards
the formulation of the Regulations, however, at the time of audit (January 2013), the Regulations
were not yet passed, they were still in Cabinet for discussion.
1 Financial Statements for 2008/09-2011/12.
2 RFSP Way forward document 2008-11.
EXECUTIVE SUMMARY
iv
VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
Establishment of SACCOs
According to the RFSP Project Document (Way forward) for the period 2008-2011, the programme
targeted to provide support for the establishment of SACCOs in sub-counties where none existed.
Accordingly, the RFSP Annual work plans for the FYs from 2008/09 to 2009/10 targeted to form 161
SACCOs in various sub counties.
It was revealed that out of the targeted 161 SACCOs, 111 SACCOs were fully established and they
had graduated to the start-up category, while 50 cooperative groups are still in the formation
process and had not taken off as fully registered SACCOs.
Provision of kits (Basic & Advanced)
According to RFSP Project Document (Way forward) for the period 2008-2011 and the annual
Work plans and Budgets , the Rural Financial Services Programme was supposed to procure and
provide the basic kits (safes, bicycles, filing cabinets, operation costs, calculators and stationery) to
selected SACCOs in start-up category and Advanced Kit (Computers, Motorcycles and generators)
to SACCOs in the strengthening category. Accordingly, a Memorandum of Understanding was
signed between RFSP and the Lead Implementing Agency (UCSCU) in which the RFSP was fully
responsible for the implementation of the procurement function under the intervention.
The review of financial records for the FY 2008/09 to 2011/12 indicated that a total of shs.7,142,006,506
(Advanced kits shs.1,506,378,886 and Basic kit shs. 5,635,627,620) was spent on procurement of
kits to be distributed to SACCOs. However, scrutiny of the annual performance reports of the
Programme indicated that there were delays in the provision/delivery of kits to SACCOs. For
instance, in the financial years 2009/10 out of 200 targeted SACCOs 63 (31%) received basic Kits
in the start-up category and out of 284 targeted SACCOs 74 (26%) received advanced kits in the
strengthening category. The kits were delivered past the expected days of delivery.
Provision of Modular Trainings (Basic & Advanced)
According to RFSP Project document (Way forward 2008-2011); The Rural Financial Services
Programme was supposed to provide the basic modular training and advanced modular Trainings
to SACCOs.
Through document review it was noted that from the FYs 2009/10 to 2011/12 a total of shs.1,761,397,947
was spent on providing modular trainings to SACCOs (Basic training shs.466,432,455 and advanced
training shs.1,294,965,492) by UCSCU. It was noted that the trainings were not conducted as
planned.
For instance in the financial years 2010/11 and 2011/12, out of 208, 316 and 322 planned advanced
module trainings to SACCOs, only 139 (44%) and 138 (43 %) were conducted, respectively. While in
the same years, out of 202 and 248 planned basic modular trainings only 51 (25.2%) and 63 (25.4%)
were conducted, respectively.
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VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
KEY RECOMMENDATIONS
1. The Ministry of Finance Planning and Economic Development (MOFPED) should coordinate the
activities of the various stakeholders, including Ministry of Trade, Industry and Cooperatives
(MTIC) and the Bank of Uganda (B.O.U), critical to the formulation of the regulations and
should expedite this process for effective regulation and supervision of SACCOs.
2. The Project Administration Unit (PAU) should ensure that the Lead Implementing Agency
(UCSCU) conducts adequate follow-up and mentoring visits to SACCOs in accordance to
annual work plans. The PAU should also ensure that UCSCU adheres to steps in SACCO
establishment.
3. Project Administration Unit should build its capacity in the Procurement and disposal Unit
(PDU) to ensure that the procurement of goods and services is carried out according to
properly drawn procurement plans to avoid unnecessary delays in the procurement process.
PAU should also constantly monitor and review the activities of UCSCU, including delivery of
kits to ensure that they are implemented according to work plans.
4. PAU should monitor the training activities of the Implementing Agencies and should ensure
that they have the capacity to effectively implement training activities as planned.
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1VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
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2VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
INTRODUCTION
BACKGROUND
1.1 MotivationThe Rural Financial Services Programme supports the Rural Financial services Strategy (RFSS),
which is one of the pillars of the Government vision of: “Prosperity for all”. The programme is aimed
at poverty eradication and ensures that every household in Uganda has a means to earn a minimum
living.
Accordingly, the Rural Financial Services Programme was formulated with an objective of increasing
usage, outreach and sustainability of financial operators (SACCOs) at the grass root level.
The Government of Uganda spent Shs.48.6 billion towards the Rural Financial Services Programme
(RFSP) over a four year period between the financial years 2008/09 and 2011/12.3
Although the project had achieved some progress, there remains much more to be done because
there are still many people in rural areas who do not have access to financial services.
While financial support is critical for social and economic advancement, overall, access to financial
services in Uganda is still low and mainly concentrated in urban areas compared to rural areas.
According to a national survey carried out in October 2010 on demand, usage and access to financial
services in Uganda, 30% of Ugandans have no access to any form of financial services. 42% have
access to informal financial services, 21 % use banks, while 7% have financial access through other
institutions such as Micro Finance Institutions (MFIs) and SACCOs4.
The study also indicated that usage of banks is higher in the urban areas (38%) than in the rural
areas (15%). Similarly, higher proportions of people in urban (9%) than in the rural areas (7%) use
other formal financial institutions that are not banks. However, the rural population (47%) uses more
informal financial services than those in urban areas (28%)5.
According to the Supervision and Implementation Support Mission/ Aide Memoire (May 2012), the
execution of the annual work plans for the RFSP as at 31st March 2012 was still very low at 37%,
which reflected the low rate of project execution by the implementing agencies, in particular, the
3 Financial Statements-2008/09-2011/12.
4 FinscopeUganda 2009 Report October 2010-by Steadman now synovate (U) Ltd.
5 ‘Finscope Uganda 2009’- Report October 2010.
CHAPTER ONE
3VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
of Microfinance in the Ministry of Finance,
Planning and Economic Development (DMF/
MOFPED).
In 2008, the Government signed a loan
agreement with the International Fund for
Agricultural Development (IFAD) to jointly
fund the programme with an objective of
increasing outreach, sustainability and
utilization of SACCO services by households
in rural areas.
The Programme is implemented through
Agencies, namely: Uganda Cooperatives
Savings and Credit Union (UCSCU) being the
lead Implementing Agency, Association of
Microfinance Institutions in Uganda (AMFIU),
Uganda Cooperative College Kigumba
(UCCK), the Department of Cooperatives
Ministry of Trade, Industry and Cooperatives
(MTIC) and the Uganda Cooperative Alliance
(UCA) and targeted 735 SACCOs.
1.2.2 Legal FrameworkThe Rural Financial Services Programame
operates under the Ministry of Finance,
Planning and Economic Development and the
Ministry derives its mandate and functions
from the 1995 Constitution of the Republic
of Uganda and other laws, including: the
Budget Act (2001), the Public Finance and
Accountability Act (2003) and Acts establishing
agencies and auxiliary organizations.
The Ministry of finance has a mandate to
formulate policies that enhance stability
and accelerate economic growth and
Association of Microfinance Association of
Uganda (1%), Uganda College of Commerce
Kigumba (8%), and Ministry of Trade, Industry
and Cooperatives(26%).6
Similarly, according to the Auditor General’s
financial audit report for the FY 2010/11, the
budget performance of RFSP for capacity
building was below 50%, and it was also noted
that 54% of the SACCOS benefitting from the
Rural Financial Services Programme (RFSP)
were not sustainable.
It is against this background that a value for
money audit was undertaken by the Office
of the Auditor General (OAG), on the Rural
Financial Services Programme under the
Ministry of Finance, Planning and Economic
Development: to assess its performance
in providing capacity building support to
SACCOs, identify challenges and recommend
to the management of RFSP the areas for
improvement.
1.2 Description of the Audit Area
1.2.1 General DescriptionThe Rural Financial Services Programme
was designed by the Government of Uganda
to provide capacity building support for
the development of rural financial services
infrastructure through the Savings and Credit
Cooperatives (SACCOs).The Programme is
managed by the Programme Administration
Unit (PAU) established under the Department
6 Aide Memoirs- May 2012
4VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
development, plan and design strategies for
rapid economic growth and transformation,
mobilize domestic and external resources,
monitor and account for the utilization of
public resources.
1.2.3 RFSP VisionThe Rural Financial Services Programame
shares the Vision of the Ministry of Finance,
Planning and Economic Development, which
is to be:
“A most effective and efficient Ministry of
Finance, Planning & Economic Development
that is capable of achieving the fastest rate
of economic transformation among the
emerging economies”.
RFSP Mission is:
“To develop a sustainable infrastructure of
Savings and Credit Cooperative Organizations
at every sub county in Uganda”
1.2.4 Objective and ActivitiesObjective
The main objective of RFSP is to increase
access to financial services in rural areas
by enhancing the outreach, sustainability of
SACCOs and Utilization of SACCO services by
poor rural households.
Activities
In order to achieve the above, there are several
activities carried out by RFSP. These include:
· Facilitate the establishment of new SACCOs
in sub counties where none existed.
· Facilitate Strengthening of existing SACCOs
and support them to expand outreach.
· Strengthen Apex Institutions which represent
the interest of SACCOs.
· Institute effective SACCO supervision and
regulation arrangements and contribute to
the establishment of a regulatory framework
to protect deposits and member savings.
· Promote regional SACCO networks and
encourage financial linkages.
1.2.5 The Organization StructureThe Permanent Secretary is the technical
head of the Ministry and is deputised by the
Deputy Secretary to the Treasury. The Under
Secretary is the Accounting Officer of the
Ministry of Finance, Planning and Economic
Development (MOFPED) and reports to the
Permanent Secretary. The Commissioner /
DMF reports to the Director in charge of
Economic affairs; who reports to the Deputy
Secretary to Treasury.
The Commissioner/DMF is deputised by an
Assistant Commissioner. The Programme
Coordinator RFSP reports to the Assistant
Commissioner/DMF.
The Programme Administrative Unit of RFSP
is headed by the Programme Coordinator who
is assisted by the Operations Manager and an
Administration Manager. The Administration
Officer, Financial Controller, Procurement
Officer and the Monitoring and Evaluation
Officer report to the Administration Manager.
While the Programme Support Officer reports
to the Operations Manager. Details of the
organisation structure are shown in Appendix
(i).
1.2.6 FundingThe Rural Financial Services Programme is
funded by the Government of Uganda (GOU)
and the International Fund for Agriculture
Development (IFAD). Over the years FY
5VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
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2008/09 to FY 2011/12, RFSP received a total of Shs.48.6 billion from GOU and IFAD. Details of
funding by source are as per Table: 1 below:
Table: 1 Showing RFSP funding for the period 2008/09 to 2011/12 in billion shillings
Source/FY
2008/09 2009/10 2010/11 2011/12 TOTAL
GOU 8.64 6.71 4.07 6.27 25.69
Donor/IFAD 3.45 4.58 8.74 6.14 22.91
Total 12.09 11.29 12.81 12.41 48.6
Source: RFSP Financial statements
1.3 AUDIT OBJECTIVESThe major objective of the audit was to review the performance of the project and specifically
establish whether the project met its targets with regard to:
· The establishment of new SACCOs in targeted sub counties where none existed.
· Strengthening of existing SACCOs and supporting them to expand outreach.
· Strengthening of Apex Institutions which represent the interest of SACCOs.
· Instituting an effective SACCO supervision and regulation arrangement and contribution to the
establishment of a regulatory framework to protect deposits and member savings
· Supporting the promotion of regional SACCO networks and encouraging financial linkages
1.4 SCOPEThe audit was undertaken at the Rural Financial Services project at the Ministry of Finance,
Planning and Economic Development and covered a period of four (4) financial years (FY) from
2008/2009 to 2011/2011 with particular focus on the establishment and strengthening of SACCOs
and APEX institutions ,SACCO supervision and regulatory arrangements.
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7VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
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AUDIT METHODOLOGY
The audit was conducted in accordance with the International Organization of Supreme Audit
Institutions (INTOSAI) Auditing Standards and guidelines in the Office of the Auditor General (OAG)
VFM manual. The standards require that the audit is planned in a manner which ensures that an
audit of high quality is carried out in an economic, efficient and effective way and in a timely manner.
2.1 SamplingThe sampling method used was stratified
random sampling. Eight (8) out of eleven (11)
UCSCU Regional areas of operation were
sampled for this study. The regional areas
were selected based on the overall distribution
and performance of SACCOs in the country.
The sampled districts visited were randomly
selected, from the regional areas of operation
and these included: central region (Kampala,
Wakiso, Mukono); Victoria Masaka region (
Masaka, Lyantonde); Ankole region (Mbarara,
Bushenyi Ntungamo);Bunyoro region
(Masindi, Kiryandongo); West Nile region
(Arua, Nebbi); Lango region (Lira, Oyam);
Eastern region (Mbale, Budaka) and Busoga
region (Jinja, Iganga). Similarly, SACCOs were
stratified into category/stage of formation
(Start-up and strengthening category).
The sample of SACCOs visited within the
categories were randomly selected.
2.2 Data CollectionDocument review
The team reviewed documents to obtain
information relating to the operations of the
RFSP and its implementing agencies: the
key processes, roles and responsibilities
of key players, financial performance, and
the general performance of the whole
Programme for the period under review. The
details are shown in Appendix (ii).
Interviews
The team interviewed (126) officers at the
various entities, namely: the Department
of Microfinance – MOFPED, Department of
Cooperatives - MTTI, Rural Financial Services
Programme, and UCSCU Headquarters in
Maganjo. The team also interviewed officers
from SACCOs and the UCSCU regional offices
in Kampala, Iganga, Lira, Masaka, Arua,
Mbale, Mbarara and Masindi with a purpose
of assessing the performance of the entities.
Details of the people interviewed are shown in
Appendix (ii).
Inspection
Field visits were carried out at the UCSCU
Regional offices – Arua, Iganga, Lira, Mbale,
Masaka, Mbarara, Masindi, and Kampala
to ascertain the activities undertaken by
the programme. SACCOs were also visited
in various sub counties to assess their
operational status.
2.3 Data AnalysisAnnual Work plans and progress reports were
analyzed to assess the actual outputs against
planned targets of the programme; budgets
and audited financial statements were
scrutinized to establish whether the budgeted
amounts were availed and adequately utilised.
Records from SACCOs were analyzed in
order to corroborate data obtained from the
Programme headquarters.
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9VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
SYSTEM AND PROCESS DESCRIPTION
3.1 Roles and responsibilities of Key PlayersPermanent Secretary/ Secretary to
Treasury—MOFPED
The Permanent Secretary of MOFPED who
is also the Secretary to Treasury and is the
technical head of the Ministry is responsible
for policy implementation and overall
supervision of activities in the Ministry.
Undersecretary/Accounting Officer
The Undersecretary is the Accounting Officer
of the Ministry, his/her responsibility is to
facilitate policy formulation, effectively and
efficiently manage the Ministry’s physical,
human and financial resources.
Commissioner, Department of Microfinance-
(DMF/MOFPED)
The Commissioner is responsible for
overseeing policy formulation, developing
an appropriate regulatory framework that
provides standards and guidelines for
microfinance operations. He/she coordinates
and supervises the RFSP, and is charged with
the formulation of regulations for the tier four
financial institutions.
The Commissioner, Department of
Cooperatives and Marketing (DCM/MTTI)
The Commissioner is responsible for
the supervision and monitoring of all
cooperatives to ensure that they operate
within the established cooperative laws and
set objectives for the benefit of members.
In order to strengthen the cooperatives
department to fully execute its mandate, the
Cooperatives Department has an MOU with
the RFSP which stipulates that the RFSP
is responsible for providing funds to the
Department of cooperatives to enable it fully
update and computerize the SACCO Registry
and conduct district SACCO forums with the
assistance of District Cooperative Officers
(DCOs).
The Coordinator Rural Financial Services
Programme
The Coordinator is in charge of the overall
management, supervision and delivery of the
Rural Financial Services Programme.
She/he is charged with the leadership and
supervision role of the different sections
responsible for the implementation of the
RFSP and ensures proper management of
financial, human and technical resources of
the RFSP Programme.
The Coordinator is also responsible for
ensuring periodic reporting and effective
communication on the activities of the RFSP.
She/he is also a member of the planning and
organizing Management Committee.
Operations Manager-RFSP
The operations Manager is responsible for
ensuring that the Programme is effective on
the ground and targeted programme results
are achieved.
She/he coordinates between UCSCU, PAU
core management team and field officers on
all matters relating to the field operations and
relaying actions required of any section of the
RFSP.
10VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
Procurement Officer-RFSP
The procurement Officer is responsible for the
effective procurement of goods and services
under the Programme and ensures their safe
delivery.
She/he prepares periodic procurement
plans and institutes measures to expedite
procurement activities for effective
implementation of programme targets
stipulated in Annual Work Plans and Budgets.
The procurement Officer also supervises
the implementation of procurement
activities/contracts for purposes of ensuring
competition, transparency and achievement
of value for money objectives under the
Programme.
Finance Controller –RFSP
The Finance Controller is responsible for
providing financial services for effective
implementation of programme activities and
ensures modalities for accountable use of
Programme resources.
She/he also ensures timely disbursement
and replenishment of funds for effective
and efficient programme implementation
and provides financial services as well as
ensures modalities for the accountable use of
programme resources.
Monitoring and Evaluation Officer-RFSP
The Monitoring and Evaluation officer is in
charge of setting up and operationalizing the
monitoring and evaluation system for the
Programme.
The M & E works with the agencies managing
the components to design the format and
contents of the periodic reports and the
structure of impact and monitoring indicators.
She/he is in charge of gathering data for
performance measurement of programme
components, ensuring that all agencies
managing the components submit their
reports as required and take responsibility for
preparing appropriate sections and annexes
to the semi annual progress reports of the
PAU.
Uganda Cooperative Savings and Credit
Union Limited (UCSCU)
UCSCU is the lead implementing agency
of RFSP; it is a national apex organization
for Savings and Credit Cooperative
Societies (SACCOs) in Uganda. UCSCU is
responsible for SACCO development and
SACCOs represent the larger component
of Rural Financial Services Programme.
This Agency is responsible for mobilizing
communities to form new SACCOs, provide
capacity building to SACCOs and supervise
their performance.
The Association of Microfinance Institutions
of Uganda
The Association of Microfinance Institutions of
Uganda (AMFIU) is an umbrella organisation
of microfinance institutions (MFIs) in Uganda.
AMFIU has signed an MOU with the RFSP
to carry out performance monitoring tool
training, provide technical backstopping and
receives reports generated from SACCOs. In
addition, AMFIU supports the implementation
of Management Information System (MIS) in
selected SACCOs in accordance with agreed
work plans and budgets.
Uganda Cooperative Alliance (UCA)
UCA is an umbrella organization of
cooperatives, registered with the aim of
promoting the economic and social interests
of cooperatives in Uganda.
11VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
UCA is supported by RFSP to facilitate
strategic planning and provide periodic
mentoring support to existing SACCO Unions,
facilitate the process of registration for new
Unions that have applied, with priority given to
those that include Programme SACCOs.
Uganda Cooperative College Kigumba
(UCCK),
Uganda Co-operative College is a Tertiary
Education Institution funded by the
Government of Uganda. The college has
entered into an MOU with RFSP to conduct
training needs assessment among a selected
sample of Financial Extension Workers
(FEWs): District Commercial Officers (DCOs)
and Field Officers (FOs); and put together a
training programme to address the needs.
UCCK also provides short training courses
on SACCO principles, governance and
management to FEWs, DCOs and FOs and
part-time certificate and diploma courses to
90 SACCO managers and staff.
3.2 PROCESS DESCRIPTION
Policy and Regulation Formulation
The DMF is supposed to prepare and refine the recommendations and principles for regulation
and supervision of Tier IV Microfinance Institutions.
The department carries out consultations with the different stakeholders in the microfinance sector
and these include: district leaders, parliamentarians and officials in Microfinance Institutions and
Government. It also drafts policy guidelines and submits the drafts to Cabinet for discussion and
approval.
Budgeting and Funding
The Programme prepares annual work plans and budgets and submits them to the Department
of Microfinance for integration into the DMF’s budget. The DMF budget is then consolidated in the
MOFPED budget. RFSP is funded by donor /IFAD and GOU.
The request for GoU funds for the quarter is submitted to MOFPED in the last week of the previous
quarter, and funds are released by the first week of the quarter.
For Donor funds, IFAD channels its funds to RFSP through a Special Account opened with a float
of a minimum of USD One million; this amount is replenished depending on the frequency of
withdrawals and requests made. Withdrawal applications are made against the IFAD approved
budget and submitted through MOFPED to IFAD. Accountabilities of the last disbursement are
submitted with supporting documents by the PAU and approved by Treasury before replenishment
is processed and effected.
Disbursements to the agencies are effected on a quarterly basis based on their annual work plans
and budgets.
12VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
Support for SACCO formation
SACCO formation activities are supported by
Rural Financial Services Programme. . The
activity is supposed to begin by identifying
a sub-county where no SACCO exists, after
which community entry activities involving
mobilization, sensitization and training of
rural communities to elect a SACCO interim
committee are carried out by UCSCU- financial
extension workers (FEWs).
The FEWs then liaise with the District
Commercial Officer (DCO) to assist the
interim committee fulfill the requirements
for registration and subsequently register
as Savings and Credit Cooperative Societies
(SACCOs) with the Registrar of Cooperatives.
They also assist the formed SACCOs to: enroll
as UCSCU members in order to access support
from the Programme, and hold their first
Statutory Annual General Meeting.
Once local communities have been sensitized
and have proceeded to form and register their
SACCOs with the Registrar of Cooperatives,
and met the criteria for inclusion support
from RFSP, the programme is supposed to
provide basic training modules and a “Basic
Kit” that includes: a safe, two bicycles, 15
months of operating costs (rent and salaries
for three qualified staff), and refurbishment
and furnishing of premises, if required.
Support for SACCO Strengthening
The RFSP, in collaboration with UCSCU,
identifies SACCOs to be strengthened by
following laid down criteria. A SACCO qualifies
to be strengthened if it has been formed and
remains active through the first year, and
has met the minimum legal requirement for
a cooperative of holding an Annual General
meeting and providing an audited financial
statement to its members.
Additionally, SACCOs that have been duly
selected as the lead SACCOs in their sub-
country and meet the criteria for SACCOs
strengthening are selected by UCSCU staff for
programme support.
Qualifying SACCOs are assessed by the
programme in collaboration with UCSCU to
determine the appropriate combination of
support to be given in terms of equipment and
training.
After the assessment is done, the SACCO is
provided with an advanced kit, which includes:
1 computer, UPS, printer, 1 generator, 1
motorcycle, photocopier, MIS software, external
audit services, module trainings 1,2,3,4 & 5,
and customized trainings.
Strong SACCOs that need to increase outreach
and have credible business plans are also
availed with the advanced Kits, to enable them
reach unserved rural communities.
A flexible kit, which includes a mixture of items
selected from both the basic and advanced
kits, is also given to existing SACCOs, in order
to meet specific needs of the SACCOs.
Mentoring
SACCO mentoring is a routine activity to be
carried out by UCSCU field staff and Financial
Extension Workers (FEWs) on a monthly
basis. Technical assistance is provided to
SACCOs depending on the needs identified
and includes provision of skills in bookkeeping,
savings, member mobilization and training of
the SACCOs supervisory committees. Other
customized trainings tailored to the identified
needs are also conducted.
13VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
Strengthening of Apex Institutions
The Rural Financial Services Programme
identifies implementing agencies to support it
carry out its mandate under the RFSS. RFSP
then signs memoranda of understanding
with them. These implementing agencies
include: UCSCU, AMFIU, UCCK and UCA.
Guided by Annual Work plans and budgets,
RFSP then supports the agencies by providing
technical support and assistance in relation to
procurement of goods and services to enable
achievement of programme objectives.
Cooperative Training
The Uganda Co-operative College Kigumba
(UCCK) in collaboration with UCSCU is
supposed to select a targeted number of
UCSCU field Officers (FOs), Financial Extension
Workers (FEWs) and District Commercial
Officers (DCOs) and carry out a training needs
assessment of the officers and thereafter put
together a training programme to address
the identified needs. The trainings are to be
conducted on quarterly basis. Additionally,
UCCK is supposed to offer training in certificate
and diploma courses to SACCO managers and
staff.
Performance Monitoring Tool Training
The Association of Microfinance Institutions of
Uganda (AMFIU) is supposed to conduct training
of SACCOs in the use of the Performance
Monitoring Tool (PMT). Identification of the
target number of SACCOs is done followed
by a needs assessment in terms of computer
literacy of SACCO staff, availability of
computers/equipment and availability of power
supply at the SACCO.
After the training needs assessment,
computers and appropriate software are to
be provided by RFSP. The PMT data provides a
benchmark to assess the overall performance
of the SACCOs.
In addition, AMFIU is supposed to provide
technical back stopping/ monitoring of SACCOs
on a quarterly basis by offering technical
assistance to SACCOs where challenges are
met in the use of PMT. Furthermore, AMFIU
is supposed to implement the Management
Information System (MIS) software that would
enhance the use of PMT as well as financial
related information used by SACCOs.
SACCOs are supposed to generate reports
through the PMT and submit them to AMFIU
on a quarterly basis. The data is processed
at AMFIU and information is shared among
stakeholders.
Computerization of the Cooperative Registry
In order to strengthen the cooperatives
department to fully execute its mandate, the
RFSP has an MOU with the Cooperatives
Department to provide the required funding
to facilitate updating and computerizing the
SACCO registry.
The Department of cooperatives is supposed
to conduct a data collection exercise in
order to obtain up to date data on the status
of cooperative organizations in the country
including SACCOs.
RFSP is supposed to assist the cooperative
department to recruit a consultant to design a
data base so that all data collected is entered
into the computerized cooperative data base.
The data base is supposed to have information
that is up to date and easily accessible to
enhance monitoring & supervision.
14VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
Support to SACCO Unions
UCA is supposed to conduct mobilization and
sensitization of SACCOs to encourage them to
join SACCO Unions. In addition, a situational
analysis is done on the existing SACCO
Unions with a view of providing technical
support and periodic mentoring. After the
situational assessment, UCA is supposed to
select SACCO networks and assist them to
register with the Department of Cooperatives
to become Unions.
15VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
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16VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
4.1 Formulation of SACCO Regulation
One of the objectives of the RFS Programme was to facilitate the process of establishment of
a regulatory framework that provides standards and guidelines for microfinance operations as
well as protecting the deposits and savings of members7. Accordingly, the Ministry of Finance,
Planning and Economic Development planned to formulate the Regulation for the Tier 4 financial
Institutions, including SACCOs, by the end of the FY 2010/118.
Through document review and interviews with officials at MOFPED and RFSP, it was noted that in
the period of four years from FY 2008/09 to 2011/12, a total of shs. 564,212,537 was spent by the
Programme towards the formulation of the Regulations, however, at the time of audit (January
2013), the Regulations had not been put in place.
The Principles for the regulation of Microfinance Institutions was presented to Cabinet in 2011 and
a response received from the Cabinet Secretariat in July 2011. The DMF revised the proposals and
submitted it to the senior management of MOFPED in February 2012. Currently, the proposals are
before cabinet for consideration. It is unlikely that the programme will achieve this objective, given
that it is closing in June 2013.
Through interviews with officials at MOFPED and MTIC, it was noted that the delay was due to lack
of coordination between the key stakeholders in the microfinance sub sector, especially between
the Ministry of Finance, Planning and Economic Development and the Ministry of Trade, Industry
and Cooperatives, where SACCOs are currently regulated under the Cooperative Act.
Whereas the Ministry of Finance, Planning and Economic Development is in the process of
formulating the Regulation on the Tier 4 financial institutions, including SACCOs, the Ministry of
Trade, Industry and Cooperatives is in the process of consulting stakeholders and reviewing the
Cooperative Act and subsidiary laws on cooperative regulation. Similarly, the Bank of Uganda is in
7 RFSP Way forward document 2008-11.
8 MOFPED Ministerial Policy Statement, FY 2010/11
CHAPTER FOUR
17VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
the process of preparing amendments to the
MDI Act to cover the largest SACCOs.9
The absence of the Regulation for Tier
4 financial Institutions and SACCOs has
hindered effective regulation and supervision
of SACCOs. Currently, SACCOs face
challenges in recovering funds that have been
mismanaged or loaned to members.
Non-adherence to financial and governance
principles by SACCO management and staff
has also been attributed to the absence of a
regulation.
Interviews conducted with staff of 68
programme SACCOs sampled indicated
that 50 (74%) of the SACCOs were facing
challenges due to mismanagement of funds,
non-compliance with the legal requirements
of having an annual audit and Annual General
Meeting (AGM), non recovery of loans given out
to members; while 18 (26%) were operating
fairly.
Conclusion
The Regulation for Tier 4 financial
institutions, including SACCOs, is not yet
formulated, leading to ineffective regulation
and supervision of SACCOs, which in turn has
occasioned the challenges facing the SACCOs.
The delays in passing the tier four Regulations
present challenges for the attainment of value
for money on the Shs.564,212,537 so far spent
on the programme activity.
Management Response:
It is true that the law regulating Microfinance
institutions is not yet in place. However, the
9 Supervision and Implementation Support
Mission May 2012- Aide Memoire.
draft Principles and ensuing Regulations for
Tier 4 institutions have been prepared and
submitted to Cabinet.
The project funds meant for this activity
was invested in extensive consultations
with the various stakeholders, including;:
industry practitioners (SACCOs, Academia,
Researchers, Government agencies,
Local Governments, Non-Government
Organisations, etc), study visits,
consultancy support and consultations with
Parliamentarians.
While this process has taken time, it was inevitable to carry out wider consultations for purposes of gaining consensus and ownership of all the stakeholders.Currently, the Principles are before Cabinet for discussion. This will form the basis for drafting the necessary laws.
Auditor’s Comment:
Management’s efforts are acknowledged, but
the regulation is yet to be formulated.
Recommendation
The Ministry of Finance, Planning and
Economic Development should coordinate
the activities of the various stakeholders,
including Ministry of Trade, Industry and
Cooperatives and the Bank of Uganda, an
intervention that is critical to the formulation
of the Regulation, a process that should be
expedited for effective regulation, supervision
of SACCOs.
18VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
4.2 PROVISION OF EXTERNAL AUDIT SERVICES
According to the Memorandum of
Understanding between the Government
of Uganda and UCSCU, the RFSP was
supposed to provide support to SACCOs in
terms of providing funds for external audit
fees, which was included in the packages for
both the basic and advanced kits. The fees
were supposed to be paid to Certified Public
Accountants’ firms. Accordingly, the annual
work plans for FYs 2009/10 and 2010/11
identified 263 and 233 SACCOs in the start-up
category, respectively which were supposed
to receive this support. For the FY 2009/10,
50 SACCOs were identified for support in the
strengthening category.
A review of the annual reports for the FYs
2009/10 and 2010/11 prepared by RFSP
revealed that out of the 263 and 233
SACCOs(start-up category ) identified for the
support , only 91 (34.6%) and 18 (7.7%) SACCOs
received support respectively. While in the
FY 2009/10, only 20(40%) of the 50 SACCOs
identified for support in the strengthening
category, received the support.
It was further noted during field visits to a
sample of 68 SACCOs that only 23 SACCOs
(34%) benefited from the support and only
16(23%) were being audited by the DCO
instead of Certified Public Accountants’
firms. 29(43%) SACCOs had no audited final
accounts.
The low number of SACCOs receiving the
support was attributed to the fact that the
external audit facility was demand driven,
and therefore fewer SACCOs were requesting
for the support from UCSCU due to the
conflicting guidelines that currently require
financial statements of SACCOs to be audited
by a District Commercial Officer (DCO) as
required by the Cooperatives Act and not by
a Certified Public Accountant as envisaged
by the Programme. Audit also noted that
SACCOs did not have adequate capacity to
prepare financial statements in line with the
generally accepted accounting standards.
Many of the SACCOs did not comply with the
legal requirement of having audited financial
statements, which is one of the requirements
to holding the Annual General Meetings and,
as a result, the affairs of the SACCOs have not
been managed in a transparent manner.
Conclusion:
Fewer SACCOs are accessing support in
terms of external audit fees paid to UCSCU in
regard to the auditing of financial statements.
This has, in turn, hampered the good
management practices exercised by SACCOs,
hence exacerbating the numerous challenges
faced by them, such as: mismanagement of
funds and the high levels of non-performing
loans.
Management Response:
RFSP provides support for external audit
through Certified Public Accountants,
however, many SACCOs have not taken
advantage of the services. The responsibility
of appointing an external auditor for the
SACCO lies with the SACCO AGM.
The Project has drawn the matter to the
attention of the Registrar of Cooperatives and
will continue to avail a list of non-compliant
SACCOs. This is to help the SACCOs appreciate
19VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
the need for certified external auditors.
Compliance has increased from 74% in
2010/11 to 89% in 2011/2012 of the supported
SACCOs.
The Project will continue to ensure that the
trainings by UCSCU in the relevant modules
will address and strengthen the financial
reporting function in SACCOs.
Auditor’s Comment:
All SACCOs under the programme should be
supported and their books of account audited.
Recommendations:
• The Ministry of Finance should harmonize
the work of the key stakeholders in the
Microfinance sub sector in order to streamline
the provision of external audit services
rendered to SACCOs.
• The Coordinator of RFSP should ensure
that UCSCU is empowering SACCOs to
enable them to prepare financial statements
for auditing; and that the funds disbursed for
auditing SACCOs are properly utilized as per
annual work plans and budget.
4.3 Establishment of SACCOs
According to the RFSP strategic plan (Way
forward) for the period 2008-2011, the
programme was supposed to provide support
for the establishment of SACCOs in sub-
counties where none existed.
Establishment of SACCOs involves: holding
a consultative meeting, where people clearly
identify their common needs and desires to be
addressed; conducting feasibility and viability
studies to establish what would be required
to cover the operation costs of the SACCO
before it starts earning its own income; and
propagating and selling of the SACCO ideas
to other members of the community for
recruitment. Accordingly, the RFSP annual
work plans for the FYs from 2008/09 to 2009/10
targeted to form 161 SACCOs in various sub
counties.
Through the review of the financial
statements for the FY 2009/10, it was noted
that shs 142,835,400 was spent towards
SACCO formation activities by UCSCU. It was
revealed that out of the targeted 161 SACCOs,
111 SACCOs10 that were fully established had
graduated to the start-up category, while 50
SACCOs were still in the formation process.
Analysis of RFSP records further indicated
that out of the 50 cooperative groups still in
the formation process, 21 (42)% had not yet
taken off .
Field visits to 8 sampled SACCOs in the
formation process further confirmed that
7 (87%) had not taken off yet and of the 27
SACCOs which had graduated to the start-up
category, 19 (70%) were experiencing severe
operational challenges. (See list of SACCOs
that are non operational or closed Appendix
(iii). The failure of some SACCOs to take
off was attributed to non-adherence to the
SACCO establishment guidelines stated in
the RFSP Project Document Way Forward
2008-11.
Similarly, there was inadequate follow-up
and mentoring of SACCOs by the Uganda
Cooperative Savings and Credit Union
(UCSCU). Review of RFSP and UCSCU
annual work plans and progress reports for
the FY 2009/10, indicated that out of the 263
mentoring visits planned by UCSCU, only
41(15%) were made.
10 RFSP Annual Report 2011-12
20VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
Consequently, the SACCOs formed in various
sub-counties did not take off as planned, are
non-operational or have closed; hence, the
people in the targeted sub-counties did not
access the envisaged financial services.
Conclusion
Although, the Rural Financial Services
Programme facilitated SACCO formation,
not all the SACCOs took off, hence limiting
access to financial services in the targeted
rural areas.
Management Response:
Although activities were planned for in FY
2008/09, the activity was carried out in the FY
2009/2010. Shs.142,835,400 was spent and
accounted for in the FY 2009/2010.
It is true that 161 sub-counties were targeted
for SACCO formation, at the time of audit 111
had fully registered as SACCOs, to-date the
number has increased to 148 SACCOs.
The 50 cooperative groups referred to, were
not yet registered as SACCOs, currently, 37
have since registered as SACCOs and 13 have
never taken off.
The Project will continue to facilitate UCSCU
to enhance mentoring of SACCOs.
Auditor’s Comment:
SACCOs were not established as per work
plans.
Recommendation
• The PAU should ensure that UCSCU
adheres to laid down guidelines/steps in
SACCO establishment such that Cooperative
groups and newly formed SACCOs are fully
established and operational.
• The Project Administration Unit (PAU) should
ensure that the Lead Implementing Agency
(UCSCU) conducts adequate mentoring visits
to SACCOs in accordance with its annual work
plans.
4.4 Provision of kits (Basic & Advanced)
According to RFSP strategic plan (Way
forward) for the period 2008-2011 and
the annual work plans and budgets , the
Rural Financial Services Programme
was supposed to procure and provide the
basic kits (safes, bicycles, filing cabinets,
operation costs, calculators and stationery)
to selected SACCOs in start-up category and
advanced kit (computers, motorcycles and
generators) to SACCOs in the strengthening
category. Accordingly, a Memorandum of
Understanding was signed between RFSP
and the Lead Implementing Agency (UCSCU)
in which the RFSP was fully responsible for
the implementation of the procurement
function under the intervention.
Review of financial records for the FYs 2008/09
to 2011/12 indicated that a total of shs.
7,142,006,506 (advanced kits shs.1,506,378,886
and basic kit shs.5,635,627,620) was spent on
provision of kits to SACCOs.
However, scrutiny of the annual performance
reports of the Programme indicated that kits
were not delivered to beneficiaries in time
as per set targets in the annual work plans/
budgets.
For instance, what was planned in the FY
2009/10, that is, advanced kits (computers,
motorcycles and generators) was provided for
in the FY 2010/11. In the FY 2010/11 and FY
21VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
2011/12, out of 200 SACCOs only 63 (31%) received basic kits and out of 284 SACCOs only 74 (26%)
received advanced kits in the strengthening category.
In the FY 2009/10, on average, 90% of the planned basic kits were provided to SACCOs. All the
equipment and stationery were provided except for external audit support, where only 91 SACCOs
out of 263 received this support. In addition, during the FY 2010/11, only 4% of the planned basic
kits were provided to SACCOs. No equipment and stationery was provided to SACCOs apart from
some support for operational costs (22%) and external audit services (8%). The details of the
provision of basic kits are provided in Table 2:
Table 2: Showing Provision of Basic Kits to SACCOs
BASIC KIT 2008/09 2009/10 2010/11 2011/12
Plan Actual % Plan Actual % Plan Actual % Plan Actual %
Safe 263 263 100 38 38 100 149 0 0 150 0 0
Filing Cabinet
263 263 100 92 38 100 156 0 0 156 129 32
Calculators 263 174 66 526 526 100 248 0 0 248 248 100
Bicycles 263 126 48 196 196 100 312 0 0 248 248 100
Operation cost
263 263 100 263 263 100 572 128 22 572 275 48
External Audit services
263 0 0 263 91 34 233 18 8 138 0 0
Stationery 263 207 79 263 263 100 45 0 0 124 0 0
Average % 70 90 4 40
Source: OAG Analysis of RFSP- Annual work plans & Progress Reports
In 2011/12, on average, 42% of the planned advanced kits were provided to SACCOs. No generators
and support for external audit services was provided as planned. In the FY 2008/09 and 2010/11 no
advanced kit was provided to SACCOs. In the FY 2009/10, only generators and support for external
audit services were provided to some SACCOs. The details of the provision of advanced kits are
provided in Table 3 below:
22VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
Table 3: Showing Provision of Advanced kits to SACCOs
ADVANCED KIT
2008/09 2009/10 2010/11 2011/12
Plan Actual % Plan Actual % Plan Actual % Plan Actual %
Computers 100 0 0 50 0 0 60 0 0 60 50 83
UPS - - - 50 0 0 67 0 0 67 50 74
Printers 75 0 0 50 0 0 75 0 0 75 50 67
Generators 75 0 0 50 43 86 136 0 0 136 0 0
Motorcycles 122 0 0 50 0 0 88 0 0 88 24 27
External Audit
50 0 0 50 20 40 95 0 0 95 0 0
Average % 0 21 0 42
Source: OAG Analysis of RFSP Annual Reports.
The procurement of computers and motorcycles delayed for three (3) years while that of generators
took one (1) year.
Through interviews with officials at the PAU, it was noted that the Procurement and Disposal
Unit lacked capacity to manage the large volumes of procurement activities on time, for example,
at that time; the unit had only one officer. A review of the progress reports also indicated that
the delay in the procurement process was attributed to the irregular meeting of the contracts
committee and the delays in evaluation of bids.11
Similarly, the review of the delivery notes and dispatch notes of a sample of equipment revealed
that it took an average of 5 months for the equipment to arrive at SACCO locations. (See details in
Table 4).
Table 4: Showing the period taken to deliver Kits to SACCO locations
Equipment/Kits QuantityPeriod Received
Period dispatched
Time (months)
Motorcycles 88 April 2012 August 2012 5 months
Computers and accessories
60 October 2011 February 2012 5 months
Generators 136 January 2012 Not dispatched -
Filing cabinet 156 August 2011 October 2011 3 months
Bicycles 312 March 2011 October 2011 8 months
Average 5 months
Source: Analysis of delivery and dispatch documents
11 Annual work plan/progress 2011/12
23VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
The delay in delivery of equipment to SACCO premises was caused by the untimely procurement of
services for transporting equipment to the various SACCO locations. For example, some generators,
bicycles, computers, printers, filing cabinets and motorcycles valued at Shs.768,664,826 (Table 5)
were found at UCSCU’s premises not yet delivered to SACCOs (Picture 1 and 2).
Table 5: Showing undelivered equipment/kits in the stores
Equipment Quantity Unit cost Total cost
Motorcycles 33 5,559,251 183,455,283
Computers 3 2,550,000 7,650,000
Printers 3 1,300,000 3,900,000
Coin counting machine
14 2,000,000 28,000,000
Generators 136 3,903,155 530,829,603
Filing cabinet 23 325,680 7,490,640
Bicycles 46 159,550 7,339,300
Total 768,664,826
Source: Analysis of store records at UCSCU
Picture 1 and 2 Showing Generators and Motorcycles still in stores:
Source: OAG photo taken on 15/01/2013 at 12.45pm
As a result, SACCOs in the start-up category that did not receive the basic kits in time (safes,
filing cabinets, bicycles, operation costs, external audit fees and stationery) had to incur additional
expenses on their own amidst low savings/income. The SACCOs in the strengthening category
which did not receive the equipment in time, such as: computers and generators were found using
manual records and were unable to use the Performance Monitoring Tool for effective monitoring
24VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
and evaluation of their overall performance.
SACCOs that did not receive motorcycles
in time could not effectively monitor their
members in order to recover the loans
disbursed to them.
It was also noted that delayed delivery of
the procured kits also exposed UCSCU to
additional storage costs and security risks.
Conclusion:
SACCOs were not provided with the necessary
basic and advanced kits in time to support
their growth and sustainability initiatives and
this impacted on their operations.
Management Response:
There were delays in the delivery of kits, which
was attributed to the re-assessing exercise
that was on-going at the time for some of the
beneficiary SACCOs. The project is committed
to delivering the kits after the assessment
envisaged to end by June, 2013.
The PDU has been strengthened with
technical staff and all procurements have
since been completed.
In addition, the necessary training for the
contracts committees, evaluation committees
and partner agencies has been carried out.
All procurements for kits to SACCOs have
been completed according to PPDA guidelines
and procedures.
PAU will step up monitoring the delivery of kits
and is closely working with UCSCU to ensure
the process is completed by June 2013.
Auditor’s Comment:
UCSCU has not delivered all the procured kits
to SACCOs and this undermines the purpose
as to why they were (kits) procured.
Recommendations:
• The Ministry of Finance, Planning and
Economic Development should ensure that
programme funds are released on time.
• Project Administration Unit should build
its capacity in the PDU to ensure that the
procurement of goods and services is carried
out according to properly drawn procurement
plans to avoid unnecessary delays in the
procurement process.
• PAU should ensure that the Contracts
Committee meets regularly to dispose of, on
a timely manner, any procurement business
at hand.
• PAU should constantly monitor and review
the activities of UCSCU, including the delivery
of kits to ensure that they are implemented
according to work plans.
4.5 PROVISION OF MODULAR TRAININGS (BASIC & ADVANCED)
According to RFSP Way forward document
2008-2011; the Rural Financial Services
Programme was supposed to provide the
basic modular training and advanced modular
trainings to SACCOs.
Through document review, it was noted that
from the FYs 2009/10 to 2011/12 a total of
Shs.1,761,095,947 was spent on providing
modular trainings to SACCOs (basic training
Shs.466,132,455 and advanced training
shs.1,294,963,492) by UCSCU.
25VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
Table 6: Showing Budget and Actual expenditures on Basic and Advanced Training Activities
(Shs.‘000)
FINANCIAL YEAR
PLANNED ACTUAL VARIANCEBudget Performance %ge
Basic Training
Advanced Training
Basic Training
Advanced Training
Basic Training
Advanced Training
Basic Training
Advanced Training
2008/09 ** ** ** ** ** ** ** **
2009/10 341,642 498,000 287,599 482,907 54,042 15,092 84.0% 97.0%
2010/11 634,000 1,550,000 150,367 445,704 483,632 1,104,295 24.0% 29.0%
2011/12 0 593,508 28,165 366,352 (28,165) 227,155 NA 62.0%
TOTAL/ AVG 975,642 2,641,508 466,131 1,294,963 509,509 1,346,542 54.0% 63.0%
** Financial Statements not provided
Source: UCSCU Financial Statements
Through the review of RFSP annual report for the FY 2010/11, it was noted that training in basic
and advanced modules did not meet the set targets in the annual work plans. In the financial years
2010/11 and 2011/12, out of 316 and 322 planned advanced module trainings to SACCOs, only
139 (44%) and 138 (43 %) were conducted, respectively. While in the same years, out of 202 and
248 planned basic modules trainings only 51 (25.2%) and 63 (25.4%) were conducted, respectively.
See Figure 1.
Figure 1: Showing Performance in Provision of Module trainings to SACCOs.
Plan Actual Plan Actual Plan Actual Plan Actual
2008/09 2009/10 2010/11 2011/12
208
84
250
189
316
139
322
138
526
298
133 133
202
51
248
63
Provision of Advanced and Basic Training to SACCOs
Advanced Trainings
Basic Trainings
26VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
The delays in the provision of module
trainings to SACCOs were attributed to the
low rate of disbursement of donor funds
due to the delays in assessment of training
needs by the SACCOs.12 The Management of
UCSCU also attributed inadequate training to
limited funds caused by the delayed release
of G.O.U counter-part funding. An analysis
of the budget performance also confirmed
that there were challenges of absorption
of funds as indicated by low rate of budget
performance. For example, in the FY 2010/11
the budget under the basic and advanced
training modules showed a low performance
level of only 24% and 29 %, respectively.
This compared very lowly in the FY2009/10
where the budget under the same modules
reflected a good performance of 84% and 97%
respectively. However, it should also be noted
that although the budget performed well in
that FY, actual trainings in both modules were
less than 50% of the planned.
SACCOs that were not trained did not acquire
the requisite skills and knowledge in the
governance and micro finance practices;
savings mobilization; financial management
and loan appraisal, among others. Non-
adherence to governance and financial
standards by SACCOs is also attributed to
inadequate trainings.
Conclusion
SACCO management and board members did
not acquire the relevant skills and knowledge
to effectively operate SACCOs.
Management Response:
The incomplete Modular trainings that had
12 Aide-Memoire- MAY 2012, and RFPS Annual Aide-Memoire- MAY 2012, and RFPS Annual
report FY 2010/11
been planned for 2010/11 were eventually
adjusted to customized trainings after a
needs assessment, which ascertained the
actual requirements of the SACCOs. These
were subsequently rolled into the AWP&B for
the FY 2011/12.
The project is still faced with the challenge of
high staff turnover in SACCOs and term limits
of the board as provided for by the SACCO by-
laws.
The project has in place a monitoring and
evaluation system to track performance
and absorption of funds to implementing
agencies.
PAU has been monitoring training activities by
the implementing agencies like UCSCU and
verifying from the beneficiary SACCO.
Auditor’s Comment:
The trainings, whether customized or not,
should be extended to SACCOs.
Recommendation
• PAU should monitor the training activities
of the implementing agencies and should
ensure that they have the capacity to effectively
implement training activities.
• The Ministry should ensure timely
disbursement of Government counter-part
funds.
• Implementing agencies should improve
on their funds absorption and accountability
capability to allow them requisition for more
funds to enable them access funds for timely
implementation of activities.
• PAU should ensure timely submission of
accountabilities for funds released to the
implementing agencies.
27VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
4.6 Funding
4.6.1 Utilization of IFAD loan
According to the Programme Loan agreement, (October, 2003) between the International Fund for
Agriculture Development (IFAD) and the Government of Uganda/MOFPED), the total investment in
the RFSP Programme was SDR 14,729,562 (IFAD-SDR13,900,000 and G.O.U-SDR 829,562), which
was estimated at Shs.44 billion of which IFAD contributed 90% while the Government of Uganda
(G.O.U) Counter-part funding accounted for 10%.
A review of the audited financial statements of RFSP indicated that the absorption rate of the IFAD
loan was recorded at 57% over the FYs 2008/09 to 2011/12. Low absorption of funds (36%) was
registered in the FY 2008/09 as compared to the FY 2010/11 where a high absorption rate of 84%
was registered, as detailed in Table 7 below:
Table 7: Annual Budget Performance - IFAD Loan (FYs 2008/09 – 2011/12)
F/year Planned Actual Variance %Utilization
2008/09 9,700,428,000 3,459,426,588 6,241,001,412 36
2009/10 10,072,739,000 4,583,936,851 5,488,802,149 45
2010/11 10,339,412,988 8,743,514,864 1,595,898,124 84
2011/12 10,324,319,460 6,148,560,433 4,175,759,027 60
Total 40,436,899,448 22,935,438,736 17,501,460,712 57
Source: RFSP Audited Financial Statement
A review of the annual report for the FY 2011/12, dated 28th September, 2012 revealed that the
low absorption of the IFAD loan was attributed to: delays in the procurement process, delayed
submission of accountabilities by implementing agencies and delays in the release of funds by
Government for its funded component. For example, it took an average of 2.5 months for funds to
be released to the RFSP in the period under review (FY2008/09 to 2011/12) as indicated in Table 8
below:
Table 8: Showing delayed release of G.O.U funds to RFSP
FINANCIAL YEAR AVERAGE DELAY(DAYS)
2008/09 69
2009/10 47
2010/11 85
2011/12 79
Average 70
28VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
A review of the programme performance reported in the AWPB13 for the FY 2012/13 attributed low
absorption to: delayed procurement, delayed signing of M.O.Us with implementing agencies and
delays in accountability for funds14.
Consequently, programme activities were not carried out by implementing agencies as planned. It
was also observed that delayed release of funds by MOFPED to RSFSP subsequently affected the
budget performance of the implementing agencies since the programme did not have enough funds
to disburse to them. For example, UCSCU, the major implementing agency, on average, received
only 60% of its budgeted amount. Figure 2 below details UCSCU budget performance over the years
under review.
Figure 2: Showing Disbursement of GoU funds to UCSCU.
Source: UCSCU financial statements FYs 2008/09 to 2011/12
4.6.2 Disbursement of GOU Funds
Government of Uganda was required, according to the Programme Loan agreement, (October, 2003),
to provide counterpart funding to cover taxes, rent for PAU offices and salaries for some PAU staff.
In addition, G.O.U was to provide funds to RFSP for SACCO development totaling to an equivalent of
USD 9.3 million.
A review of the Aide Memoir of 7-18th May, 2012 indicated that as at 31st March 2012, G.O.U had paid
USD 5.7 million leaving a balance of USD 3.6 million15.
13 Annual report FY2011/12, page 33.
14 RFSP AWPB FY 2012/13, page 33
15 Aide Memoir 7-18th May, 2012, page 14.
29VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
An analysis of the RFSP audited financial statements in the period under review also indicated that
GoU funds towards the Programme were not released according to approved annual work plans
and budgets. During the period under review (FY 2008/09 to 2011/12), only 75% of the budgeted
funds had been released as detailed in Table 9 and figure 3 below.
Table 9: Annual Budget Performance – G.O.U (FYs 2008/09 – 2011/12) 0
F/year Planned Actual Variance % Disbursement
2008/09 8,652,658,861 8,647,435,290 5,223,571 99.9
2009/10 9,959,620,000 6,719,393,243 3,240,226,757 67
2010/11 8,222068,000 4,071,657,795 4,150,401,205 50
2011/12 7,222,289,828 6,274,067,043 948,222,785 87
Total 34,056,636,689 25,712,553,371 8,344,074,318 75
Source: RFSP Audited Financial Statement
Figure 3: Showing Budget Performance of GoU funds
Source: RFSP Financial Statements
30VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
Conclusion:
Programme operations were not funded
as per MoUs, annual work plans and
budgets, hence, hindering the attainment of
programme objectives.
Management Response:
There was generally low budget absorption
of funds under the IFAD Loan over the years.
The major cause of the low absorption of
the IFAD Loan was attributed to delays in
procurements. However, all procurements
related to equipment for SACCOs have been
completed. Currently, the cumulative loan
absorption is over 90%.
Other reasons for the low absorption include
the time spent on preparatory activities for
instance, signing of MOUs with additional
Implementing Agencies, clearance by the
Solicitor General and amendment of the loan
agreement in the subsequent years.
In order to increase funds absorption, the
project is currently providing back stopping
to its implementing agencies to improve
funds absorption and timely submission of
accountabilities.
Un-timely disbursement of funds has been
attributed to the limited resources envelope.
PAU has carried out training to implementing
agencies in the financial management of
public funds. After training, PAU is currently
providing back stopping to its implementing
agencies to improve funds absorption rates
and timely submission of accountabilities.
Auditor’s Comment:
The absorption rate of funds has just
improved as the project is nearing to the end.
However the problem affected earlier stages
of programme implementation.
Recommendation:
• The PAU should ensure absorption of loan
funds as per Approved Budgets and loan
agreements.
• The Project Administration Unit should
ensure timely procurement of goods and
services for use by the beneficiaries/SACCOs.
• The Project Administration Unit should
ensure that the various Implementing
Agencies make timely submission of
expenditure justifications and accountabilities
in order to access programme funds.
• The Ministry of Finance, Planning and
Economic Development should ensure timely
release of GoU counter-part funds.
4.7 MENTORING OF SACCOs
The Memorandum of Understanding
between Government of Uganda and Uganda
Cooperative Savings and Credit Union
(UCSCU), states that UCSCU shall provide
assistance to SACCOs in terms of mentoring,
this includes training SACCO members, board
and staff in owning, using and controlling
SACCOs in a beneficial way. Mentoring
was supposed to be conducted by Financial
Extension Workers on a monthly basis.
The review of UCSCU financial statements
for the FYs 2009/10 to 2011/12 indicated
that a total of shs.694,733,610 was spent on
mentoring of SACCOs, as shown in Table 10
below:
31VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
Table 10: Showing Budget and Actual expenditures on Mentoring Activities
FINANCIAL YEARSACTIVITY
2009/10 2010/11 2011/12 Total
SACCO Mentoring
Budget 180,000,000 698,500,000 314,500,000 1,193,000,000
Actual 136,250,980 230,344,250 328,138,380 694,733,610
variance 43,749,020 468,155,750 (13,638,380) 498,266,390
Budget Performance (%) 76 33 104 58
Source: UCSCU Financial Statements.
The review of the RFSP Annual report for the FY 2009/10 indicated that out of 263 SACCOs planned
for mentoring, only 41 SACCOs were mentored, PAU management explained that, in addition,
during the FY 2009/10 routine mentoring activities were conducted to programme SACCOs in the
country due to a change in the mentoring approach16.
The review of a RFSP quarterly report on the assessment of the effectiveness of field teams (FEWs
and FOs) in mentoring SACCOs, indicated that the mentoring function performed by the entire 15
Regional field teams was unsatisfactory17
Further analysis of monthly mentoring reports by UCSCU regional offices also indicated that there
was inadequate mentoring of SACCOs due to the limited number of FEWs in the regions, which
increased their (FEWs) monthly workload. This challenge was exacerbated by the high number
of SACCOs, which also included non-programme SACCOs. For example, a Financial Extension
worker is required to visit, on average, 43 SACCOs in a month. Considering that there are only 22
working days in a month, the FEW would be required to visit 2 SACCOs a day. Detailed analysis of
FEWs workload in the regions is indicated in Table 11 below:
Table 11: Showing Monthly Work load per FEW
Regional Office
FEWsProgrammeSACCOs
Non-ProgrammeSACCOs
TotalSACCOs
WorkloadPer FEW
Arua 5 59 44 103 21Masaka 5 57 97 154 30Mbarara 5 79 145 224 44Gulu 3 41 80 121 40Soroti 5 43 95 138 27Iganga 4 46 225 271 67Luwero 2 42 24 66 33Lira 3 56 36 92 30Kampala 4 63 226 289 72Mbale 6 62 171 233 38Karamoja 1 37 12 49 49Tororo 2 24 27 51 25
Masindi 1 38 35 73 73
Kabarole 3 56 84 140 46
Kabale 2 46 76 122 61
Total 51. 735 1,377 2,112 656
Average 3 49 91 140 43
Source: UCSCU Annual progress report 2011
16 Aide-memoire September, 2009.
17 RFSP/UCSCU Joint quarterly report on assessment of mentoring SACCOs-March 2012
32VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
The inadequate mentoring of SACCOs was
attributed to the limited capacity of UCSCU in
terms of number of the Financial Extension
Workers (FEWs). A FEW is in charge of
an average of 43 SACCOs against the best
practice of 20 SACCOs, according to UCSCU
management.
As a result, SACCO mentoring was not
effectively conducted, given the scope of the
work at hand on a monthly basis as required,
thus SACCO needs and challenges were not
fully addressed in time. For example, during
field visits, 29(43%) of the 68 SACCOs visited
were not adhering to governance and financial
standards. Similarly, 21(31%) were facing
challenges in the management of funds.
Conclusion:
Whereas SACCOs were of the opinion that
receiving capacity enhancement inputs
through coaching and mentoring was making
a bigger contribution to their development18,
there was inadequate mentoring.
Management Response:
It is true that 263 SACCOs were planned
for mentoring in the FY 2009/10 but only 41
were mentored. However, the mentoring
methodology was reviewed in 2011 and
mentoring was defined as a routine provision
of on-site technical support to all SACCOs
depending on their specific needs or
challenges.
Under the new mentoring methodology, funds
disbursed are used to facilitate FEWs (SACCOs
mentors) in terms of fuel and motorcycle
repairs in the course of their work.
18 Supervision and Implementation Support Mission Supervision and Implementation Support Mission
,May 2012- Aide-Memoire
Mentoring is done by a team of field officers
comprising FEWs, FOs, and DCOs, whose
capacities to mentor SACCOs have been
enhanced through tailored trainings provided
by UCCK.
Auditor’s Comment:
The Implementing Agency did not carry
out effective mentoring of SACCOs and
the effectiveness of the new mentoring
methodology can only be assessed in future.
Recommendations:
PAU should ensure that the Implementing
Agency (UCSCU) builds adequate capacity to
carry out effective mentoring of SACCOs.
PAU should ensure that the Implementing
Agency (UCSCU) properly accounts for the
funds released for the mentoring of SACCOs.
4.8 PROGRAMME OUTREACH, USAGE AND SUSTAINABILITY
4.8.1 Outreach and Usage
Outreach is measured by the number of people
reached and served; while usage is measured
by the number of people utilizing the SACCO
services for their improved welfare.
It was noted that the programme performed
well in its outreach and usage initiatives as
indicated by the annual trend figures. The
number of supported SACCOs grew from 317
at inception of the project in the FY 2007/08
to 735 in the FY 2011/12. This resulted into
increased number of fully paid-up members
from 249,365 to 547,439 in the same period.
The annual total share capital holding also
grew from 2.4 to 30.2 billion shillings with
33VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
a total growth in savings from 11.0 to 52.4 billion shillings, also in the same period. The Loan
portfolio in this category of SACCOs has also grown from 17.4 to 88.1 billion shillings.
The details of annual performance in this regard are shown in the figures of outreach and usage
presented in Table 12.
Table: 12 showing Trends in Outreach and Usage Indicators
Indicator June 2008 June 2009 June 2010 June 2011 June 2012
No. of Supported SACCOs 317 400 735 735 735
Number of fully paid-up Members in supported SACCOs
249,365 338,631 362,050 448,307 547,439
Total Share Capital in supported SACCOs(UG Shs million)
2,367 9,593 16,310 25,023 30,158
Total Savings in supported SACCOs(UG Shs million)
11,172 21,126 27,986 44,709 52,422
Total Loan Portfolio in supported SACCOs(UG Shs million)
17,385 32,388 44,352 78,456 88,131
Source: RFSP Results Framework
4.7.2 Sustainability
Sustainability refers to the ability of SACCOs to be able to generate sufficient income to cover their
expenditures and thus continue providing services to members beyond the project life. In measuring
the financial sustainability of SACCOs, four indicators are used, which include: Operational self-
sufficiency (OSS), Financial self-sufficiency (FSS), Return on Assets (ROA) and Portfolio at Risk
(PAR).
According to the score based – criteria (zander 2010) used in the RFSP reality check tool, a
sustainable SACCO should have an OSS>125 %, FSS>100%, ROA>5% and PAR<20%.
A review of the RFSP reality check results for –December 2011 indicated that out of the 735
programme SACCOs only 176(24%) were categorized as non-reporting or closed. Field visits to
a sample of 117 SACCOs also revealed that 49(41%) of the SACCOs were closed/non-operational
(Appendix iii).
Further analysis of the results on the operating/reporting 559 SACCOs indicated that 253 (45.3%)
were financially sustainable, 184 (32.9%) were potentially sustainable while 122 (21%) had
challenges of financial sustainability and were at risk19. On average, only 47% of SACCOs were
financially sustainable.
Summary of the reality check results are indicated in Table 13 and 14 below:
19 RFSP Reality check data- December 2011
34VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
Table 13: Showing trends in Reality Check results
Indicator 2009 2010 2011
No % No % No %
Category 1 68 12.0% 96 16.6% 253 45.3%
Category 2 176 30.9% 174 30.1% 184 32.9%
Category 3(a) 95 16.7% 101 17.4% 41 7.3%
Category 3(b) 230 40.4% 208 35.9% 81 14.5%
Total Reporting SACCOs
569
(77%)100%
579
(77%)100% 559 (76%) 100%
Not Reporting 166 156
119
Closed 57
Sub-Total Non-Reporting/Closed 166 (22.6%) 156
(21.2%) 176 (24%)
Total No of SACCOs 735 735 735
Source: RFSP Reality Check data December 2011
Table 14: Showing Analysis of the Reality Check Results
Financial Sustainability indicators
No. of Sampled SACCOs
SACCOs that do not meet criteria
Percentage
OSS<125% 559 255 45
FSS<100% 559 273 49
PAR>10% 559 403 72
ROA<5% 559 265 47
Average 53.2
Source: RFSP reality check data –December 2011
The programme has registered an increase in the number of sustainable SACCOs across the
years 2009, 2010 and 2011. However, as at 2011 more than 50% of the supported SACCOs were
still financially unsustainable; and 176 were either dormant (119) or closed (57). SACCO closures
and or lack of sustainability was attributed to mismanagement of funds/fraud, non-adherence to
governance and financial standards, inability to recover loaned funds and inadequate mentoring
and training.
Conclusion:
The Rural financial Services Programme was able to achieve the objectives of outreach and usage
as planned, but had not yet fully achieved the objective of sustainability. 53% of the programme
SACCOs still required more support to attain full-scale financial self sustainability.
35VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
Management Response:
The project fully achieved the objectives of outreach and usage which can be verified through the
RFSP results framework agreed upon by the donor and Government.
There is an increasing positive trend (i.e. Years 2009-2011) in attaining financial sustainability by
SACCOs as indicated in the reality check results.
Auditor’s Comment
There have been positive trends towards the achievement of increased outreach and usage of
SACCOs, however, more effort is still required in the area of SACCO sustainability.
Recommendation:
The Ministry of Finance, Planning and Economic Development and the PAU should ensure that
a legal framework for regulating SACCOs is in place, and should provide adequate technical and
supervision support to SACCOs.
4.9 Performance Monitoring Tool Training by AMFIU
The Memorandum of Understanding signed between the RFSP and the Association of Microfinance
Institutions of Uganda (AMFIU) requires AMFIU to provide training in the Performance Monitoring
Tool (PMT) to programme SACCOs. AMFIU was also required to provide technical backstopping/
assistance to the trained SACCO staff to enable them prepare and use PMT reports on a quarterly
basis.
According to the RFSP annual work plans for the FYs 2009/10 and 2010/11, 65 and 51 SACCOs were
supposed to be trained in the PMT, respectively.
A review of the financial statements for the period from FY 2008/09 to 2011/12 revealed that a total
of shs.454,252,562 was disbursed to AMFIU in respect of the training and provision of technical
assistance to SACCOs.
It was noted that for the FY 2009/10 training was carried out in all of the 65 SACCOs as planned,
however, in the FY 2010/11 no PMT training was conducted. In the FY 2011/12, out of 65 SACCOs,
only 38 SACCOs received training.
Further analysis of the Quarterly technical assistance reports revealed that not all the SACCOS
that received training were technically assisted in the preparation of PMT reports.
In the FY 2010/11 for the first and second quarters, out of 65 SACCOs 36(55%) and 32(49%) received
technical assistance, respectively. Details of quarterly technical assistance to SACCOs are given
in Figure 4.
36VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
Figure 4: Graph showing performance of technical assistance to SACCOs.
Source: OAG Analysis of AMFIU technical assistance reports
The inadequate PMT training was attributed to delays in submission of expenditure justifications
/ accountability by the implementing agency, for example, Shs.88.3 million advanced to AMFIU in
September 2011 had not been accounted for.20 It was noted that AMFUI did not have capacity, in
terms of numbers of staff, to provide the technical assistance. They were largely depending on
contract staff to carry out technical assistance.
The analysis of PMT data provided by AMFIU indicated that although SACCOs were trained in the use
of PMT to prepare quarterly reports, not all trained SACCOs were submitting. In the FY 20101/11,
out of the 65 trained SACCOs, only 37(56%) and 31(47%) SACCOs submitted PMT reports in the
first and second quarters, respectively. Similarly, in the FY 2011/12, out of 104 trained SACCOs, only
54(51%) and 18(17%) submitted PMT reports in the third and fourth quarters, respectively. Details
of quarterly submission of reports are indicated in Figure 5 below:
Figure 5: Performance Monitoring Tool –Reporting by SACCOs.
Source : OAG Analysis of AMFIU PMT data
20 Supervision and Implementation Support Mission, May 2012 –Aide-Memoire.
37VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
Field visits to a sample of 29 SACCOs trained
in PMT, revealed that the Performance
Monitoring Tool was being utilized by 12 (41%)
of the SACCOs.
Inadequate training and technical assistance
provided to SACCOs resulted into the inability
of SACCOs to use the performance monitoring
tool, which would have assisted them in timely
reporting and monitoring performance.
Conclusion:
Not all SACCOs trained in PMT are reporting
using the Performance Monitoring Tool,
a shortcoming that is hindering effective
monitoring and supervision of the overall
SACCO performance.
Management Response:
AMFIU targeted to train 116 SACCOs, and all
of them received training in the use of PMT
(65 SACCOs in the FY 2009/10, 38 SACCOs
in 2011/12, and 13 SACCOs in 2012/13). The
training that did not take place in the FY 2010/11
was due to inadequate preparedness on the
part of the SACCOs to receive the training,
that is, they lacked computers, a power source
and competent staff to undergo the training.
However, the training was planned for and
carried out in the subsequent years.
The project will continue working with AMFIU
to ensure that all trained SACCOs receive
technical backstopping, produce and utilize
PMT reports on a quarterly basis.
Auditor’s Comment
The training delayed and management’s
commitment to work with AMFIU can be
assessed in the future.
Recommendations:
The Project Administration Unit should
ensure that AMFIU builds capacity in order to
provide quarterly technical backstopping to
SACCOs that have been trained in the use of
PMT.
The Project Administration Unit and AMFIU
should ensure that SACCOs report using the
Performance Monitoring Tool on a quarterly
basis for effective monitoring of SACCO
performance.
PAU should ensure that AMFIU conducts
training and technical assistance according
to the approved work plan and submits
accountabilities on time to enable it access
further funding.
4.10 Computerization of the cooperative registry
The Memorandum of Understanding signed
between the Government of Uganda/
MOFPED and the Department of Cooperative
Development /MTIC stated that the Rural
Financial Services Programme shall provide
funds to set up a fully computerized and
updated registry of SACCOs. The MOFPED was
also supposed to facilitate the department to
conduct regional and district SACCO forums.
According to the RFSP annual work plans
for the FY 2011/12, the Department of
Cooperative Development/MTIC was
supposed to collect data for updating the
SACCO registry, computerize the SACCO
database and conduct district SACCO forums.
A review of financial statements indicated
that a total of shs. 338,108,000 was released
38VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
to MTIC in the period under review to carry
out those activities.
It was noted that by June 2012, the process
of updating the SACCO registry was still on
going, data collection and entry was not yet
complete. It was also noted that the SACCO
registry was not yet fully computerized.
The Department was provided with 2 desk
top computers, 3 laptops, a digital scanner,
printer and photocopier. The consultant
who is supposed to develop and upgrade the
existing cooperative database had not yet
been recruited by the PAU.
This delay in computerization of the registry
has been attributed to the delay in the
procurement of the services of a consultant
to re-design the SACCO database.
The absence of a computerized SACCO registry
hinders effective supervision, monitoring and
regulation of Cooperatives/SACCOs.
Conclusion:
The Cooperative/ SACCO registry is not
computerized, a problem that is hindering
effective supervision, monitoring and
regulation of SACCOs.
Management Response:
The computerization process of the SACCO
Registry is already ongoing. The project
procured all the required equipment and
delivered it to the Department of Cooperatives.
It also facilitated the department to collect
data from all SACCOs in the country for
updating the SACCO registry. The project
has also recruited a consultant to redesign
the SACCO database, and is expected to
commence on 1st April, 2013.
Auditor’s Comment
The computerization of the project has
delayed hence affecting the attainment of its
intended purpose.
Recommendation
The Ministry and the RFSP should expedite
the process of recruiting a consultant to
re-design the SACCO database to ensure
computerization of the Registry.
4.11 Training in Cooperative Principles
The Rural Financial Services programme
signed a Memorandum of Understanding
with the Uganda College of Commerce,
Kigumba (UCCK) for 2 years from the FY
2011/12 to 2012/13 to conduct a training
needs assessment; provide short training
courses on SACCO principles, governance and
management to FEWs, DCOs and FOs; and
to provide part-time certificate and diploma
courses to SACCO managers and staff.
Through review of financial statements, it
was noted that Shs.466,194,010 was released
to UCCK in the FYs 2011/12 to conduct those
services in accordance with the annual work
plan.
According to the RFSP Annual work plan for
the FY 2011/12, the UCCK was to provide short
training courses to FEWs, DCOs and FOs in
Training of Trainers (TOT), refresher and audit
training and mentoring teams. The college
was also to provide part-time cooperative
management certificate and diploma courses
to SACCO managers and staff to be completed
in June 2013.
39VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
A review of the progress reports indicated
that short term training courses on SACCO
principles, governance and management
were conducted to 174 FEWs, DCOs and FOs.
Training in part-time diploma and certificate
course in cooperative management for
90 SACCO managers and staff had also
commenced and the course is scheduled to
end in June 2013. However, the short training
courses of FEWs, DCOs and FOs in ToT
refresher and audit training and mentoring
teams was rolled over to the FY 2012/13.
The delay in conducting the short training
courses was attributed to the delay in
developing their course units and the slow
selection process of participants which was
being done in collaboration with UCSCU field
staff and trainers. This will delay the training
of beneficiaries in short courses.
Conclusion
The training in Cooperative Principle was not
conducted in time as per the approved work
plans.
Management Response:
At the time of this audit, the refresher TOT
and audit training for FEWs, DCOs and FOs
had been rolled over to the FY 2012/13. The
Training has since been completed.
PAU and UCSCU are currently updating the
list of trained FEWs, DCOs and FOs.
UCCK developed all the relevant course units
for certificate and diploma courses and these
are running.
Auditor’s Comment
No documentary evidence was provided to
justify management’s response.
Recommendation
The PAU and UCSCU should have a database
on the various FEWs and FOs being trained.
The PAU should ensure that the UCCK
expedites the process of developing course
Units.
4.12 Support to SACCO Unions
According to the memorandum of
understanding between the Government of
Uganda and the Uganda Cooperative Alliance
(UCA), UCA was supposed to conduct a
situational analysis on the existing SACCO
Unions with a view of providing technical
support and periodic mentoring of 4 SACCO
Unions. UCA was also supposed to mobilize
and sensitize SACCOs so as to encourage
them to join unions and select 2 SACCO
networks for assistance in registration with
the Department of Cooperatives. Additionally,
UCA was supposed to document lessons
learnt from support to Regional SACCO
unions to form a basis for future interventions
in the sector.
Through document review it was noted that
a total of shs.132,565,000 was released to
UCA to carry out those activities in the period
under review.
A review of progress reports revealed that
UCA conducted a situation analysis of the
SACCO unions and presented a report to the
PAU. As a result of the report, it was agreed
that UCA, instead, provides mentoring and
technical support to 2 existing SACCO Unions
that were currently registered and work with
4 other SACCO networks and assist them to
register as Unions.
40VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
At the time of audit (December 2012), UCA
had not commenced activities of periodic
mentoring and trainings of SACCO Unions.
The assistance of the selected SACCO
networks to register with the Department of
Cooperatives was deferred to the FY 2012/13.
The delay to conduct periodic mentoring and
trainings of SACCO Unions, mobilization and
sensitization of SACCOs and registration of
SACCO networks was attributed to the delayed
process of signing M.O.U, which affected the
timely release of funds and implementation
of agreed activities.
Delayed registration of SACCO networks;
delayed mobilization and sensitization of
SACCOs; and delayed training and mentoring
of SACCO Unions denied SACCOs of the
benefits and opportunities accruing from
forming SACCO networks and Unions.
Conclusion:
The sensitization of SACCOs and technical
assistance provided to SACCO unions by the
Uganda Cooperative Alliance delayed and
was not conducted as per agreed work plans,
thus delayed the attainment of the objective of
preparing SACCOs for sustainable existence.
Management Response:
PAU has been monitoring the activities of UCA
and reports indicate that the activities have
been undertaken.
In addition, RFSP, through routine monitoring
is currently verifying these activities.
Auditor’s Comment
No documentary evidence was provided to
justify management’s response.
Recommendation
The PAU should monitor and supervise the
implementation of the activities of UCA as
agreed in the M.O.U.
John F. S. MuwangaAUDITOR GENERAL
41VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
GLOSSARY OF TERMS
Advanced kits:
A collection of specified user equipment which are given to
SACCOs in the strengthening category to enable it improve operations.
Basic kits:
A collection of specified user equipment which are given to
SACCOs in the start-up category to enable it improve operations.
Financial Extension Worker
Are individuals who work closely with the rural communities within all the Sub-Counties in their
respective districts of operation as a focal point for gathering information from the community/
members of savings and credit societies.
Microfinance deposit institutions:
Are microfinance Institutions which receive members Deposits in addition to the core function.
Programme SACCOs:
Are SACCOs supported by Government of Uganda through the Rural Financial Services
Programme
Start-up category:
A lower category of SACCO classification; duly selected as a lead SACCO for the sub county,
with a membership of at least 250 paid up members, registered with the department of
cooperatives.
Strengthening category:
A higher level of SACCO status; with a savings portfolio of at least 6 million, portfolio at risk
lower than 10%,operating in a free-of charge premises, a minimum of 300 members.
Tier 4 financial Institutions:
These are financial institutions that are Savings and Credit Cooperatives, Non-governmental
organizations and companies engaged in microfinance, often associated with donor-supported
programs.
42VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
APPENDICES
Appendix(i)Organization Structure
MINISTER OF FINANCE PLANNING AND ECONOMIC DEVELOPMENT
PERMANENT SECRETARY/ SECRETARY TO THE TREASURY
DIRECTOR ECONOMIC AFFAIRS
COMMISSIONER DEPARTMENT OF MICROFINANCE
COORDINATOR- RURAL FINANCIAL SERVICES PROGRAMME (RFSP)
UNDER SECRETARYDEPUTY SECRETARY TO THE TREASURY
43VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
APPENDIX (ii) Methodology
Documents Reviewed
Document Purpose
Ministerial Policy Statements-2008/08-2011/12
Obtain mandate, functions of the Ministry of Finance. Mission, Vision, and strategic objectives.
RFSP -Annual Work plans and Budgetsf/year 2008/09 t0 2011/12
To assess and establish the Activities planned, funds disbursed and utilized by the Programme.
RFSP- Annual/Quarterly Progress Reports -2008/09-2011/12
To assess and verify whether activities were conducted as per MoUs and Work plans/ Budgets and if Objectives were achieved, challenges faced and recommendations.
Work plans and Progress Reports of Implementing Agencies(AMFIU, UCA, UCCK)
To Verify whether Activities as per MoUs and Workplans/ Budgets were conducted, challenges faced and recommendations.
Memorandum of Understanding between RFSP and the Implementing Agencies(AMFIU,UCA, UCCK)
To verify and understand the roles of each Agency in regard to the implementation of Programme activities.
Annual Work plans and Progress Reports UCSCU
To assess and verify whether activities were conducted as per MoUs and Work plans/ Budgets and if Objectives were achieved, challenges faced and recommendations.
SACCO Monthly ReportsTo verify the Portfolio at Risk, Operational and Financial self Sustainability of SACCOs.
Way Forward Document 2008-2011 To obtain information on operations of key-players in the sector over the period.
Aide Memoirs -2010-2012 To obtain Information on performance of the RFSP its achievements and challenges.
RFSP Mid Term Report -2010 To obtain Information on performance of the RFSP its achievements and challenges.
Finscope Uganda 2009 ReportTo obtain information on Demand and Access to Financial Services in Uganda
Programme Implementation Manual-RFSP RFSP ,Way forward 2008-2011, between GoU And IFAD
To verify Regulations and procedures followed by the programme
Cabinet Memorandum-Principles for Comprehensive Regulation of MicrofinanceInstitutions in Uganda(2011)
To understand regulations followed by various players in the Microfinance Sector.
Savings and Credit Cooperatives Bye- lawsCooperative Societies Statue 1991 To establish Regulations that govern Cooperatives.
44VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM A REPORT BY THE AUDITOR GENERAL
Officers Interviewed
LOCATION OFFICER REASON
The Department of Microfinance-MOFPED
Commissioner –DMF.
To assess the performance of the department in their role towards formulating the regulation for Tier 4 financial Institutions, activities conducted and challenges faced by the department in fulfilling their role.
Department of Cooperatives-MTTI
Commissioner/Registrar-MTTI.
To verify the activities conducted by the department in regard the MoU signed with RFSP, achievements made and challenges faced by the departments in fulfilling their role.
Rural Financial Services Programme-Kampala
Coordinator-RFSP
To assess the performance of the Programme verify activities carried out whether set objectives were achieve and Challenges faced by the programme and recommendations of mitigating the challenges.
Operations manager -RFSP
To assess the performance of the Programme verify whether set objectives were achieved, and Challenges by the programme and recommendations
Procurement Officer-RFSP
To assess the performance of the Programme verify Procurement plans against Targets to ascertain whether targets were achieved and Challenges faced by the Procurement Unit.
Uganda Credit and Savings Cooperatives Union Headquarters-Maganjo
Chief Executive Officer-UCUSCU.
To ascertain the guidelines, activities of the Union , key processes and Procedures, Achievements and Challenges faced in conducting their work
Operations Manager -UCSCU
To assess whether UCSCU was able to carry out activities as per Annual Work plans /Budgets and if set objectives were achieved. Challenges faced in implementing programme activities and recommendation.
UCSCU Regional Offices.
Branch Heads of UCUSCU To asses and verify activities conducted by the Branches , Achievements and Challenges faced in conducting their work.
IMPLEMENTING AGENCIES AMFIU, UCA, UCCK
To verify whether the Implementing agencies conducted activities as per MoU with RFSP and Annual Workplans /Budgets.
SACCOs Upcountry SACCO managersTo asses and verify the operations, Procedures in management of SACCOs, Achievements and Challenges faced by SACCOs
45VFM AUDIT REPORT ON THE CAPACITY BUILDING SUPPORT TO SACCOs BY THE RURAL FINANCIAL SERVICES PROGRAM
A REPORT BY THE AUDITOR GENERAL
APPENDIX (iii) Non-operational and closed SACCOs
S/N DISTRICT SACCO NAME CATEGORY STATUS
1. Kampala Kasanga Nezikokolima Start-up 08 Closed
2. Kampala Linear Start-up 08 Closed
3. Kampala Parkyard Flexible kit 2011 Closed
4. Kampala Nakawa market Vendors Flexible kit 2010 Closed
5. Kampala Banamutungo Start-up 09 Closed
6. Kampala Gweyalabyeko Flexible 2010 Closed
7. Wakiso Busiro East Start-up- 11/12 Closed
8. Wakiso Ssisa multipurpose Start-up 08 Closed
9. Wakiso Entebbe Atanaziraba Start-up 07 Closed
10. Wakiso Kitezi Start-up 08(Upgraded) Closed
11. Mukono Banagoma Start-up 08 Closed
12. Mukono KasawoNamuganga Advanced 2007-08 Closed
13. Mukono Nakifuma Start-up 11/12 Closed
14. Mukono Wakisi Elders Start-up 11/12 Closed
15. Mukono KibingeMisanvu Start-up 11/12 Closed
16. Rakai Bwebunakya small business Start-up 11/12 Closed
17. Lyantonde Kinuka Start-up 11/12 Closed
18. Jinja Asonkera Flexible Kit 2010 Dormant
19. Iganga Sendechibula Start-up 11/12 Closed
20. Mbale Industrial division formation Closed
21. Mbale Bugulya farmers formation Closed
22. Mbale Bukalisha Start-up 09 Closed
23. Mbale Bunghoko Mutoto Start-up 09 Closed
24. Mbale Busoba Start-up Dormant
25. Bukwo Bukwo TC Start-up 11/12 Closed
26 Bukwo Chesower Start-up 11/12 Closed
27 Sironko Bumasifwa formation Closed
28. Sironko Buyobo formation Closed
29. Sironko Lusha formation Closed
30. Mbale Bukonde Start-up 08 Dormant
31. Masindi Bunjenje Start-up 08 Closed
32. Masindi Nganghya Start-up 11/12 Closed
33. Masindi BweyaleSolidare Flexible 2010 Closed
34. Lira Amugu subcounty Formation Closed
35. Lira Railway Division Formation Closed
36. Oyam Ayoyerac Start-up 08 Closed
37. Lira Aromo Cooperatives Start-up 08 Closed
38. Lira Oribcing Advanced 2007-08 Closed
39. Lira Acaba Start-up 11/12 Closed
40. Lira Omoro Start-up 11/12 Closed
41. Lira Kangayi Start-up 11/12 Closed
42. Arua Pawor village Start-up 11/12 Closed
43. Yumbe Kei subcounty Start-up 11/12 Closed
44 Arua Adumi Start-up 11/12 Closed
45. Nebbi Akela Start-up 08 Closed
46. Nebbi Jang okoro Start-up 11/12 Closed
47. Nebbi Nebbi subcounty Start-up 11/12 Closed
48. Nebbi Parombo subcounty Start-up 08 Dormant.
49 Jinja Tweyambe Buyengo Start-up 11/12 Dormant
OFFICE OF THE AUDITOR GENERAL
T H E R E P U B L I C O F U G A N D A
P.O. Box 7083, Kampala. Tel. +256 414 344 340 Fax. +256 414 345 674
E-mail: [email protected]
OFFICE OF THE AUDITOR GENERAL