OFFICE OF THE AUDITOR GENERAL

Transcription

1 OFFICE OF THE AUDITOR GENERAL THE REPUBLIC OF UGANDA REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF MASAKA REGIONAL REFERRAL HOSPITAL FOR THE YEAR ENDED 30 TH JUNE 2017 OFFICE OF THE AUDITOR GENERAL UGANDA 1 P a g e

2 TABLE OF CONTENTS list of Acronyms... 4 Opinion... 5 Basis of Opinion... 5 Utilization of Medicines and health Supplies... 6 Medicines and Health supplies accountability... 7 Stock-outs... 7 Expired medicines... 7 Other Matter... 8 Failure to Implement Budget as approved by Parliament... 8 Understaffing... 8 Management s Responsibility for the Financial Statements... 9 Auditor s Responsibilities for the Audit of the Financial Statements... 9 Appendix 1: Duplicated Patient ID Number Appendix 2: Drug Stock Outs Appendix 3: Expired Drugs Appendix 4: Failure to implement budget as approved by Parliament Appendix 5: Understaffing P a g e

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4 LIST OF ACRONYMS BOQ Bills of Quantities C/U Church of Uganda CAO Chief Administrative Officer ECG Electro Cardiogram DEO District Education Officer DLG District Local Government EMHS Essential Medicines and Health Supplies FY Financial Year GOU Government of Uganda HC Health Centre IFMS Integrated Financial Management System ISSAI International Standards of Supreme Audit Institution KCCA Kampala Capital City Authority KMs Kilometers LGFAM Local Governments Financial and Accounting Manual 2007 LGFAR Local Governments Financial and Accounting Regulations 2007 LGMSD Local Government Management and Service Delivery MMHS Management of Medicines and Heath Supplies MoFPED Ministry of Finance Planning and Economic Development MoH Ministry of Health NFA National Forestry Authority NMS National Medical Stores OPD Out Patients Department P/S Primary School PFMA Public Finance Management Act 2015 PPDA Public Procurement and Disposal of Assets UGX Uganda Shillings URF Uganda Road Fund UWEP Uganda Women Enterprise Project YLP Youth Livelihood Programme 4 P a g e

5 REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF MASAKA REGIONAL REFERRAL HOSPITAL FOR THE YEAR ENDED 30 TH JUNE, 2017 THE RT. HON. SPEAKER OF PARLIAMENT Opinion I have audited the financial statements of Masaka Regional Referral Hospital for the year ended 30 TH June These financial statements comprise of the statement of financial position, the statement of financial performance, and cash flow statement together with other accompanying statements, notes and accounting policies. In my opinion, the financial statements of the Masaka Regional Referral Hospital for the year ended 30 TH June 2017 are prepared, in all material respects, in accordance with Section 51 of the Public Finance Management Act, 2015, and the Financial Reporting Guide, Basis of Opinion I conducted my audit in accordance with International Standards of Supreme Audit Institutions (ISSAIs). My responsibilities under those standards are further described in the Auditor s Responsibilities for the Audit of the Financial Statement s section of my report. I am independent of the Masaka Regional Hospital in accordance with the Constitution of the Republic of Uganda (1995) as amended, the National Audit Act, 2008, the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B) (IESBA Code), the International Organization of Supreme Audit Institutions (INTOSAI) Code of Ethics and other independence requirements applicable to performing audits of Financial Statements in Uganda. I have fulfilled my other ethical responsibilities in accordance with the IESBA Code, and in accordance with other ethical requirements applicable to performing audits in Uganda. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. 5 P a g e

6 Key Audit Matters Key audit matters are those matters that, in my professional judgment, were of most significance in my audit of the financial statements of the current period. These matters were addressed in the context of my audit of the financial statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters. I have determined the matters described below as key audit matters to be communicated in my report; Utilization of Medicines and health Supplies The Management of Medicines and medical Supplies Manual indicates that Medicines and medical supplies form the second biggest expenditure in the health sector after human resources. The security of medicines must be ensured at all levels to prevent theft, abuse, misuse and wastage. Masaka Hospital serves as a district Hospital with various Health Center s. Consequently in the course of auditing Masaka District Financial Statements, I considered the utilisation of medicines and medical supplies as an area of focus. The audit focused on the procedures, processes, tools and documentation used to manage medicines and medical supplies which included; Involving external expertise in identifying the sample of tracer medicines and medical supplies, and developing data collection tools. Selecting medicines and medical supplies to trace their utilization in the hospital. Analysing the delivery cycles, balances on stock cards and order levels to ascertain stock outs. Obtaining and checking the records relating to the expired medicines and also inspecting the storage practices. Establishing the availability of key human resource personnel to ensure that medicines and medical supplies are not wasted as explained in the Management of Medicines and medical Supplies Manual. I obtained the approved structure and compared it with the list of existing staff. I observed the following shortcomings at Masaka Regional Referral Hospital;- 6 P a g e

7 Medicines and Health supplies accountability Medicines and health supplies worth UGX.193,878,108 from Masaka Regional Referral Hospital main store were not properly accounted for. Medicines were purportedly issued to patients whose numbers were duplicated as shown in appendix 1. This was contrary to the Management of Medicines and Health Supplies Manual (MMHSM). Management explained that this is an anomaly that originated from two registers at OPD, one for male and the other for female. Each of the registers records and numbers independently, leading to such duplication. The matter requires urgent attention. Stock-outs 2(two) items out of the 11 (eleven) selected tracer 1 EMHS experienced stock outs ranging between 3 and 125 days as shown in appendix 2. Stock outs erode patients confidence in the health sector which leads them to resort to inappropriate and expensive alternatives of health care. Management explained that this is due to inadequate budget for medical supplies amidst the ever increasing numbers of patients. The Accounting Officer was advised to continue engaging the relevant authorities to have the medicines and supplies budget increased so as to reduce on the drug stock outs. Expired medicines Part 9 of the MMHS manual requires that expired items should be properly recorded, placed in a designated area and destroyed in accordance with the local regulations. I observed that medicines and health supplies worth UGX.7,434,985 had expired as shown in Appendix 3. The expired drugs had stayed for a period of more than six (6) months without disposal. The expiry of the drugs may be a result of excess stocking of slow moving medicines. The cost of destruction of expired drugs is high and there is a risk of them getting re-distributed back to the market. Management explained that expired drugs have been assembled, quantified and recorded and was awaiting action by NMS. 1 The Tracer medicines include; Artemether/Lumefantrine,HIV determine Test strips,malaria RDTs,Oxygen,Blood,Surgical gloves,oxytocin,safedelivery kits/mamakits, PGA 2 sutures 7 P a g e

8 Management is advised to liaise with NMS to ensure that expired medicines are destroyed in accordance with the regulations. Other Matter I consider it necessary to communicate the following matter other than those presented or disclosed in the financial statements. Failure to Implement Budget as approved by Parliament Section 45 (3) of the Public Finance Management Act, 2015 states that An Accounting Officer shall enter into an annual budget performance contract with the Secretary to the Treasury which shall bind the Accounting Officer to deliver on the activities in the work plan of the vote for a Financial year, submitted under section 13 (15) of the said Act. I observed that out of the budgeted revenue of UGX.7,424,157,000 the Hospital received UGX.7,052,342,185 resulting into a shortfall of UGX.371,814,815. I also observed that a number of planned activities worth UGX.371,814,815 were not implemented as shown in appendix 4. The most greatly affected outputs included; remodelling of dental unit, supply of an ECG machine. Failure to implement activities denies service to the beneficiary communities and defeats the purpose for which budgeting and budgetary controls are instituted. The failure to implement all the planned activities may have been a result of lack of capacity and inadequate releases or may be an indication of inefficiency. The Accounting Officer explained that the failure to implement all the planned activities was due to failure to realise the planned funding and the breakdown of the scanning machine which affected the Non-Tax-Revenue. The Accounting Officer was advised to engage the relevant authorities and ensure that budget deficiencies are addressed so that all the allocated funds are released and all activities are implemented according to the budget as approved by Parliament. Understaffing The Hospital has an approved staff structure of 318 positions. Out of the approved staff structure of 318 positions, only 245 (77%) positions are filled leaving 73 (23%) positions vacant as shown in Appendix 5. 8 P a g e

9 Understaffing overstretches the available staff beyond their capacity, creates job-related stress to the fewer and negatively affects service delivery. Management explained that although some recruitment was done for the FY 2017/18, the recruitment process has failed to attract the qualified personnel to fill the posts at the Hospital. The Accounting Officer was advised to liaise with the Health Service Commission, Ministry of Public Service and Ministry of Health to have the vacant positions filled. Management s Responsibility for the Financial Statements Under Article 164 of the Constitution of the Republic of Uganda, 1995 (as amended) and Section 45 of the Public Finance Management Act, 2015, the Accounting Officer is accountable to Parliament for the funds and resources of the Hospital. The Accounting Officer is also responsible for the preparation of financial statements in accordance with the requirements of the Treasury accounting instruction and Public Finance Management Act 2015 and for such internal control as management determines necessary to enable the preparation of financial statements that are free from material misstatement whether due to fraud or error. In preparing the financial statements, the Accounting Officer is responsible for assessing the Hospital s ability to continue delivering its mandate, disclosing, as applicable, matters related to affecting the delivery of the mandate of the Hospital, and using the Treasury Accounting Instruction and the Public Finance Management Act 2015 unless the Accounting Officer has a realistic alternative to the contrary. The Accounting Officer is responsible for overseeing the Hospital s financial reporting process. Auditor s Responsibilities for the Audit of the Financial Statements My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISSAIs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably 9 P a g e

10 be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISSAIs, I exercise professional judgment and maintain professional scepticism throughout the audit. I also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Hospital s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Hospital s ability to deliver its mandate. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor s report. However, future events or conditions may cause the Hospital to fail to deliver its mandate. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. I communicate with the Accounting Officer regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. 10 P a g e

11 I also provide the Accounting Officer with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with him/her all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards. From the matters communicated with the Accounting Officer, I determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I describe these matters in my auditor s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. John F.S. Muwanga AUDITOR GENERAL KAMPALA 12 th December, P a g e

12 APPENDICES: Appendix 1: Duplicated Patient ID Number Patient No Qty 24's Duplicated Qty 24 pack Remarks Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated 12 P a g e

13 Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated 13 P a g e

14 Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated Patient ID Number duplicated No number Patient ID Number duplicated No number Patient ID Number duplicated Unit Pack 185,707 Total packs =1044 Total tablets =751,680 Value UGX.193,878, P a g e

15 Appendix 2: Drug Stock Outs Drug Date when balance is NIL Date when balance is replenished No of days for stock outs Artemether (Coartem 6) 11/4/ /5/ days Artemether (Coartem 6) 21/9/ /1/ days Artemether (Coartem 12) 17/10/ /12/ days Artemether (Coartem 12) 21/6/ /6/ days Artemether (Coartem 18) 10/5/ /6/ days Artemether(Coartem 12) 24/5/ /5/ days Blood 4/7/2016 3/8/ days Blood 4/9/ /9/ days Blood 28/10/ /11/ days Blood 2/3/ /3/ days Blood 16/5/ /5/ days Appendix 3: Expired Drugs Name of Expired Source Date of Expiry Quantity Medicine GoU, TPT & manufacture date others Determine TPT Main store 10/11/ ,549,711 Determine TPT Main store 27/3/ ,599,359 Determine TPT Main lab 19/5/ ,168 Determine TPT OPD 29/9/ ,184 Determine TPT OPD 14/5/ ,290 Determine TPT MCH 29/9/ ,666 Determine TPT Male ward 15/5/ ,573 Determine TPT Male ward 29/09/ , P a g e

16 Determine TPT Maternity 29/9/ ,880 Determine TPT Maternity 15/5/ ,132 Determine TPT Uganda Cares 15/5/ ,179,405 73,434, P a g e

17 Appendix 4: Failure to implement budget as approved by Parliament Item Description Remodeling of dental unit Supply of an ECG machine Supply of Eco cardiac probes Plan ned outp ut/ Quan tity Actual output / Quanti ty Amount Budgeted Amo unt Rele ased Variance Unit Nil 6,000,000-6,000,000 unit Nil 5,000,000-5,000,000 unit Nil 8,000,000-8,000,000 Staff recruitment 292,120, ,120,043 Pension payment 15,474,713 15,474,713 Supply of medicines in the private wing Nil 44,860,059 44,860, ,814,81 5 Mgt. Expla natio n Funds not releas ed Funds not releas ed Funds not releas ed Funds not releas ed Funds not releas ed Funds not releas ed Audit Remarks & conclusion The dental unit was not remodeled There was no ECG machine procured There were no Eco cardiac probes procured Recruitment was not done Recruitment was not done Medicines not supplied 17 P a g e

18 Appendix 5: Understaffing Post Titles Approved Positions Filled Positions Vacant Positions Hospital Director Snr. Consultant (Medicine) Snr. Consultant (Pediatrics) Snr. Consultant (Obs/Gynea) Cons. (Medicine) Cons. (Pediatrics) Senior Cons. (Surgery) Cons. (Obs/Gynea) Cons. (Public Health) Cons. (Pathology) Cons. (Ophthalmology) Cons. (Radiology) Cons. (Psychiatry) Cons. (Anaesthesia) Cons. (ENT) MOSG (Medicine) MOSG (Peadiatrics) MOSG (Surgery) MOSG (Obs/Gynea) MOSG (Public Health) MOSG (Radiology) MOSG (Psychiatry) MOSG (Anaesthesia) MOSG (ENT) MOSG (Pathology) MOSG (Orth. Surgeon) Medical Officers Dental Surgeon Snr. Clinical Officers Clinical Officers Principal Anaesth. Officer Snr. Anesthetic Officer Anaesthetic Officers Principal Orthopedic Officer Snr. Orthopedic Officers Snr. Orthopedic Technologist Orthopedic Officer Orthopedic Technicians P a g e

19 Principal Physiotherapist Snr. Physiotherapist Physiotherapist Audiological Technician Occup. Therapist Princ. Radiographer Snr Radiographer Radiographer Princ. Lab. Technologist Senior Lab. Technologist Laboratory Technologist Senior Laboratory Technician Laboratory Technician Laboratory Assistant Princ. Ophthal. Clinical officer Snr. Ophthal. Clin. Officer Ophthalmic Clinical Officer Princ. Public Health Dental officer Sen.public health dental officers Public Health Dent. Officers Dental Technician Snr. Dental Technologist Snr Pharmacist Pharmacist Snr. Dispenser Dispenser Nutritionist Princ. Psych. Clinical Officer Snr. Psych. Clin. Officer Psychiatric Clinical Officer Snr. Principal Nursing Officer Principal Nursing Officer Senior Nursing Officers Nursing Officers (Nursing) Nursing Officer (Psychiatry) Nursing Officers (Midwifery) Enrolled Nurses (Nursing) Enrolled Nurses (Midwifery) Enrolled Nurses (Psychiatry) Theatre Assistants P a g e

20 Principal Hospital Administrator Snr. Hospital Administrator Accountant Supplies Officer Hospital Administrator Procurement Officer Ass. Procurement Officer Senior Medical Records Officer Principal Human Resource Officer Human Resource Internal Auditor Medical social worker Assistant Medical Records Officer Medical Records Assistant Asst. Inventory Management Officer Snr. Accounts Assistant Accounts Assistant Personnel Assistant Snr. Clerical Officer Steno Secretary Pool Stenographer Office Supervisor House Keeper Stores Assistant Telephone Operator Domestic Asst Office Typist Engineering Assistant Eng. Technician Seamstress Theatre Attendant Dental Attendant Askaris Artisan Nursing Assistant Dhobi Dark Room Attendant Kitchen Attendants P a g e

21 Office Attendant Pharmacy Attendant Mortuary Attendants Plumbers Drivers Total P a g e