REPORT OF THE AUDITOR GENERAL

THE REPUBLIC OF UGANDA REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE UGANDA GLOBAL FUND TO FIGHT AIDS, TUBERCULOSIS AND MALARIA PROJECT HEALTH SYSTEMS STRENGTHENING COMPONENT IN THE MINISTRY OF HEALTH FOR THE YEAR ENDED 30 TH JUNE 2015 GRANT NO.UGD-011-G09-S OFFICE OF THE AUDITOR GENERAL UGANDA

TABLE OF CONTENTS PAGE LIST OF ACRONYMS 2 REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE UGANDA GLOBAL FUND TO FIGHT AIDS, TUBERCULOSIS AND MALARIA PROJECT HEALTH SYSTEMS STRENGTHENING COMPONENT IN THE MINISTRY OF HEALTH FOR THE YEAR ENDED 30TH JUNE 2015 GRANT NO.UGD-011-G09-S 3 DETAILED REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE UGANDA GLOBAL FUND TO FIGHT AIDS, TUBERCULOSIS AND MALARIA PROJECT - HEALTH SYSTEMS STRENGTHENING COMPONENT IN THE MINISTRY OF HEALTH FOR THE FINANCIAL YEAR ENDED 30TH JUNE 2015 5 1.0 INTRODUCTION 5 2.0 BACKGROUND INFORMATION 5 3.0 GRANT OBJECTIVES 6 4.0 ACHIEVEMENTS OF THE GRANT 6 5.0 AUDIT SCOPE 6 6.0 PROCEDURES PERFORMED 7 7.0 Categorization of audit findings 8 7.1 Profiling of audit observations 8 1

LIST OF ACRONYMS DHIS DHO GAAPs GF GoU HMIS HSS LFA M&E MoFPED MoH PDR PDU PMTCT PR PSS RPMT SOP SR TB UGX USD VHTs VPP District Health Information System District Health Officers Generally Accepted Accounting Principles Global Fund Government of Uganda Health Management Information Systems Health System Strengthening Local Fund Agent Monitoring and Evaluation Ministry of Finance Planning and Economic Development Ministry of Health Portfolio Disbursement Release Procurement and Disposal Unit Preventing of Mother-to-Child Transmission Principal Recipient Public Service Standing Orders Regional Performance Monitoring Teams Standard Operating Procedures Sub Recipient Tuberculosis Uganda Shillings United States Dollars Village Health Teams Voluntary Pooled Procurement 2

REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE UGANDA GLOBAL FUND TO FIGHT AIDS, TUBERCULOSIS AND MALARIA PROJECT HEALTH SYSTEMS STRENGTHENING COMPONENT IN THE MINISTRY OF HEALTH FOR THE YEAR ENDED 30TH JUNE 2015 GRANT NO.UGD-011-G09-S THE RT. HON. SPEAKER OF PARLIAMENT I have audited the accompanying financial statements of the Uganda Global Fund to Fight Aids, Tuberculosis and Malaria Project Health Systems Strengthening Component in the Ministry of Health for the year ended 30 th June 2015. These financial statements comprise of the Statement of Financial Position as at 30 th June 2015, Statement of Fund Accountability, Statement of Cash Flow together with other accompanying statements, notes and accounting policies. Management 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 Global Fund HSS component. The Accounting Officer is also responsible for the preparation of financial statements in accordance with the requirements of the Government of Uganda, donor regulations, guidelines and the Generally Accepted Accounting Principles (GAAPs) and for maintenance of such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement whether due to fraud or error. Auditor s Responsibility My responsibility as required by Article 163 of the Constitution of the Republic of Uganda, 1995 (as amended) and Sections 13 and 19 of the National Audit Act, 2008 is to express an opinion on the financial statements based on my audit. I conducted my audit in accordance with the International Standards on Auditing. The standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing audit procedures to obtain audit evidence about the amounts and disclosures in the financial statements as well as evidence supporting compliance with relevant laws and regulations. The procedures selected depend on the Auditor s judgment, including the assessment of risks of material misstatement of the financial statements whether due to fraud 3

or error. In making those risk assessments, the Auditor considers internal controls relevant to the entity s preparation and fair presentation of financial statements 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 entity s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Part A of my report sets out my opinion on the financial statements. Part B which forms an integral part of this report presents in detail all the significant audit findings made during the audit which have been brought to the attention of management. PART "A" Opinion In my opinion the Financial Statements of the Uganda Global Fund to Fight Aids, Tuberculosis and Malaria Project - Health Systems Strengthening Component in the Ministry of Health present fairly in all material respects the Financial Position as at 30 th June 2015 and the Statement of Fund Accountability, Statement of Cash Flow together with other accompanying statements, notes and accounting policies for the year then ended in accordance with the basis of accounting stated under Note 10.2 (a) to the Financial Statements and in conformity with the grant reporting guidelines, terms and conditions. John F. S. Muwanga AUDITOR GENERAL 7 th December 2015 4

PART B DETAILED REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE UGANDA GLOBAL FUND TO FIGHT AIDS, TUBERCULOSIS AND MALARIA PROJECT - HEALTH SYSTEMS STRENGTHENING COMPONENT IN THE MINISTRY OF HEALTH FOR THE FINANCIAL YEAR ENDED 30TH JUNE 2015 This section outlines in detail the audit scope, audit findings, my recommendations and management responses in respect thereof. 1.0 INTRODUCTION I am mandated by Article 163 (3) of the Constitution of the Republic of Uganda, 1995 (as amended), to audit and report on the public accounts of Uganda and of all public offices including the courts, the central and local government administrations, universities and public institutions of the like nature and any public corporation or other bodies or organizations established by an Act of Parliament. Accordingly, I carried out the audit of the above project to enable me report to Parliament and the Development Partners. 2.0 BACKGROUND INFORMATION During the implementation of the Uganda Global Fund to fight Aids, Tuberculosis and Malaria project, gaps and constraints were identified in the Health system, which if not addressed would impact on the expected outcomes. Interventions were required to address the identified gaps and constraints, which resulted in the implementation of the Health Systems Strengthening Component (HSS). The HSS grant duration is two years commencing on 1 st Aug 2012 and ending on 31 st July 2014, with a total budget of USD.4, 762,711. The Grant has had three disbursements so far, namely USD.2, 051,883 released on 25 th July 2012. A further USD.328, 178 was disbursed on the 2 nd November 2012 directly to the Voluntary Pooled Procurement (VPP) for the procurement of laboratory microscopes and delivery kits to 200 facilities and the most recent on 25 th June 2014 of USD.2,272,147. An aggregate amount of USD.4, 652,208 has been disbursed to date to the Country. 5

3.0 GRANT OBJECTIVES The grant is guided by five objectives, namely; Establish 12 Regional Performance Monitoring Teams (RPMT) to strengthen the active surveillance of program outputs and to support the performance management of the implementing agencies at the sub-national level. Facilitate the employment of 600 vital cadres for HIV (PMTCT), TB and Malaria to fully operationalize health services for the attainment of the program objectives. Strengthening the logistics management capacity at the sub-national level with a focus on quantification, distribution, and stock monitoring at High Volume Health facilities. Strengthen the laboratory capacity at the sub-national level for basic laboratory monitoring. Strengthening Village Health Teams (VHTs) to undertake community level activities that support the objectives of HIV, Malaria and TB. 4.0 ACHIEVEMENTS OF THE GRANT The achievements of the Grant in the period under review included: Recruited 82 of the 96 Regional Performance Monitoring Teams to strengthen the active surveillance of program outputs and support the performance management of the implementing agencies at the sub national level; Procured 30 motorcycles for medicine management supervisors in 30 underserved districts and 12 motor vehicles (Mini buses) for 12 Regional Performance Monitoring Teams; and Printing Home Based Management of Fever (HBMF) registers whose distribution was concluded. 5.0 AUDIT SCOPE The audit was carried out in accordance with the International Standards on Auditing and accordingly included a review of the accounting records, agreed procedures as was considered necessary. In conducting my reviews, special attention was paid to establish whether: a. The Financial Statements have been prepared in accordance with the Public Finance Management Act, 2015 and comply with the Generally Accepted Accounting 6

Principles (GAAPs) taking into consideration the Government of Uganda (GoU) regulatory framework regarding Public Finance and that they present fairly the financial performance and position of the Grant as at 30 th June 2015; b. Funds were used in accordance with the conditions of the Grant Agreement, with due attention to economy and efficiency and only for the purposes for which the funds were provided; c. Goods, works and services have been procured in accordance with the relevant financing agreement and the GoU procurement regulations; d. A sufficient Internal Control structure was in place and internal controls worked as intended throughout the year. e. All necessary supporting documents and records have been maintained and are in agreement with the financial statements presented and; f. Fixed assets are real and properly evaluated and the property rights or related beneficiaries' rights are established in accordance with the Grant conditions. 6.0 PROCEDURES PERFORMED 1) Revenue/Receipts Obtained information on funds provided by the Development Partners and reconciled the amounts to the cashbooks and bank statements. 2) Expenditure Vouched transactions to establish whether documentation in support of the expenditures were in tandem with the amounts and descriptions on the vouchers; reviewed and reconciled the bank statement transactions to test for occurrence and whether they were properly controlled and accounted for. 3) Internal Control System Reviewed the internal control system and its operations to establish whether the controls were sound and were applied throughout the period under review. 4) Procurement Reviewed the procurement of goods and services under the Grant during the period under review and reconciled with the procurement plan. 7

5) Periodic reports of the project Reviewed the Agreement provisions and reports and reconciled them with the grant activities during the period under review. 6) Financial Statements Examined, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessed the accounting principles used and significant estimates made by management; as well as evaluating the overall financial statement presentation. 7.0 Categorization of audit findings The following system of profiling of the audit findings has been adopted to better prioritise the implementation of audit recommendations. Category Description 1 High significance Has a significant / material impact, has a high likelihood of reoccurrence, and in the opinion of the Auditor General, it requires urgent remedial action. It is a matter of high risk or high stakeholder interest. 2 Moderate significance Has a moderate impact, has a likelihood of reoccurrence, and in the opinion of the Auditor General, it requires remedial action. It is a matter of medium risk or moderate stakeholder interest. 3 Low significance Has a low impact, has a remote likelihood of reoccurrence, and in the opinion of the Auditor General, may not require much attention, though its remediation may add value to the entity. It is a matter of low risk or low stakeholder interest. 7.1 Profiling of audit observations The following table shows the profiling of the various audit observations: No Title of finding Significance 1 2 3 4 Outstanding Regional Planning and Monitoring Teams (RPMT) Wages. Delay in Fulfilling Conditions Precedent. Unacceptable Performance Objective. Review of prior year audit findings High High Moderate Low 8

Management had in all material respects complied with the financing agreement and government of Uganda Financial Regulations except in the following issues which have been brought to the attention of the Accounting Officer. 8.0 DETAILED FINDINGS 8.1 Outstanding wages At the end of the financial year 2014/2015, staff of the Regional Planning and Monitoring Team (RPMT) had not been paid wages for the months of March, April, May and June totaling UGX.336,569,548. This was attributed to the delay by RPMT leaders to send time sheets for staff salary payments. Delayed salary payment demotivates staff and subsequently undermines service delivery. In response, the Accounting Officer explained that this grant was performance based and required approved time sheets before effecting any payments. By rejecting unsupported wage claims, team leaders would be compelled to submit time sheets before 28 th day of each month. I advised the Accounting Officer to ensure sensitization of the affected staff about the requirement of time sheets and proper supervision of the team leaders. 8.2 Delay in Fulfilling Conditions Precedent. In the Project Grant Agreement, conditions precedent outline pre-requisites to be fullfilled by the Principal Recipient of the Global Fund, before further disbursements can be made for implementation of the project. A review of the project grant performance report made between 1st July-2014 and 31st Dec 2014 established that the Principal Recipient did not meet some of the conditions precedent as a requirement for the implementation of the Global Fund Grant. This therefore resulted into non-disbursement and/ or delayed disbursement of funds. Some of the conditions that were not met were; 9

An update of names, titles and authenticated specimen signatures of each person authorized to sign disbursement requests. Lack of list of sub-recipients. Lack of gap analysis for functional microscopes. Lack of an acceptable operational manual. Delays in fulfilling conditions precedent, lead to late fund disbursements which may affect the project lifecycle and achievement of its objectives. In response, the Accounting Officer explained that; Grant signatories were changed from time to time depending on the change of office bearers and all signatories were updated following recent changes at both MoFPED and MoH. Gap analysis for microscopes was completed and submitted to Global Fund and the funds were subsequently released. The grant operational manual was updated and approved by the Global Fund. I advised management to always fulfill conditions precedent in a timely manner to avoid delays in grant disbursements. 8.3 Unacceptable Performance Rating The Grant Performance report dated 26 th May 2015 which is part of the grant performance information for the Project with code UGD-011-G09-S revealed that while most objectives performed adequately and even beyond the expectations rating, the number of staff trained on data management and logistics management systems, attained only 13% from period 1-5 which is rated as unacceptable. Lack of trained staff in data and logistics management constrains efficiency in data collection, storage and management. In response, the Accounting Officer explained that, on 23rd September 2012, GoU agreed with the Global Fund that the grant funds would support commodities, while GoU and in-country partners would fund in country operations including training. To date, GoU has not provided the funds for in-country operations and training. 10

The 13% performance on training was only possible with support from in country partners. I advised the Accounting Officer to liaise with the Ministry of Finance and set aside funds for training of staff in data logistics and management as they are key components of the project.. 9.0 Review of prior year audit recommendations A review of the status of implementation of prior year audit recommendations revealed that some recommendations had not been implemented. As a result, the planned activities could not be implemented during the period thus affecting the project completion timelines and the attainment of the overall project goals and objectives. The table refers. Review of Prior Year Audit Recommendations Audit Issue Recommendation Current Status Management Response 1.0 AUDIT FINDINGS 1.1 Delayed Release of Project Funds. I have advised the Project Management to ensure timely release of funds to enable implementation of planned activities, thus ensuring attainment of project objectives Funds are still not released in time as evidenced by payment of salary arrears that occurred The situation was only slightly addressed with Funds are being The issue of delayed movement of monies from holding account to operations accounts had been severally brought to the attention of Accountant General for redress released/ disbursed on quarterly basis and in accordance with the approved work plan/budgets. L.2 Global Fund GoU Counterpart Funding I have advised management to There is still a challenge in GOU meeting the Implementation takes place upon Government s release 11

Audit Issue Recommendation Current Status Management Response Inadequate releases always liaise with MoFPED to plan properly for the release of funds to ensure proper implementation of all planned project activities. Counter- part funding requirement. GoU has slightly increased the cofunding compared to previous year. Partially addressed of funds and management so far duly adhered to that. 1.5 Review of implementation of recommendations 1.5.1 Status of conditions precedent and/or other special conditions It was observed that the Principal Recipient had three conditions precedent and/or other special conditions to be fulfilled before I have advised management to expedite the implementation of the outstanding conditions in order not to frustrate further disbursement of funds No proof has been provided to confirm that the two conditions In appendix 2 had been addressed Pending In progress The process of subsuming the RPMTs is still ongoing. In the meantime, their supporting grant has been extended to December 2016. Still ongoing and after the first disbursement could be made. While one condition had been met, the other two remained outstanding. 1.5.2 Follow up of Local Fund Aqent (LFA ) findings and recommendations I have advised the Project Management to 12 No proof has been provided to confirm that the Resource Centre was currently printing and rolling out revised data collection tools across the country. Once

Audit Issue Recommendation Current Status Management Response The Local Fund Agent (LFA) raised a number of issues during the year on the Grant. While some actions had been taken by Management to address the recommendations, a number of them remained outstanding and this could affect grant disbursements. ensure that it fully addresses the outstanding issues raised by the LFA. LFA recommendations had been addressed Pending- in progress completed, accuracy from primary tools will be achieved. In addition, PR has planned to conduct regular data quality audits across all districts. However, GoU funding for this and other in-country operations has not been realized Still Ongoing Delayed implementation of prior year audit issues hinders attainment of the project objectives. I advised the Accounting officer to ensure that audit recommendations are implemented promptly so as to attain the project objectives. 13

MANAGEMENT LETTER FOR THE UGANDA GLOBAL FUND TO FIGHT AIDS, TUBERCULOSIS AND MALARIA PROJECT - HEALTH SYSTEMS STRENGTHENING COMPONENT GRANT NO.UGD-011-G09-S The following system of grading of the management letter issues has been provided in order to better prioritize implementation of recommendations:- Grade Grade 1 Remarks Findings are those which are particularly significant and the involvement of management may be required for their resolution. These are high level issues which impact seriously on the achievement of overall grant goals. Grade II Findings are those that may have significant impact on the control environment. Here control environment looks at risk factors derived from management s attitude to risk as regards operational activities within the PR/Sub-recipient organization. Grade III Findings are those which are less significant than Grade 1 and II but nevertheless merit attention. No Findings Management Responses Verifica tion Finding s 1.0 Outstanding Regional planning and monitoring teams (RPMT) salary At the end of the financial year 2014/2015, several RPMT staff had not been paid salary for the months of March, April, May and June totaling UGX.336,569,548.72 as per Appendix I. This was attributed to the delay by RPMT leaders in sending time sheets for salary payments. Delayed salary payment has the effect of demotivating The auditors observation is noted. Given that this is a performance based grant, management emphasized the need for time sheets before payment could be effected. Being a new requirement, the teams initially did not consider this important, hence the delays. Team leaders have now been compelled to submit time sheets timely Audit Conclusions N/A The issue is sustained I Grade 14

1.1 staff and subsequently undermining service delivery. Recommendation The Accounting Officer should ensure adequate supervision of staff involved in preparing time sheets. Double payment Section F (a) of the Uganda Public Service Standing order (PSS) 2010 requires that a public servant draws only one salary while serving in the Public service of the Government of Uganda. A review of the staff contracts file revealed that an officer contracted by the Ministry of Health on a non- pensionable contract service as a pharmacy resource focal person under the Regional Planning and Monitoring Teams (RPMTs) and posted to Mbarara RPMT regional office also worked in Itojo Hospital under Ntungamo District Local Government. by 28th day of each month. The observation was noted earlier and the officer terminated way before the audit. It was partly due to this realization that the ministry introduced time sheets to avoid double play by tasking officers to account for their time. The Officer in question opted to return to his original station and a demand note was issued to commence proceedings for recovery. No evidence of recovery The issue is dropped I At the time of audit the Officer had received salary from the project amounting to UGX.13,783,668 which amounts to double payment. Recommendation The Accounting officer is advised to put in place supervision mechanism aimed at ensuring that RPMT staffs are not involved in double employment. Meanwhile any double payment should be recovered accordingly. 15

2.0 Inadequate Monitoring and Evaluation Mechanism Program Grant Agreement, article 14.a Sub Recipients, recommends that the Principal Recipient may provide Grant Funds to other entities provided that the PR, from time to time assesses the capacity of each sub recipient to implement Program activities and report thereon, makes such assessments available to global fund upon request and selects each sub recipient based on a positive assessment of that sub recipient's capacity to carry out the program activities that are assigned to it and in a transparent manner. UGX. 605,074,927 was advanced to Makerere College of Sciences for operational research to review condom programming and HIV prevention interventions under a memorandum of understanding dated 26 th March 2015. However a report of a study carried out to assess Public Sub-recipients preaward for grant implementation and management revealed that Makerere University School of Public Health was among those rated as having the weakest capacity in Monitoring and Evaluation due to the following reasons among others; Makerere University was contracted to conduct Operations Research, whose implementations is guided by a research/study protocol alongside with study tools (questionnaires, guides e.t.c). Therefore it does not require separate M&E Plans as the M&E for research is imbedded within the study protocol before approval can be obtained from Institutional Review Boards. Requirement for a separate M&E is not essential in this case but in any case their score on M&E capacity assessment exercise we conducted was 23/30, which was considered above average. The University was chosen in addition to its comparative advantage of being mandate to conduct health related research. N/A The issue is kept in view I Lack of Monitoring and Evaluation (M $ E) plans, insufficient M $ E documentation and Inadequate budgets. In the circumstances, there is possibility that the project did not achieve value for money incurred. Recommendation 16

The college should put in place adequate monitoring and evaluation mechanisms before receipt of more funds. 3.0 Weaknesses in Sub-Recipients Grant Implementation and Management Under article 14(a) of the Program Grant Agreement for Global Fund, the Principal Recipient may provide Grant funds to other entities to carry out Program activities provided the Principal, assesses the capacity of each subrecipient and selects them based on positive assessment. However a pre-award assessment study carried out during the period indicated that public and non- public sub-recipients scored either average or below average. The report highlighted some of the weakest areas as; Public Sector SRs draw their mandate from the Constitution to implement government health program. The purpose of capacity assessment for Public Sector SRs is not to eliminate entities but to identify capacity gaps so as to address the identified weaknesses. However, there are no SRs under this grant as it is implemented centrally by the PR through the RPMTs. N/A The issue is dropped I Some sub recipients (SRs) did not have 17

internal organizational systems like foundational documents, previous capacity building in key grant management areas, evidence of skilled staff and availability of office equipment. Availability of adequate financial management systems in auditing, insurance and capacity to produce quality reports timely. Strong SRs with capacity and good internal organizations had their ratio of the global fund grant to the overall organization s budget affected by low amounts available for M $ E, an indication that they relied more on global fund grant than their own resources. The Grant Fund may be mismanaged due to lack of previous experience, lack of evidence of sustainability and technical coordination. Recommendation The Principal Recipient should select sub-recipients in accordance with proper management capacity as outlined above. 4.0 Delay in Fulfilling Conditions Precedent. Project Grant Agreement, conditions precedent outlines conditions to be filled by the Principal Recipient of the Global Fund, before further disbursements can be made for implementation of the project. A review of the project grant performance report made between 1st July-2014 and 31st Dec 2014 established that the Principal Grant signatories are changed from time to time depending on the change of office bearers, as was the case during the period for this audit. All signatories have been updated following recent changes at both MoFPED and MoH. N/A The issue is maintained I 18

Recipient did not meet some of the conditions precedent as a requirement for the implementation of the Global Fund Grant. This therefore resulted into nondisbursement and delayed disbursement of funds. Some of the conditions that were not met were; An update of names, titles and authenticated specimen signatures of each person authorised to sign disbursement request. Lack of list of sub-recipient. Lack of gap analysis for functional microscopes. Lack of an acceptable operational manual. There are no SRs in this grant. Gap analysis for microscopes was completed and submitted to Global Fund and the funds were released. The grant operational manual was updated and approved by the Global Fund. Delays in fulfilling conditions precedent leads to delay in fund disbursement which may affect the project lifecycle and immediate achievement of its objectives. Recommendation 5.1 5.0 The Principal Recipient should always fulfill conditions precedent in a timely manner. Review of the HSS Grant performance report Unacceptable Performance Objective. The Grant Performance report dated 26 th May 2015 which is part of the grant performance information for Project with code UGD-011-G09-S revealed that while most objectives attained adequate and even beyond expectations rating, key grant information indicate that objective 4.1- (number of staff trained on data management and logistics management system), attained only 13% from period 1-5 which is rated as Overall, on 23rd September 2012, GoU agreed with the Global Fund that grant funds support commodities, while GoU and in-country partners would funds in country operations including training. To date, GoU has not provided the funds for in-country operations and training. The 13% performance on training was possible with support from partners like MEEPP, METS and SURE and for N/A The issue is sustained II 19

unacceptable. The table below and Appendix IV show the details. Period. 1 2 Target. 450 1,380 Results. Resut pending 0 0 the funds used to orient 60 RPMTs on DHIS2 data management as part of the critical health systems strengthening activities which were accepted by exception. Lack of trained staff in data and logistics management constrains efficiency in data collection, storage and quality. Recommendation The Accounting Officer is advised to prioritize training of data and logistics management staff for effective handling of project data and logistics. 5.2 Key Grant Performance (Program Impact and Outcome indicators) - HSS Grant Although there was satisfactory results in the areas of Treatment success rate, new smear positive TB cases and Percentage of live births attended by skilled health personnel that were above the target, Maternal mortality ratio (per 100'000 live birth, Child Mortality (per 1000 live births, Infant Mortality Rate (per 1000 live births treatment according to national policy, did not have results to show baseline survey out-come from goal 3, while goals I and 2 did not show any impact indicators. The summary table below and Appendix IV refer. The result for this indicator will be obtained from the Uganda Demographic and Health Survey and the AIDS Indicator Survey, which are yet to be conducted. The timelines for these two population based surveys were postponed. N/A The is Kept In View I Goal Impact indicator 20

Goal 1 Goal 2 Goal 3 To Reduce the incidence rate of HIV by 40% by the year 2012 To improve the quality of life of PHA by mitigating the health effects of HIV/AIDS by 2012 To build an effective support system that ensures quality, equitable and timely service delivery There were no Impact Indicators into this Goal. There were no Impact Indicators into this Goal. App IV. The reasons for failure to have impact indicators on some of the goals were not clear. Recommendation The Accounting Officer is advised to ensure compilation and submission of impact indicators for ease of assessment of progress made. 6.0 Review of prior year audit recommendations A review of the status of implementation of prior year audit recommendations revealed the status indicated in Appendix III. Delayed implementation of prior year audit issues hinders attainment of the project objectives. Recommendation Refer to responses in appendix A significa nt number of issues are still remain unresolv ed The issue is sustained 1 The Accounting officer is advised to ensure that audit 21

recommendations are implemented promptly so as to attain the project objectives. 22