PRESENTER BY
NYERO PASKA
DISTRICT INTERNAL AUDIT – GULU DISTRICT
LOCAL GOVERNMENT.
TOPIC: FRAUD DETECTION AND PREVENTION.
CASE STUDY:
NATIONAL AGRICULTURAL ADIVISORY
SERVICES (NAADS) IMPLEMENTATION IN
GULU MUNICIPALITY.
REF: STATUTORY INTERNAL AUDIT REPORT
2010/2011 FINANCIAL YEAR .
Gulu District Local Government
BACK GROUND.
NAADS is a programme designed by government to target
the local communities at parish and village levels in our local
settings. Government came up with this programme with the
aim of empowering the communities by providing farm
implements, improved seeds, animals, birds etc depending
on the needs identified by the communities. The programme
is community driven and the power of needs identification,
beneficiary selection and procurement of all supplies vest
with the communities. The district and Municipal council
authorities
only
guide
the
processes,
monitor
implementation and also offer technical back stopping
through the extension services. The audit department is
there to assure, the NAADS implementation guidelines are
adhered to and internal controls are effective and assure
value for money for public funds.
Gulu District Local Government
STRUCTURE OF LOCAL GOVERNMENT
SETTING
CENTRAL GOVERNMENT
DISTRICT LOCAL GOVERNMENT
MUNICIPAL COUNCIL
DIVISIONS
PARISHES
VILLAGES
Gulu District Local Government
FUNDS FLOW ARRANGEMENT
NAADS SECRETARIAT
GULU DISTRICT GENERAL FUND ACCOUNT
GULU DISTRICT NAADS ACCOUNT
DIVISION NAADS ACCOUNTS
Gulu District Local Government
FUNDS FLOW ARRANGMENT
• NAADS SECRETARIATE
• DISTRICT LOCAL GOVERNMENT
• DISTRICT NAADS ACCOUNT
• DIVISION NAADS ACCOUNT
Gulu District Local Government
AREA/ISSUES
Farmer
process
AUDIT FINDINGS
selection 

ACTION LINE
Relatives of local councils are 
selected to benefit other than the
venerable communities.
Gender issues not considered as per
the
NAADS
implementation
guidelines

RECOMMENDATIONS
TO
MANAGEMENT ON UNCLEARED
ISSUES
Demand for files for 
farmers’ selected and
verify with the local
authorities on the ground
to confirm participation of
all members of the
communities.
Confirm
whether
mobilization was done by
the leaders during the
selection process.
Were the guidelines have
not been followed, the
selection must be nullified
and the process repeated.
Unspent balances to
remitted back to
treasury and authority
use must be given by
centre as required.
Unspent balances

Unspent balances not returned to 
the treasury at the end of the
financial year.
Demand for evidence of 
refund of unspent balances
to the treasury.
Accountabilty

Funds not accounted for interms of 
receipts,
signatures,
payment
schedules of participants etc.
Demand
for
accountabilities
in
forms.
Gulu District Local Government
the 
all
be
the
for
the
Funds be recovered from
the responsible officers.
cont……….
Unsupported
expenditures

Taxes

Funds spent on various activities 
are not supported with the
relevant documentations like,
minutes of meetings, attendance
list of participants in training,
activity reports, letters of
contract awards and agreements
signed
with
suppliers,
distribution lists of items to the
farmers.
Taxes provided for well posted in 
the books of accounts but not
remitted to the authorities.
Demand for all the relevant 
supporting documents stated
for verification.
All funds not dully
supported
with
the
necessary documentations
must have not been used
for the intended purposes
and should be refunded
back by the responsible
officers.
Demand for evidences of tax 
remittance to the authorities
Any financial loss caused in
terms of penalties due to
non compliance to the laws
must
be
borne
by
individuals who caused the
loss.
All the unremitted taxes
must be remitted as
required by law

Gulu District Local Government
Village
level 
procurements(p
rocurements
handled by the
village
procurement

committees



Lack
of
proper
documentations of the
procurement processes in
terms of minutes and
attendance lists.
Supplies are not inspected
by the sector specialist ie
either
veterinarian,
agriculture
extension
officers to confirm order
against quotations like age
of animals and birds, type
of seeds and quality.
Internal auditors do not
witness
deliveries
of
supplies as a control
measure
to
confirm
delivery, quantity and
quality.
Inflation of prices like for
animals procured
Procurement committees
do not witness the
deliveries of supplies as
required
by
NAADS
implementation
guidelines.






Demand
for
all
documentations that are
required for community
procurements.
Demand
for
inspection
reports from the sector
specialist confirming the right
delivery has been made.
Demand for deliveries notes
well signed by internal audit
staff.
Compare price list issued by
the procurement unit at the
district against what they
quoted.
Demand
for
lists
of
procurement committees and
conduct field verifications
during audit to confirm the
right
people
on
the
committee have signed the
documents as witnesses
Conduct
field
physical
verifications
to
confirm
supplies.
Gulu District Local Government





The committee be held for
defrauding the process and
causing financial loss to the
division
Any loss caused by lack of
inspection
must
be
recovered
from
the
responsible officers.
All deliveries to verified by
the auditors as clearly
stipulated in the guidelines
Any loss caused as a result
of over inflation must be
recovered
from
the
responsible officers.
Any supplies not witnessed
by the village procurement
committee is not valid and
proper explanation be given
or action of refund of
money be taken from the
responsible officers.
Unauthorized payments
Work
implementation

plan 
Un authorized sale of 
enterprises
by
the
farmers.
Funds
used
for 
implementation of
programme
not
authorized by the
senior assistant town
clerk at the division (
principal signatory)
Activities outside the 
approved work plans
implemented.
Demand
explanations
management
for 
from
Funds
must
be
refunded back by the
responsible officers.
Demanded
explanations
management
for 
from
Funds
were
recovered from the
responsible officers.
Animals
especially 
goats
and
farm
implements like oxplough were sold by
farmers for financial
gains against the
NAADS guidelines.
Demanded
explanations
management
the farmer.
for 
from
and
The
responsible
farmer was arrested
and should replace
back the enterprise
sold.
Other
benefits
extended to that
farmer be re-located
to
other
needy
members of the
community.
Gulu District Local Government

Lastly, I would like to share with the participants that,
the recommendation that we made to management has
greatly improved the way the programme is now
implemented in the divisions in Gulu Municipality.
The Gulu District Local Government Public accounts
committee an equivalent of the Audit Committee in the
Private sector played it’s oversight roll so well and made
management to act on our recommendations.
The office of the Resident District Commissioner also
played a big role to ensure our recommendations are
acted upon by management.
The Municipal councilors also followed up on how the
divisions implemented our recommendations.
The office of the Auditor General also used our report
to make follow-up during their annual audit and this has
helped a lot in improving the situation the ground.
Gulu District Local Government
STEPS IN THE COMMUNITY PROCUREMENT PROCESS
Activity
Description
Responsibility
1. PROCUREMENT
PLANNING
Based on participatory
planning at the sub
county.
- Consult community
members and identify
requirements/specificat
ions, quantities, prices,
procurement schedule
Parish community
Procurement
committee (PCPC),
supported by NAADS
Sub county
coordinator and
subject matter
specialist
2. ISSUE REQUEST FOR
QUOTATIONS BASED
ON SPECIFICATION
- To at least 3 bidders
for local shopping
- To single bidder for
Direct procurement.
Parish Community
Procurement
Committee (PCPC)
Gulu District Local Government
STEPS IN THE COMMUNITY PROCUREMENT PROCESS Cont..
3 - EVALUATE
QUOTATIONS
Analyze quotations
select lowest evaluated
bidder( meeting
specifications and
lowest evaluated price)
Parish Community
Procurement
Committee (PCPC)
4 -AWARD CONTRACT
Announce the award
to all bidders
Send a report of
decision of award to
Assistant Town Clerk
Receive a letter of
acceptance from
successful bidder
Parish Community
Procurement
Committee (PCPC)
Gulu District Local Government
STEPS IN THE COMMUNITY PROCUREMENT PROCESS Cont…..
5- PLACE CONTRACT
6 RECEIVE GOODS
(FARM INPUTS &
TECHNOLOGIES) &
ENSURE THEIR
DISTRICTBUTION
-Issue purchase order
for goods (farm inputs
& technologies)
-Check quantity and
quality
-Obtain delivery note,
-Witness delivery
Gulu District Local Government
Assistant Town Clerk
PCPC
Parish Community
Procurement
Committee (PCPC),
Beneficiaries,
Internal Auditor/SMS
where necessary
STEPS IN THE COMMUNITY PROCUREMENT PROCESS Cont…..
7- PAY SUPPLIER
- Pay supplier
Assistant Town Clerk
PCPC
8 – KEEP RECORDS
- Maintain procurement
files
Gulu District Local Government
Assistant Town Clerk
PCPC
THANKYOU FOR LISTENING
Gulu District Local Government