Friday, 13th January 2017

PRESS RELEASE
Parliament sourcing auditors for Office of the Auditor General
Following a media reports implying that the Auditor General has blocked an internal
audit of the Office of the Auditor General (OAG) for the last twelve years, the Office
of the Clerk to Parliament would like to clarify that the most recent attempt at
auditing the OAG was unsuccessful.
The process, which involved a consortium of three firms: Nexia Johnson & Johnson
CPA, Kisaka & Co CPA and Data Figure & Co. CPA ended up in arbitration due to
accusations and counter accusations amongst the parties involved.
On 1st August 2014, the Consortium was awarded a six months contract ending on
28th February 2015, to audit the OAG for the period covering the financial years
2005/2006 2012/2013.
However, disagreements amongst the three partners in the consortium emerged
following the payment of a mobilization fee of Ushs 224.6m to Nexia Johnson &
Johnson CPA on their behalf.

Following the failure by the consortium to act, audit and report to the Speaker
about the auditing process according to the contract, the Parliaments Contracts
Committee terminated their contract, acting on the basis of a recommendation by
the Contracts Manager.
The arbitration however, was concluded and awarded in the Parliaments favour.
As a result, a new process has been started by the Parliamentary Commission to
procure an auditor for the OAG. This will be the third attempt by Parliament to audit
the Office of the Auditor General, further indicating the importance Parliament puts
to its accountability and oversight functions.
Parliament, through both the plenary and its committees is at the core of
demanding and ensuring proper accountability of public funds. It shall continue to
pursue this line of securing, through a smooth and transparent process, the required
competent firms to carry out an audit of the Office of the Auditor General as
prescribed by the law.
The Office of the Auditor General audits public expenditure, through conducting
audits and investigations to assess the efficiency, effectiveness and accountability
of public sector agencies and their programmes. The Auditor General reports to
Parliament.
ENDS

Department of Communication and Public Affairs

Parliament of Uganda
Friday 13th January 2017

Background Information

On 1st August, 2014, the Parliamentary Commission entered into an agreement

with a consortium comprising of Nexia Johnson & Johnson CPA, Kisaka & Co CPA
and Data Figure & Co CPA to audit the Office of the Auditor General. The six months
contract period ending on 28th February 2015 was to cover the financial years
2005/2006 2012/2013.

On 8th September 2014, Nexia Johnson & Johnson was, on behalf of the

partners paid UShs 224.6 million as mobilization fees for the execution of the
contract. Following this payment, disagreements arose among the three partners,
with Nexia Johnson & Johnson accusing Kisaka & Co CPA and Data Figure & Co
CPA of conflict of interest.

In the meantime, the lead partner solely carried out the work contrary to the

agreement that required the audit to be done by three or more firms.

Following the conflicts, the Contract Managers Report to the Clerk to

Parliament, it was agreed that the contract be terminated, and indeed, on 24th
February 2015, the Contracts Committee terminated the contract.

The contract was terminated on grounds that the consortium had failed to

perform the obligations under the contract in terms of the agreement. Nexia
Johnson & Johnson referred the matter for arbitration.

Nexia Johnson & Johnson accused the Clerk to Parliament of failing to present

the Draft Audit Report and Confidential Note to the Parliamentary Commission; lack
of cooperation by OAG and Parliamentary Commission; and the collapse of the
audit consortium.

A legal interpretation of the contract and matters accruing showed that:

The audit was not carried out by the consortium as was required by the

contract but rather carried out by only Nexia Johnson & Johnson CPA

No audit report, financial statements or management letter was ever produced

and submitted by the consortium

No audit report was ever submitted to the Speaker of Parliament

The consortium did not commence the contract services nor did they execute

the services within six months as required by the contract signed between the
Parliamentary Commission and the consortium.

Findings above show that there was noncompliance with the agreement

signed between the Parliamentary Commission and the consortium comprising of

Nexia Johnson & Johnson CPA, Kisaka & Co CPA and Data Figure & Co CPA to
audit the Office of the Auditor General, which led to the its cancellation.

ENDS