The following trial balance was prepared by the Authority as at 31

December, 2016.

Shs

'million'

Shs

'million'

Leasehold property at valuation 31 December, 2015 1,120

Land 200,130

Power stations 900,056

Office plant & equipment 3,544

Prepaid operating lease rentals (50 years lease term) 2,100

Accumulated depreciation/ amortisation

Power stations 394,528

Office plant & equipment 1,261

Operating lease rentals 956

Work in progress (Karima & Isika projects) 51,000

Cash & cash equivalents 20,521

Inventories at year end 500

Receivables from exchange transactions 20

Non-current receivables from non-exchange transactions 800

Long-term borrowings 32,000

Capital contribution from the Government of Uganda 300,000

Revaluation reserve (power stations) 9,000

Accumulated surplus/ (deficit) 31 December, 2015 96,220

Transfers from other government entities 350,000

Fees, taxes and fines 18,576

Other operating revenue 973

Wages, salaries & employee benefits 5,632

Supplies and consumables used 17,891

Finance costs 200 -

1,203,514 1,203,514

Additional information:

1. The Authority prepares its financial statements on accrual basis in

accordance with the International Public Sector Accounting Standards

(IPSASs).

2. During the year, the Authority incurred land acquisition costs amounting to

Shs 560 million for Kabwoko Hydro Power Project in respect of

compensations to Project Affected Persons (PAPs). Although valuation had

been completed by the end of the year, none of the PAPs had been paid.

3. Costs amounting to Shs 870 million were incurred on on-going projects of

Karima and Isika Hydro Power Projects. The costs incurred to date mainly

consist of civil works, staff costs and project management consultations.

No entries have been made in the books of account in relation to these

costs despite payments being made to the service providers.

4. During the year, the Authority entered into two binding arrangements with

the following companies as detailed below:

Eskon Uganda Limited

On 3 January, 2016 the Authority entered into a binding arrangement with

Eskon Uganda Limited (Eskon), a private company. The agreement

required Eskon to operate Authority's two hydropower dams of Kiila and

Nakabaale power stations for a period of 25 years. By this date, the

Authority had incurred total costs on these two dams amounting to Shs

324 billion and accumulated depreciation amounting to Shs 121 billion.

The agreement also required the Authority to control and regulate the

services Eskon must provide with the two power stations, to whom it must

provide them, and the price to be charged.

During the year, Eskon also did some major upgrades to the two power

stations amounting to Shs 3.4 billion. The Authority has guaranteed to

pay Eskon 30% of the costs incurred in the following year and the balance

after two years.

Kingfisher Limited

On 5 February 2016, the Authority entered into another agreement with

Kingfisher Limited (Kingfisher), a private company for a period of 30 years.

The agreement required Kingfisher to construct a mini hydro power plant

in Zombo district. The company completed the construction of the plant

by 31 June, 2016 at a cost of Shs 130 billion. The agreement requires

Kingfisher to earn revenue each year from the users of the dam not

exceeding 10% of the invested amount which is still outstanding. All the

revenue due for 2016 was received by the company.

5. The installed capacity of the power complex (Nakabale and Kiila) is 380

megawatts (MW). However, the average capacity generated during the

year was about 140 MW. This is an indicator of impairment, and as such

the Authority performed an impairment assessment resulting into an

impairment of Shs 7 billion. However, the impairment loss has not been

accounted for in the Authority's books of account.

6. The 15-year leasehold property was acquired on 1 January, 2015 at a cost

of Shs 300 million. The company policy is to revalue the property at

market value at each year end. The valuation in the trial balance of Shs

1.12 billion as at 31 December, 2015 led to an impairment charge of Shs

29 million which was reported in the income statement of the previous

year. At 31 December, 2016 the property was valued at Shs 2.4 billion.

7. The Authority's policy is not to charge any depreciation in the year of

acquisition of the asset. Power stations are depreciated at 3% on a

straight line basis, office plant & equipment are depreciated at 10% per

annum on a reducing balance basis.

Required

Prepare, for Uganda Electricity Generation Authority for the year ended 31

December, 2016 a statement of:

(i) financial performance. (10 marks)

(ii) financial position as at 31 December. (18 marks)

(b) You are provided with the following transactions relating to different public

sector entities in Uganda for the year ended 30 June, 2016. All these

entities follow the accounting and reporting framework prescribed by the

Accountant General.

1. On 13 August, 2015 a Kampala City Traffic Control Project (KCTCP)

submitted a United States dollars (USD) 30,000 Withdrawal

Application to World Bank (International Development Association

(IDA), to be settled directly to a contractor named KK Consulting

Engineers Ltd (KK) for consultancy services. The funds were

transferred to the contractor on 30 August, 2015. IDA advised the

project coordinator through a payment advice with a value date of

30 August, 2015 accordingly.

2. Richmond University admitted a student named Kakooza to

undertake a course in finance. The fees were Shs 2 million per

semester payable at the commencement of the course. The 1st

semester of the course commenced on 1 February, 2016. Kakooza

paid the full fees on 20 May, 2016.

3. An agreement for a two-year project between SIDA (donor) and

Rural Electrification Project required the community to contribute

10% of the agreement value of Shs 500 million for provision of rural

electricity. This was to be provided in kind through communal

labour by helping in carrying and fixing electric poles. The project

commenced on 1 July, 2015 and was to end after two years on 31

May, 2017. The donor disbursed their contribution Shs 450 million

on 31 August, 2015. No criteria were provided for the valuation of

community contribution in the course of the project implementation.

4. During the month of June, 2016 the gross salaries payable to the

public officers under the Ministry of Tourism totaled Shs 99,495,450

made up of the following:

Shs

Net salary 73,680,450

Pay as you earn 15,300,000

Employee social security contributions 3,015,000

Employee medical insurance contributions 2,500,000

Other employee contributions 5,000,000

As the employer, Government contribution towards social security

and medical insurance was Shs 5,025,000 and Shs 2,500,000

respectively. The salaries are settled through the Single Treasury

sub-accounts. Assume the payrolls were forwarded and received in

the Treasury on 25th of the month and that the relevant payment

instructions were sent to Bank of Uganda on 27 June.

Required:

For each of the above transactions, show all the necessary ledger

entries, including narratives, as at 30 June, 2016.

(15 marks)

(c) The Government of Uganda Financial Reporting Templates have been

designed to ensure that reporting from ministries, departments and

agencies (MDAs) and local governments comply with the Government

reporting requirements and International Public Sector Accounting

Standards (IPSASs).

Required:

Discuss the following statements of the Financial Reporting Templates,

giving a description of the key features of each statement.

(i) Statement of appropriation account by services voted.

(ii) Statement of appropriation account by nature of expenditure.

(iii) Statement of reconciling total expenditure as per performance and

appropriation.

(iv) Statement of outstanding commitments.

(7 marks)

(Total 50 marks)

SECTION B

Attempt two of the four questions in this section

Question 2

(a) Procurement Planning is a process of determining the procurement needs

of an entity and the timing of their acquisition and their funding such that

the entity's operations are met as required in an efficient way.

Kalumpi District Local Council has allocated local revenue Shs 380 million

raised from leasing its market to purchase furniture, stationery, land and a

pickup truck for its administration department. The budgetary allocation

to the items is to be in the ratio 1:3:4:5 respectively, and the user

department has advised that furniture and stationery shall be required in

the first quarter while land and a pickup in the third quarter of the financial

year ending 30 June, 2019.

Required:

Draft a procurement plan for Kalumpi District Administration Department.

(6marks)

(b) Discuss the stakeholders in procurement planning and their responsibilities

in local governments in Uganda.

(10 marks)

(c) In accordance to Public Procurement and Disposal of Public Assets Act,

2003 evaluate the circumstances under which a procuring and disposing

entity may:

(i) reject the bidding documents of a prospective bidder. (5 marks)

(ii) negotiate with the contractor, in respect of a proposal by the

contractor.

(4 marks)

(Total 25 marks)

Question 3

(a) Over the years, the Government of Uganda has undertaken many finance

and payroll reforms including the implementation of Integrated Finance

Management System (IFMS), Integrated Payroll and Pension System

(IPPS), Fixed Assets and Inventory Management System (FAIMS), Human

Resources Information Management System (HMIS), Debt Management

and Financial Accounting System (DMFAS), among others.

Required:

(i) Assess the benefits of IFMS implementation to Government in financial

management.

(5 marks)

(ii) Discuss any five modules in IFMS clearly explaining the roles under

each module.

(10 marks)

(b) In line with many other countries, Government of Uganda has adopted

systems that will enable it to conform to International Public Sector

Accounting Standards. It has, for instance, adopted a chart of accounts

which is useful from budgeting to reporting.

Required:

Examine the various segments of the Government of Uganda chart of

accounts.

(10 marks)

(Total 25 marks)

Question 4

(a) (i) With examples and reference to the relevant International Public

Sector Accounting Standards (IPSAS), describe the General

Government Sector.

(4 marks)

(ii) Evaluate the relevance of disclosure of appropriate information

about the General Government Sector in financial statements as

envisaged in the relevant IPSAS.

(6 marks)

(b) IPSAS 24: Presentation of Budget Information in Financial Statements

requires that, an entity shall present a comparison of budget amounts for

which it is held publicly accountable and actual amounts, either as a

separate additional financial statement or as additional budget columns in

the financial statements currently presented in accordance with IPSASs.

Required:

Discuss the likely causes of differences in the amounts in the financial

statements and the budget.

(8 marks)

(c) An entity may carry on foreign activities in two ways. It may have

transactions in foreign currencies or it may have foreign operations. In

addition, an entity may present its financial statements in a foreign

currency. International Public Sector Accounting Standards (IPSAS) 4 sets

out disclosure requirements for such entities.

Required:

Discuss the disclosure requirements set out by IPSAS 4 above.

(7 marks)

(Total 25 marks)

Question 5

(a) The Ministry of Local Government is organising an induction seminar for

the newly appointed Assistant Chief Administrative Officers (ACAOs) and

Sub-Accountants for Atutur District Local Government (ADLG) on their

roles in the management and control of public resources under their care.

You have been invited as an expert in matters of public financial

management.

Required:

Prepare paper for presentation highlighting the duties and functions of

the following in public financial management:

(i) Duties of ACAO (10 marks)

(ii) Functions of a standing committee of Council (5 marks)

(iii) Functions of the Executive Committee of Council (6 marks)

(b) With reference to The Local Governments (Financial and Accounting

Regulations, 2007), discuss the procedures necessary for replenishment

and retirement of imprests.