For continuing donor-funded initiatives, Parliament has encouraged the government to release cash as soon as possible.
The directive comes after the Committee on Finance, Planning, and Economic Development’s report on unspent balances and the Consolidated Fund’s status as of June 30, 2023, was presented.
On Wednesday, January 31, 2024, during the plenary session, Hon. Amos Kankunda, the committee chairperson, presented the report.
According to the report, even though funds are available, the Finance Ministry has not released over Shs385 billion as unspent warrants for ongoing projects funded by the World Bank, Uganda Support to Municipal Infrastructure Development (USMID), and The Uganda Intergovernmental Fiscal Transfers (UgIFT).
A portion of the study stated, “As of July 1, 2022, warrants to various local government votes totalling Shs734.8 billion had not been spent, with 37% going to UGIFT and 20% to USMID.”
An accounting officer who has been granted a warrant by the Treasury is authorized to commit and expend funds up to the warrant amount within a specific fiscal year.
According to Kankunda, there were Shs3.77 trillion in unspent warrants—that is, authorized expenses that were never paid for—at the end of the fiscal year.
The committee noted that this was one of the factors contributing to the increase in domestic arrears.
The Finance Ministry, as well as the technical officers working for ministries and local governments, were deemed by MPs to be negligent in this situation, which they considered intolerable.
“The World Bank may withhold the financing since they are worn out from multiple meetings here. Why isn’t the government paying, they wonder? Municipalities hired vendors; they are dissatisfied, but funding is available,” stated Hon. Persis Namuganza, the state minister for housing.
MPs noted that in supplemental budgets, warrants with outstanding balances should be given priority. Is it not a basic budgetary principle that arrears should be called upon first? The deputy speaker, Thomas Tayebwa, who presided over the meeting, said,
“We implore the ministry to give these projects a chance when considering the supplementary schedule, prioritizing donor-funded projects.”
Hon. Sarah Opendi, the Woman MP for Tororo District, stated that there is an anomaly in the way donor-funded projects are implemented that has to be rectified.
This anomaly occurs when a single contractor is awarded many contracts without having the necessary financial resources.
One contractor that you located has contract lots in the northern, western, and eastern regions, but he doesn’t have enough money. I would want to suggest that a contractor receiving funding from donors not be awarded more than one lot for a project,” Opendi stated.
She berated technical officers for their carelessness in starting purchases near the end of the fiscal year, knowing full well that this will result in unused warrants and, eventually, a spike in domestic arrears.
“As an illustration of procurement, districts are aware of exactly what they require, but they initiate the procurement process in April, which is excessively drawn out,” she continued.
The MPs demanded an additional audit of the unspent amounts for staff recruiting wages totaling Shs58.9 billion.
“I don’t understand why, in a society where replacements are constants, we have refused people services.
We should never stop recruiting because we acknowledge that death is a reality, according to Hon. Aisha Kabanda (NUP, Butambala District Woman Representative).
Hon. Henry Musasizi, Minister of State for Finance (General Duties), promised to release cash for projects supported by donors and that he will review the Hansard to identify the MPs’ proposals.
We can stop certain warrants from remaining unspent because to inadequate preparation. Accounting officers are required under the commitment control systems to commit government when a work plan is in place.
According to Musasizi, it ought to be amended to state that an accounting officer should not commit government when there is no money.
According to Musasizi, government entities are obligated to submit bills to the Finance Ministry, which will be honoured based on available funds, as part of the current finance framework.
The Finance Ministry issues warrants that specify spending restrictions under the single treasury account.
Parliament amended the report to require the government to acknowledge its warrants in opposition to this.