Parliament has urged government to expeditiously release funds for donor-funded projects whose activities are ongoing.
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| Hon. Amos Kankunda. |
The directive follows the presentation of a report of the Committee on Finance, Planning, and Economic Development on unspent balances and the position of the Consolidated Fund as of 30 June 2023.
The report was presented by the Committee Chairperson, Hon. Amos Kankunda during the plenary sitting on Wednesday, 31 January 2024.
The report indicated that
the Finance Ministry has not released over Shs385 billion as unspent warrants
for ongoing projects under the World Bank funded, Uganda Support to Municipal
Infrastructure Development (USMID) and The Uganda Intergovernmental Fiscal
Transfers (UgIFT) despite the availability of funds.
“On 01 July 2022, warrants to various local government votes equivalent to
Shs734.8 billion had not been spent, 37 per cent was for UGIFT and 20 per
cent was for USMID,” read the report in part.
A warrant is authority given by the Treasury to an accounting officer to commit
and spend up to the amount of the warrant in a particular fiscal year.
Kankunda said that, by the closure of the financial year, Shs3.77 trillion remained as unspent warrants, which are the authorised expenditures that were never cashed. The committee observed that this was among the drivers for the rising domestic arrears.
MPs said this was unacceptable and a reflection of
negligence on the side of the Finance Ministry and the technical officers
within ministries and local governments.
“The World Bank has been here in several meetings, they are tired, and they
might withdraw the funding. They wonder why government is not paying.
Municipalities contracted suppliers, they are frustrated yet the money is
available,” said the State Minister for Housing, Hon. Persis Namuganza.
MPs observed that such
unpaid warrants should be prioritised in supplementary budgets. “Is it not a
principle that arrears should have the first call in the budget? We urge the
ministry to give these projects opportunity when considering the supplementary
schedule, prioritising donor-funded projects,” The Deputy Speaker, Thomas
Tayebwa who chaired the sitting, said.
Tororo District Woman MP, Hon. Sarah Opendi said there was an irregularity
within implementation of donor-funded projects that ought to be addressed,
where an individual contractor is given multiple contracts without the required
financial capacity.
“You find a single contractor with contract lots in the eastern, western, and
northern regions but without sufficient funds. I want to propose that for
donor-funded projects, a contractor should not get more than one lot,” Opendi
said.
She castigated the
negligence on the side of technical officers who initiate procurements towards
the closure of the financial year, cognizant that this is destined to lead to
unspent warrants and ultimately, a rise in domestic arrears.
“An example of procurement, districts know exactly what they need but they wait
for April to start the procurement process which is too lengthy,” she added.
MPs called for a further
audit of unspent balances worth Shs58.9 billion as wages for staff recruitment.
“I do not know why we have denied people services when we live in an
environment of continuous replacements. We know death is a reality and
recruitment should be ongoing,” said Hon, Aisha Kabanda (NUP, Butambala
District Woman Representative).
The Minister of State for
Finance (General Duties), Hon. Henry Musasizi said he would study the Hansard
to pick out MP’s recommendations and pledged to release funds for donor-funded
projects.
“There are some unspent warrants as a result of poor planning that we can
prevent. The commitment control systems require accounting officers to commit
government when there is a work plan. It should be changed to say no accounting
officer should commit government when there is no money,” said Musasizi.
Musasizi explained that the current financing mechanism is that the Finance Ministry under the single treasury account, issues warrants indicating the spending limits, and as such government entities are required to submit invoices which the ministry will honor depending on cash at hand.
It is against this, that Parliament passed an amendment to the report for the government to own up
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