The Ministry of Finance on Friday released Shs4.321 trillion as government’s budget expenditure for the second quarter of the current financial year, which represents 29.3 per cent of the approved budget.
While releasing the funds in Kampala, the Permanent Secretary, Mr Keith Muhakanizi, urged accounting officers to clear all salary arrears by the end of November 2018.
“Salary, pension and gratuity arrears released must be paid by the end of November 2018, pointing out that payments must be made only to verified claimants and verified amounts should be paid according to the schedule that will be sent to Accounting Officers in a separate communication,” said Mr Muhakanizi, who is also the Secretary to the Treasury.
He explained that Shs778 billion has been released for local governments to cater for expenditures like wages, non-wages, development, pension, gratuity, salary arrears and pension and gratuity arrears.
In the past, the Local Governments have blamed the central government for not releasing funds to them in time and they have also complained of underfunding, which in a way has affected the outcomes of the planned programmes at the local level.
However, Mr Muhakanizi said: “You will note that the development budget for Local Government is 33 percent of the approved budget. This is in line with government commitment to release funds for local governments timely in order to minimize procurement delays and by giving them enough time for implementation of government programmes so as to avoid unspent balances at the end of the financial year.”
According to Mr Muhakanizi, the Quarter Two releases to local governments were effected based on their annual work plans, quarterly work plans and annual cash flow plans.
“It is the responsibility of Accounting Officers to ensure timely transfer of funds to health units and all lower local government directly to their institutional bank accounts,” he added.
In the current financial year, all local government budgets were prepared using the Programme Budgeting System (PBS) for the first time. As a result, there were challenges experienced in budgeting that led to submission of detailed budget estimates for FY2018/19.
“Consequently, some local governments were unable to timely access their funding. However, the challenges encountered have since been resolved and as such local governments are expected to implement their planned activities for quarter two without any hindrances,” Mr Muhakanizi said.
Muhakanizi also revealed that Shs95 billion has been provided for the National Medical Stores, with Shs10.1 billion going to the elderly grant.
He added that cumulatively, a total of Shs18.004 trillion has been released for expenditures as at half year, representing 55.1 per cent.
For the mission abroad, he said, no funds were released except where front load were requested since a decision was taken to release funds twice in a financial year that is 50 per cent in July (first quarter release) and 50 per cent in January 2019 (third quarter release) purposely to guard against loss of poundage and enable missions to meet obligations that require one-off payment such as rent.
Similarly, the second and last release of funds to public universities excluding external financing is scheduled for January 2019 in line with the semester system to cater for expenditure for quarter three and quarter four.
For expenditure limit under External Financing, the release has been based on the projected disbursements profiles provided at the onset of the financial year, he said.