Ministry of Finance has issued strict guidelines to be followed by accountants in the Local governments during implementation of the “unusual” 2019/20 national budget.
The budget, which was read out by Finance Minister Matia Kasaija in June, later underwent a major review to eliminate unnecessary expenses.
This was meant to mitigate the severe impact of the Covid19 pandemic on the country’s local revenues and external budget support.
A budget review committee headed by Gen Salim Saleh, the head Operation Wealth Creation (OWC) identified several expenditure items to be eliminated, which included among others allowances, travel, workshops and seminars and entertainment.
Gen Saleh’s team had reportedly proposed a staggering Shs 5.3 Trillion cut to the passed budget, which was however, protested by the Finance Ministry.
The Ministry in the subsequent meetings with Gen Saleh’s team argued that some of the proposed cuts would severely impact government programs, while other votes were protected by law and couldn’t be touched.
In the end, both sides agreed on to eliminate consumptive expenditure totaling Shs 440.6Billion, down from Shs 5.3 Trillion.
In a budget implementation circular sent out this week, Finance Ministry Permanent Secretary Keith Muhakanizi cautioned the local government accountants to strictly adhere to these budget changes.
“I wish to emphasize to all Accounting Officers that the execution of the Budget for this FY 2020/2021 is not ‘business as usual’, considering the prevailing socio-economic impact of the COVID-19 and other natural disasters that hit the economy, causing a review of the appropriated Budget,” he said.
“It is important that we adhere to the guidance by H.E. The President and the principles stated herein this Circular in order to successfully implement the Growth Strategy and Economic Stimulus Package to boost our economic recovery.”
Muhakanizi called on the Accounting Officers to “be frugal by reviewing their work plans and activities, and apply more cost effective interventions such as virtual meetings and seminars in order to be in line with the realities posed by COVID-19 and other disasters.”
According to the PS, the Shs 440Billion will be allocated to key priority areas as advised by President Museveni.
These include; food security, health care provision, access to clean water, restoration of household income and safeguarding jobs, reigniting business activity, provision of tax relief to businesses, improving peace, security and good governance among others.