An economist from the ministry of finance tells Uganda Radio Network that there is a lot of ambiguity surrounding the unspent balances. He says there is no clear mechanism to limit the potential for abuse and diversion of the monies after they are sent back to the consolidated fund.
This is in fulfillment of Section 19 (1) of the public finance and accountability act 2003 which stipulates that every appropriation by Parliament of public moneys for the service of a financial year shall lapse and cease to have any effect at the close of that year.
According to the auditor general’s reports, Ugx 22.8 billion was returned to the consolidated fund as unspent balances from government departments in 2012. The amount reduced to 11.4 billion shillings in 2013. However, it remains unclear where the money goes after it’s reverted.
However, an economist from the ministry of finance tells Uganda Radio Network that there is a lot of ambiguity surrounding the unspent balances. He says there is no clear mechanism to limit the potential for abuse and diversion of the monies after they are sent back to the consolidated fund.
The source, who spoke on condition of anonymity, added that because the monies are reverted to the consolidated fund when the subsequent budget has been allocated, they are not absorbed in that budgeting process.
The source says government needs to declare at whatever time the money returns to the consolidated fund so that it is clear where it re-enters the budget and where it is receipted.
He adds that the process needs to be closely monitored by the Auditor General in order to establish how much has been returned and how it is appropriated and incorporated into the budget. He says the absence of such a monitoring system only fosters corruption.
But one of the Auditors attached to the Office of the Auditor General says that the money is audited. He says when money is not spent it is returned to the consolidated fund where all government money is saved.
Similarly, the ministry of finance Permanent Secretary Keith Muhakanizi says that unspent balances is utilized through supplementary budgets that cater for subsequent budget shortfalls in various government departments.
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He said that it is done to curb inefficiency and to get ministries to do what they requisitioned money for in time adding that returning the money is the only way to ensure that it is not misused.
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Recently the Finance ministry warned all government spending units that have failed to utilize all the budget funds and instead returned them to the treasury at the end of the financial year.
The warning followed an observation that even departments which cry about underfunding, continue to return unspent money to the consolidated fund. These include hospitals, Public Service Commission, National citizenship and Immigration Centre and Office of the Prime Minister among others.
However, it is hoped that the newly adopted payment system, the Integrated Financial Management System (IFMS), will improve the efficiency in the management of public funds.