Ministries, departments, agencies and local governments failed to spend Shs 349.7 billion out of the Shs 33.3 trillion in the 2018/19 financial year.
The Public Finance Management Act, 2015 provides that all unspent balances be sent back to the Consolidated Fund as at 30 June. The ministries, departments, and agencies failed to spend Shs 210 billion while local government failed to absorb Shs 139.5 billion.
National Agricultural Advisory Services (NAADS) secretariat failed to spend Shs 39.7 billion, Parliamentary Commission Shs 27 billion, Petroleum Authority of Uganda Shs 16.5 billion and ministry of Energy and Minerals Shs 9 billion.
Police failed to spend Shs 5.7 billion, Mulago hospital Shs 5.5 billion, National Citizenship and Immigration Control Shs 4.3 billion and Uganda National Roads Authority (UNRA) Shs 3.4 billion.
Others that failed to spend Shs 1-3bn include Uganda Bureau of Statistics, Office of the Auditor General, and hospitals of Kabarole, Hoima, Jinja, Mbale, Makerere University Business School and Soroti University.
The Local Governments include Kitgum which returned Shs 2.2 billion, Wakiso district Shs 6.2 billion, Gulu district Shs 4.5 billion and Kabale district Shs 3.6 billion. Others are Mbarara Shs 3.1 billion, Tororo Shs 3.7 billion, Kagadi Shs 2.6 billion and Kitgum municipal council Shs 1.2 billion and Nebbi municipal council Shs 2.2 billion.
Lawrence Ssemakula, the accountant general explains that most of the entities failed to absorb funds due to failure to verify pension claimants and also pay wages for positions that had not been filled by end of the financial year.
"For example, we can say is that the Office of the Prime Minister could not absorb Shs 1.4bn but this is related to gratuity, to pension…You could have wage at the beginning of the financial year and then you have not recruited. And If you have not recruited, you can’t pay, so that has to come back. The only issue are those who have big ones like NAADS, why do you return all that money and yet it was given to you. You see NAADS has like Shs 39bn and with agricultural input of about Shs 37bn. So if you couldn’t absorb that...those are the ones you should ask issues." said Ssemakula.
In FY 2017/2018, Shs 22.4 billion was unspent out of the approved budget of Shs 29 trillion. Ssemakula says that the unspent funds cannot easily be proposed for allocation in the budget for the next financial year, a proposal MPs and civil society organizations have demanded several times.
Though the ministries, departments and local governments attribute late release of funds to low absorption of funds and also failure to implement planned activities due to revenue shortfalls, Ssemakula says some delays are related to the approval and payment process, mostly at local government level.
He explains that some districts, mostly new districts lack capacity and infrastructure to accommodate the Integrated Financial Management System (IFMS) which is automated.
"The first and foremost [problem] is capacity because there are districts where the capacity is really wanting - right people in the right places and the staffing levels in those local governments is an issue. The other issue are infrastructural, the infrastructural is that to operate this system you must have an automated system…This applies to the new districts. They have to take time to understand the processes and this causes a bit go delay. The alternative would be for us to do those operations for them but then we don’t want a vote to say treasury has paid people who are not mine. They must own the processes." Ssemakula added.
In his report for 2017/2018, the auditor general noted flaws in the IFMS, saying that some accounting officers had paid Shs 180 million to one beneficiary on the same day while some sent money to their personal accounts, not third parties as expected. Therefore, there is need to roll out IFMS to also local governments.
The accountant general records all government expenses and at the end of the financial year, he or she must specify amount of funds spent, unspent and the closing balance or actual cash in the Treasury.