13 January 2014

Uganda Loosens Salary Payments

Kampala — Uganda's Ministry of Finance, Planning and Economic Development has decided to decentralize the management of the payroll with effect from January 2014.

This is a move aimed at ensuring proper payroll management as well as avoiding accumulation of arrears,

This was disclosed by Keith Muhakanizi, the Secretary to Treasury at a press briefing convened last week to announce the release of the third quarter funds.

He said decentralizing the pay roll will help the Ministry identify the accounting officers responsible for any anomalies like ghost workers found on their pay rolls.

He said: "Under the current arrangement, the payroll is centralized under the Ministry of Public Service and so it becomes difficult to hold anyone accountable as there is a deflection of the blame. When there is a problem with any vote, the whole public service is paralyzed. The accounting officers will instruct treasury. After verification, funds are then transferred. The advantage is there will be no delays in payments even if there is a problem with any vote. We shall implement this in phases and by June 2014, the whole payroll will be decentralized."

Muhakanizi questioned why the Ministries and Departments were not paying arrears to their suppliers yet they had funds.

Though absorption of the last quarter release was at an impressive 90 per cent, most of the funds were only absorbed in the last three weeks of the 2013.

Muhakanizi said: "Apparently some officers said the new system was stifling their operations. But if you can absorb the money in three weeks, then it means the system works. So that is what every accounting officer should explain. It's easy to absorb the funds... why should they (Accounting officers) accumulate arrears when they have money on their account? If you have arrears, just pay on time."

He said the recently implemented Treasury Single Account will help reduce idle resources in various bank accounts.

In addition to the Quarter 1 and Quarter 2 releases, the Ministry released the Ush2.37trillion for the third Quarter (January - March 2014). The money released last week brings the total funds so far released to USH6.67trillion or 77 per cent of the FY2013/14 approved budget excluding Karuma, Non Resource taxes and external financing.

The breakdown of the funds shows that Ministries and Agencies a total of Ush1.75trillion, Local governments will receive Ush585b, Missions abroad Ush23.9b while Referral Hospitals will get about Ush16b.

The Uganda National Roads Authority (UNRA) receives the highest allocation with Ush239b, Ministry of Defence receives Ush163b, the Road fund Ush76.8b. Ush247.6b will go into treasury operations.

The ministry has also released Ush162.7b for primary school teachers' salaries while Ush53.8b has been released for secondary school teachers' salaries for the three months (January to March 2014).

Muhakanizi said all accounting officers including Head teachers of all government aided schools must pin on a public notice board the funds received and what it will be used for.

"This is a directive from the President that all of us should exercise accountability. So by the end of the week, all teachers in these schools as well as their salaries should be clearly displayed on these notice boards."

He also added that the funds released for education grants will be going directly to the intended schools.

According to the Ministry, starting this month, pension payments under Ministry of Public Service will be paid through the Integrated Financial Management System so as to improve on management and timeliness of pension payments.

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