July 18, 2013

Accounting Officers To Blame For Budget Indiscipline – Economist

The financial advisor to the Minister of Finance and Economist Fred Muhumuza has noted that budget indiscipline in the country is the major cause of supplementary budgets that come up after the financial budget is passed.
 
He noted that this partly comes as a result of the failure for accounting officers not to account for requirements needed by a particular Ministry or Sector fully before the budget frame work paper is done and National Budget passed.

Finance Minister Maria Kiwanuka
Finance Minister Maria Kiwanuka

He cited that it is not allowed for any accounting officer to recruit new staff without informing and approval from the Ministry of Finance. This is because new staff within the running of the financial year encourages budget indiscipline since it will necessitate a supplementary budget to pay salaries for the newly recruited staff.

He suggested that contracts need to be improved so that they are not provided within the financial year.

He noted that some accounting officers and ministries ask for supplementary for issues that are not emergency in nature. A supplementary budget should be requested only to deal with unexpected emergencies.

Muhumuza, however, refuted the argument that sometimes the supplementary budgets brought in after passing the national budget exceed the total of the initial budget. He insisted that supplementary can never exceed the national budget because it arises from the national budget itself.

Muhumuza noted that some of the solutions to reduce on supplementary are to be strict with accounting officers by either reprimanding them or warning them not to exercise budget indiscipline.

Muhumuza also noted that it is important for the enforcement of the law that stops accounting officers from recruiting new staff when they were not budgeted for in the national budget.

The Shadow Minister of Finance and Chairperson Parliamentary Network on the World Bank and International Monetary Fund, Ekanya Geoffrey said that the challenge in the budget process is the indiscipline of the Executive.

He explained that by the time the supplementary comes to Parliament most of the resource has been diverted without following the guidelines.

He noted that this was the reason why Supplementary schedule 3 was rejected by the budget committee saying that they could not continue to violet the constitution and the Public Finance Accountability Act.

Ekanya further explained that last year’s Financial Budget for development component for most of the districts was not released saying that the budget process was losing meaning and becoming an affair that has no tangible result on the ground but is there to fulfill Constitutional obligation.

He appealed to MPs and Citizens of Uganda that the main challenge Parliament is getting is the State House Budget and Presidency which he said is over utilizing resources to extent of borrowing from commercial banks and also drawing down from Bank of Uganda which he said is Budget indiscipline.

When asked why Parliament is failing to play its oversight role over the Budget and to ensure that budget indiscipline is reduced, Ekanya said that the Majority members in the House who are NRM have out reason reasoning saying that Parliamentary power has been usurped by the President’s intimidation to the NRM members.

MP Chris Baryomunsi knowledgeable about Budget issues said that Parliament has not failed to carry out its function saying that supplementary budgets normal and happens in every country and he described it as something that as not budgeted for or planned for and it is necessary to budget.

When asked whether supplementary budgets are a bad budget discipline, Baryomunsi said that they are not necessarily bad but that when government forwards supplementary budget requests they should be addressing critical areas to address the lives of the people.

Baryomunsi noted that Parliament is proposing a law to create a special fund where money will be collected and it is this from this special fund that government should draw in case of unforeseen emergencies.

However he emphasized that with supplementary budgets it is important to ensure that when money is allocated should go to critical areas aimed at improving quality of lives of people not wasteful areas that do not help the population to advance.

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