LGFC’S TROUBLED SCORECARD! Missing Assets, Unimplemented Activities, Poor Planning & Revenue Failures Expose Management Gaps at Local Government Finance Commission
KAMPALA — The Local Government Finance Commission (LGFC), the government body charged with advising on the financing and revenue of local governments, has come under scrutiny after the Auditor General uncovered a series of weaknesses in asset management, planning, revenue mobilisation, monitoring and implementation of its strategic plan.
The findings raise questions about how effectively the Commission has been executing its mandate, particularly at a time when local governments continue to face pressure to deliver essential public services amidst corruption crackdown led by Minister Balam Barugahara.
The Auditor General’s 2025 assessment found that several activities under the Commission’s strategic plan were either only partially achieved or not implemented, while some assets recorded in the Commission’s books could not be traced and verified.
The audit also identified a Shs8.601 billion funding shortfall under the Commission’s 2020/21–2024/25 strategic plan, which affected efforts aimed at improving property rates and other emerging local revenue sources.
The Commission is chaired byIsaac Isanga Musumba, with Mariam Nalubega as Vice Chairperson. Other commissioners are Emma Boona, Sumbua Naima, Martine Unzia, Joseph Lomonyang and Ndifuna Mathias.
The Commission Secretary is Babale Adam, supported by senior managers and technical officers responsible for finance and administration, revenue and research, financial analysis, accounting, planning, information technology, procurement, internal audit, grants, data analysis and local revenue.
Among those holding key technical positions are Senior Manager Finance and Administration Ojok James, Senior Manager Revenue and Research Andema Fred, Principal Financial Analyst–Local Revenue Ogwang James, Principal Accountant Mugerwa Ssewankambo Andrew and Principal Planner Bageya Jean.
The audit found that there were no operational reports to establish whether the Commission’s assets were contributing to service delivery outcomes as intended.
According to the Auditor General, this could result in inefficient service delivery and potential wastage of resources.
The Commission was also found not to have an asset management policy providing documented procedures for monitoring the utilisation of non-current assets, including usage logs, downtime reports and performance indicators.
The shortcomings extended to maintenance.
The Auditor General found that the Commission lacked operational maintenance budgets. Work plans were instead prepared based on the asset base, while maintenance logs were not maintained to document maintenance activities, costs or the personnel involved.
The audit further revealed that five of the Commission’s motor vehicles did not have logbooks and were not insured, exposing the entity to increased risk.
More questions were raised over the Commission’s computers, accessories, furniture and fittings.
A total of 66 non-current assets valued at Shs141.80 million, which had been recorded in the Commission’s asset register, could not be traced and verified.
The findings come against the background of the LGFC’s wide constitutional and statutory responsibilities.
The Commission is established under Article 194(1) of the 1995 Constitution, with its mandate and functions defined under Article 194(4) and operationalised through the Local Government Finance Commission Act, 2003.
Its functions include advising the President on the distribution of revenue between the Central Government and local governments and recommending allocations from the Consolidated Fund.
The Commission is also expected to consider, in consultation with the National Planning Authority, and recommend to the President the amount to be allocated as equalisation and conditional grants and their distribution to local governments.
It analyses annual local government budgets to establish compliance with legal requirements and advises on appropriate tax levels.
The Commission also mediates financial disputes involving local governments, recommends potential sources of revenue and advises on the percentage of the national budget that should be transferred to local governments each financial year.
It can further recommend Central Government taxes that can be collected by local governments on an agency basis.
Despite this wide mandate, the Auditor General found significant gaps in the implementation of the Commission’s own strategic plan.
Out of 107 planned activities, only 61 were achieved. Another 25 were partially achieved, while 21 activities were not implemented.
The National Planning Authority’s certificate of compliance gave the Commission an overall performance score of 65 per cent.
The audit also found that the Commission had aligned itself to only four of the 17 National Development Plan III indicators across its three programmes.
Several activities lacked performance indicators or targets, making it difficult to monitor and evaluate the progress of implementation.
The Auditor General also raised concerns over the Commission’s monitoring and evaluation arrangements.
The LGFC did not have an annual monitoring and evaluation framework. Instead, it relied on the five-year monitoring and evaluation framework contained in its Strategic Plan.
The revenue side of the Commission’s mandate also came under scrutiny.
The audit identified gaps in revenue collection relating to royalties from mining and minerals, royalties from generation licences and wildlife royalties, with the weaknesses linked to inconsistencies in the legal framework.
The Commission had also struggled to collect its own non-tax revenue.
During the period under review, it collected only Shs9.7 million in non-tax revenue, representing just 1.2 per cent performance and denying government resources that could have supported implementation of activities.
The Auditor General further pointed to delays in enacting amendments to legal provisions intended to enhance local revenue sources.
According to the report, these delays had negated efforts to improve revenue mobilisation and collection.
Another major concern relates to the amount of money reaching local governments.
The Local Government Strategic Plan 2020/21–2024/25 set a target of 22 per cent as the share of the national budget to be allocated to local governments, based on constitutional provisions.
However, only Shs37 trillion, equivalent to 17 per cent, was allocated.
This represented a shortfall of Shs5.18 trillion, or five per cent, from the planned revenues.
The Auditor General warned that if the trend is not checked, it could undermine service delivery in local governments and weaken the decentralisation of service delivery.
The Commission’s strategic plan funding also fell short by Shs8.601 billion, equivalent to 19 per cent.
The funding gap affected the realisation of activities concerning property rates and other emerging local revenue sources intended to enhance local government revenue performance.
The audit also examined the implementation of previous recommendations contained in Treasury Memoranda.
Out of eight recommendations covering the financial years 2013/14 to 2019/20, four, representing 57 per cent, were fully implemented.
Two recommendations, representing 28 per cent, were only partially implemented, while one recommendation was not implemented.
The findings paint a picture of an institution facing challenges in translating its mandate and plans into measurable results.
The weaknesses range from assets that cannot be traced, vehicles without logbooks and insurance, and inadequate maintenance systems to incomplete strategic-plan activities, weak monitoring arrangements and poor non-tax revenue performance.
For an institution whose central role is to advise Government on how resources should be distributed to local governments and how local revenue can be strengthened, the findings also raise broader questions about the Commission’s own financial and institutional performance.
The Auditor General’s findings now place renewed attention on whether the LGFC can strengthen its internal systems, improve implementation of its strategic objectives, account for its assets, mobilise revenue and provide the advice required to support Uganda’s decentralisation framework.
GOT A HOT STORY? LET US KNOW!
Got breaking news, explosive secrets, or hard evidence?
Email us: redpeppertips@gmail.com
We accept tips, documents, videos, photos, and recordings—the more evidence you have, the better.
CONFIDENTIALITY IS OUR TOP PRIORITY. SOURCES ARE ALWAYS PROTECTED!
About Post Author
