CSBAG BUDGET NEWS BRIEF

3rd EDITION | 27th January -2nd February 2014

...advocating for people centered budgets

Key Local Governments priorities for FY 2014/15 Budget

In this edition, CSBAG brings highlights of a
paper presented by the President of the Uganda Local Government Association (ULGA) during the National Consultative Budget Conference FY 2014/ 2015. The paper highlighted key issues that need to be addressed in the Financial Year 2014/2015 budget in order to strengthen revenue generation, budget implementation and service delivery at the Local Government level
The key concerns included the gap between the needs at Local Government level and the budgetary decisions taken at the Central Government level. This situation, according to the ULGA President is made worse by the continuing trend towards limiting the discretionary and decision making powers of Local Governments. According to ULGA, the current trend which borders on recentralization of powers and authority is grossly impeding planning for development and this has resulted into the current growing voice of dissatisfaction amongst the citizens on the type and quality of services local governments deliver which are often time contract to their expectations. Financing local service delivery has continued to decline with even the little provided to local governments placing much emphasis on recurrent expenditure at the expense of development programmes. The Central Government remains content with the Central Government and Local Government budget sharing ratio which currently stands at 85% to 15% yet it is at the Local Governments that the bulk of service delivery happens. According to ULGA analysis, a further breakdown of the 15% indicates that 9% goes to recurrent expenditure and ONLY 6%, is left for the delivery of services. Because of this situation, Local Governments have been branded non-performers and institutions that lack capacity to deliver on their mandates. ULGA requested government to revisit the sharing of the National Budget allocation from 15% to at least 40% if Local Governments are to cause the necessary change in performance and delivery levels as expected. Local Governments have continued to grapple with resource constraints that cut across financial, human capital, tools and equipment yet often time, and they lack the financial muscle and the supportive policies. To emphasize this, an example was shared about the delays experienced in securing approvals to replace a deceased or retired member of staff even when the resources are available. This according to ULGA is a huge disincentive for staff in Local Governments that neither favors retention nor Local Governments, thanked Ministry of Finance and the Local Government Finance Commission (LGFC) for ensuring that this financial year, unlike the previously, the Sector Conditional Grant Negotiations between the Local Government and Central Government were held in September 2013 ahead of the Cabinet Retreats, First National Budget Consultative workshop, Sector Working Groups, Inter Ministerial consultative meetings, National and Local Government Budget workshops, all being key budgetary processes for the FY 2014/2015. ULGA hopes this will lead to a difference in the budgetary priorities for grant transfers to Local Governments where decision making at the Centre is guided by the positions agreed upon during the negotiations although there are still concerns that the current focus is only on Conditions and not Programmes. ULGA requested the Leader of Government business, to establish a mechanism that will ensure compliance in the implementation of the agreed positions from the Sector Negotiations. Specifically ULGA called for inclusion as a performance measure in the Permanent Secretaries performance Contracts, them being signatories to the Negotiation Agreements. This was after it was noted that very often, Partners from the Central Government agree to positions, in the presence of key stakeholders like the Ministry of Finance and Ministry of Public Service, and yet they fail to implement. Worse still, defaulting Ministries rarely provide written communication to Local Governments with a clear explanation on the reason for defaulting. Local Governments further noted the growing delays in honoring of Presidential Pledges. According to the ULGA President, Local Government Leaders often suffer the wrath of the communities when the Presidents promised infrastructure /assets are not delivered within the timeframe of the need. Some of the unfulfilled pledges according to ULGA are over five years old. Local Governments therefore suggested that funding to meet the Presidential Pledges should be financed outside the Sector Conditional Grants, as additional funding, instead of using the existing inadequate district funding. Under the Agriculture Sector, Local Governments are experiencing delays in approval of the Production Department structure which has created a vacuum the Local Governments resulting budget in Centralin Government to Local Governments

Fredrick Gume NgobiPresident Uganda Local Government Association (ULGA) and District Chairperson, Jinja.
attraction of competent staff. ULGA called for specific timeframe within which the public service should respond to queries made on replacements to streamline the process and ensure effectiveness. In particular, where there is confirmation that Local Government have the budget to replace and fill a vacancy arising out of death or related circumstances, they should be allowed to go ahead and do so. Further still, Local Governments grapple with identifying of alternative sources of revenue to finance their activities. With the inadequate performance of the current sources mainly the Local Service Tax and Hotel Tax, coupled with the politicization of taxes, Local Governments have remain at cross roads and called upon Central Government to intervene. Specifically, ULGA made a strong recommendation to scrap off the 25% limitation imposed on local revenue funds retainable by Lower Local Governments in particular the SubCounty, and the 20% limitation on local revenue to be used for District Local Council business. There was a concern that the Local Government Budget framework Paper workshop which communicates the key policy and administrative issues for consideration in the preparation of an upcoming financial year engages only Local Government representatives from Districts and Municipalities. ULGA proposed that future workshops should be coordinated by Ministry of Local Government supported by the Ministry of Finance. In addition, Local Governments are concerned about the Unreliable Indicative Planning Figures (IFPs) usually adjusted downward. This is made worse by the fact that communication on change in the IPFs is done within the first week of the new quarter, which affects activity implementation, and destabilizes service delivery. ULGA therefore suggested that the existing guidelines pertaining to the application of National Planning Indicative Figures be followed.

LOCAL GOVERNMENT BUDGET FACTS

sharing ratio is 85% to 15% 9% of the 15% LG budget share goes to recurrent expenditure 6% is for development expenditure Local Governments want Budget share ratio increased to 40%

Produced by the Civil Society Budget Advocacy Group (CSBAG). Vubya close, Ntinda Nawaka Stretcher Road| P.O BOX 660, Ntinda Fixed line +256 755202154 |website: www.csbag.org, Email: csag@csbag.org

Key Local Governments priorities for FY 2014/15 cont

Under the Agriculture Sector, Local Governments are experiencing delays in the approval of the Production Department structure which has created a vacuum in the Local Governments resulting in poor service delivery specifically at the Sub County level. A reminder was made to Ministry of Agriculture and other relevant institutions to expedite the approval of the new production single spine structure at all levels of local governance by December 2013. Local Governments further called for the expansion of the District Trade and Commercial Services Grant to cover all to all Districts and Municipalities in order to promote harmonized growth and prosperity for all. ULGA noted that the Trade and Commercial Services Grant are only functional in 15 districts out of the 112 leaving the remaining 97 District Local Governments not covered. In addition, the 15 districts are only receiving this annual budget support of 7.2million per district which is unrealistic. The following recommendations were made by ULGA about improving the Education and Sports Sector: a) To facilitate effective implementation of education services, USE Grant releases should reach school accounts two weeks before the term opens. b) Ministry of Education should provide disaggregated Indicative Planning Figures for each Secondary School and the expenditure guidelines to all the LG Accounting Officers to enable them monitor and demand accountabilities from the schools. c) Ministry of Education should issue a circular instructing all head teachers to submit their accountabilities to the LG Accounting Officers. d) There should be increment in the UPE Capitation Grant from Ugshs5, 000 per pupil per annum to at least Ugshs10, 000 per pupil per annum. In conclusion, ULGA called upon Government to give due attention to the above issues that would enhance Local service delivery if adequately addressed.

SUPPLEMENTARY BUDGET FACTS

This week, Cabinet approved three (3) supplementary budget requests for presentation to Parliament.

Ug Shs60 billion request to cover police requirements ahead of the 2016 general elections. Ug shs 138 billion for operationalization of the troubled National Identity Card project ahead of the 2016 general elections Ug shs1 billion for hosting the 15th EAC summit of heads of state.

e) To facilitate effective implementation of education services, USE Grant releases should reach school accounts two weeks before the term opens. f) Ministry of Education should provide disaggregated Indicative Planning Figures for each Secondary School and the expenditure guidelines to all the LG Accounting Officers to enable them monitor and demand accountabilities from the schools. Dependency syndrome coupled with bad attitudes largely explain why a substantial segment of the population d) Ministry of Education should issue a circular survives on less than two dollars a day, a panel of experts discussing why some citizens are excluded from major instructing all head teachers to submit their economic sectors have said. Read More accountabilities to the LG Accounting Officers. e) There should be increment in the UPE Capitation Grant from Ugshs5, 000 per pupil per annum to at least Ugshs10, 000 per pupil per annum. Officials from the National Agricultural Advisory services (NAADS) have failed to account for over Sh 7billion that was disbursed to different beneficiaries in various districts to carry out NAADS activities. According to the auditor generals report the financial In conclusion, ULGA called uponfor Government to year ended June 30, 2011/2012, NAADS effected payment of the money without the approval of the issues NAADS accounting officer. Read more give due attention to the above that I have raised to enhance Local service delivery to all our people and urged Line Ministries not to view Local Governments as executing agencies of their duties but instead, view as Eight health centres in them Ntungamo District have never received health workers and drug supplies ever since they decentralized entities with autonomous decision were constructed 10 years ago. Some have since been turned into stores while others are hideouts for thieves. making over Read local public more services. He asked government to give due attention to the above issues that I have raised to enhance Local service delivery to all our people.

Budget news that made headlines in the media

Dependence spreading poverty experts

NAADS officials fail to account for Shs 7billion.

Shs400m health units abandoned

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