This reform involved a phased approach to the adoption of Output-Based Budgeting (OOB) since the early 2000s which was later supported by an Output Budgeting Tool (OBT) during the FY2008/09 to FY2016/17 period.

The OBT was an IT-based budgeting tool that is used by the ministry of finance to coordinate budget implementation in terms of work plans, outputs and expenditure. At the beginning of every fiscal year, line ministries, government departments, and agencies and local governments generate data on staff names and work plans within the budget as provided by the budget framework paper that indicates planning figures. The work plans are matched with anticipated outputs and expenditure estimates. On a quarterly basis, the ministry of finance generates reports to monitor the progress of budget implementation at the different levels of government.

The OBT prepared pathways for the introduction of the Programme Based Budgeting and the use of the Programme Based Budgeting system. This is part of the PFM reforms phasing strategy of Uganda.

To sustain the new reform, additional economists as part of the graduate economists scheme has been supported by the FINMAPIII programme and continues to be operationalised under REAP.