Decentralization of the internal audit function.
Treasury Single Account
Upon recognizing how government banking arrangements are an important factor in managing and controlling government’s cash resources. Also knowing that they are critical for ensuring that (i) all tax and non-tax revenues are collected and payments are made correctly in a timely manner; and (ii) government cash balances are optimally managed to reduce borrowing costs (or to maximize returns on surplus cash). This is achieved by establishing a unified structure of government bank accounts via a treasury single account (TSA) system. Under the Treasury Single Account (TSA), government ministries, departments and agencies receive money from a single Treasury account on a quarterly basis
In these age and time of how things are done especially in Public Finance management, a TSA is a prerequisite for modern cash management and is an effective tool for the ministry of finance/the treasury to establish oversight and centralized control over government’s cash resources. And also to provides a number of other benefits thereby enhancing the overall effectiveness of a public financial management (PFM) system. The establishment of a TSA was, therefore, a priority as a PFM reform.
With effect from 1st October 2013, Government of Uganda (GoU) introduced a Treasury Single Account (TSA) in which all government cash balances are aggregated into a set of linked accounts. The primary objective of the TSA was to ensure management of GoU aggregate cash balances in order to: Minimize transaction costs during budget
execution; Ensure efficient control and monitoring of funds released to various Government agencies; and better coordination between fiscal and monetary policy implementation initiatives of government.
The operations of the TSA over the period under review were analysed, and it was noted that despite having challenges in the transition period, the implementation has been largely successful. It was noted that: the arrangement has led to the closure of a number of redundant accounts, which could have been avenues for misuse of funds; it has greatly improved treasury cash management; as at 30th June, 2014, cash is only available to entities which can absorb it; and it is envisaged that in subsequent years, borrowing from the domestic market will be greatly reduced.
Aid and debt management reforms
The Government of Uganda began rolling out the Aid Management Platform (AMP) to Development Partners and users by making the system available online in November 2013. Development Partners were now able to input directly into the system while Government Ministries both supplemented on the data and used it for planning, monitoring, and reporting purposes.
Training is currently being conducted with all development partners and other sector ministries. The objective is to ensure that development partners and government users have the ability to enter their aid data into the online system. The Aid Liaison Division hopes that PIMIS data users – from development partners and government – are able to access and use the system both for input and reporting purposes.
The Aid Management Platform is a software solution allowing users to manage activities through the planning, implementation, and evaluation stages. Through online workspaces, data entry and reporting modules, and interactive dashboards and maps, decision makers can allocate resources where most needed. The Aid Management Platform helps governments and development partners gather, access, and monitor information on development activities, with the goal of increasing aid effectiveness.
Using the AMP software, stakeholders can track activities through the planning, implementation, and evaluation stages. With online workspaces, data entry and reporting modules, and interactive dashboards and maps, decision-makers can better understand how aid is directed throughout the country.
To ensure sustainability, the program implementation includes hands-on training for government and development partners, data management plans, ongoing technical support, policy support for program management, and a semi-annual Good Practices Workshop
Integrated Personnel and Payroll System
In 2014, wanting to reduce on the number of ghost government workers within its different departments, an Integrated Personnel and Payroll System (IPPS) is a computerized and web-based Human Resource Management Information System was rolled out in government Ministries, Departments, Agencies and Local Governments (MDAs & LGs) to perform various human resource functions. The implementation of IPPS was part of the Public Service Reform programmes aimed at strengthening accountability and improved service delivery through automation of Human Resource functions and provision of reliable and timely information for decision making.
Currently, four modules notably Payroll Management, Pension Management, Establishment Control and Training Management are functional. In addition, MDAs & LGs were able to access electronic records on the Electronic Document Management System (EDMS) through IPPS.
A total of 242 MDAs and LGs are using IPPS to process salary, pension and gratuity. Of these, 173 are connected to IPPS on site. The balance of 69 votes access IPPS at the 10 Regional Support Centres. These Centres, were established to ease access to IPPS for votes that still lack the required infrastructure. This has reduced administrative costs of travel to Kampala and led to improved service delivery and timely quality support.
It is worth noting that IPPS is a component of Public Financial Management Reforms under the Third Financial Management and Accountability Programme (FINMAP III) purposed at improving timeliness, accuracy and accountability of Government salary and pension payments.
SERVICES PROVIDED THROUGH THE PROJECT
- Decentralized management and processing of salary, pension and gratuity payments for public officers, pensioners and survivors;
- Establishment management for the approved structures of Ministries, Departments, Agencies and Local Governments;
- Employee Information management that stores the master data of a particular officer for the entire work life;
- Electronic Document Management System (EDMS) as an integral part of the IPPS that supports the records management business processes for ease of access to personnel records and mail correspondences by decision makers. It facilitates storage, retrieval and use of electronic records of Public Officers and pensioners.
- Payroll cleaning through biometrics validation of Public Officers and authenticating their particulars against National ID database;
- Functional and technical support to IPPS users on site, at the help desk and Regional Support Centres; and
- Audit trail for all transactions executed on IPPS.
Integrated Financial Management System
The Integrated Financial Management System (IFMIS) was launched in August 2014 to monitor how ministries, departments and agencies utilize funds on a real-time basis in a bid to improve budget implementation. As an electronic system, the automation of public procurement processes to seal the loopholes in the manual system through which state officers stole public funds.
With the Integrated Financial Management System (IFMIS), government of Uganda is able to monitor their geographically dispersed local governments and administrative units.
With the implementation of this web-based system, Government of Uganda has gained real-time access to information about grants from different sources, increased efficiency, enhanced visibility of taxation requirements, quick and effective decision making, hassle free procurement process, improved budgeting and streamlined revenue management, compliance with reporting, and automated accounting processes.
IFMS Implementation Strategy
The IFMS has been implemented in a phased manner to ensure success and to provide GOU with a process of effectively and efficiently managing the transition from the current state to the future desired state. Some of the key Principles applied were:
i. Central Acquisition of the system adopted
ii. Central Management of the system agreed on
iii. Decentralised ownership of data
iv. A Turnkey Concept was adopted
Pilot implementation was conducted in 6 ministries and 4 local governments between February 2003 and October 2004. Rollout implementation has since progressed to another 12 Ministries and 6 Local Governments and will conclude December 2006.
In the Pilot and on-going Rollout implementation phases, the IFMS has focused on key Expenditure Management Systems that include the:
i. Accounting and Reporting (General Ledger),
ii. Budgeting, Purchasing and Commitment Accounting,
iv. Cash Management and Revenue Receipting/Accounts Receivable.
vi. Public Sector Budgeting including Activity Based Costing and OFA
The Fixed Asset Management, Inventory Control and Debt Management modules will be implemented at a later stage. Government recognises the need for increased efforts in revenue collection activities for Local Governments. Plans for the acquisition of a Local Government Revenue Module (LGRM) are under review.
IFMS Governance Structures
Benefits of the IFMS Documented by Users at a Review Workshop in June 2005
- Faster operations
- Increased level of transparency
- Harmonized Chart of Accounts
- Timely, relevant and accurate info
- Effective Budgetary and commitment control
- Reduction in number of bank accounts
- Reduction in amount of paper work
- Improved Information security
- Timely and easy access to information
- Movement and tracking of documents for approval
- Ease of Monitoring and reporting
- Training and skills enhancement for staff
Operational Independence of the OAG Physical
In government’s bid to improve and streamline an effective and efficient supreme Audit Institutions geared towards Promoting Public Accountability. The Office of the Auditor General was in 2014 given an operational independence to undertake audits and to provide assurance on use of public resources on behalf of the citizens of Uganda through Parliament.
In the system of governance in Uganda, responsibility and accountability go together. The Executive collects, disburses and manages public funds. Each government agency is answerable to the public and the taxpayers, on the manner in which it performs its stewardship functions. The institution of the Office of the Auditor-General, also known as the Supreme Audit Institution of Uganda, has been created by the Constitution and the National Audit Act 2008 to act on behalf of the citizens of Uganda, in providing an independent assurance on the use of public resources (Article 163 of the Constitution).
Consistent with the Constitution, the Auditor General conducts audits, and investigations to assess the efficiency, effectiveness, and accountability of public sector agencies and their programs. Enhancing and strengthening accountability is the central objective of OAG’s audit of public expenditure.
Audit reports on the performance of the government provides opportunity to the legislators, public servants, investors, business leaders, citizen groups, media, development agencies, academicians and other stakeholders to know how public funds are spent and to assess the quality of public administration. This allows public scrutiny of Government operations and generates pressure for honest and productive public servants and facilitates an accountable system of governance necessary for efficient service delivery.
The Office forms part of the Accountability value chain, works with Parliament and the Executive in promoting accountability and good governance as illustrated in accountability cycle below:
Public Finance Management Act
With this Act, consolidation and amendments to provisions in the Budget Act, 2001, repealed the Public Finance and Accountability Act, 2003 and introduced sections for the management of petroleum revenue. Consequently, affecting the Budget calendar by reducing the budget preparation and approval process from twelve to nine months.
The Public Finance and Management bill (PFMA) was passed by parliament on 27th November 2014. The President assented to it on 23rd February 2015 and it gazetted on 6th March 2015. Though the Act was amended even before it could make its first anniversary, the amendments didn’t affect the budgeting process as it remained in its totality in the Principal Act.
With this particular process, improvement in tax collection was most likely to be realized. Unlike under the Budget Act of 2001, where tax proposals and allocations were debated well into the start of the financial year which used to disrupt the revenue collection targets because some taxes revenues were rejected, others reduced though new ones could be rarely introduced.
Programme-based Budgeting System
With this reform Government aimed at shifting from output Based Budgeting which had no direct link between allocations and expected outputs. We are glad that by the FY 2016/17, the PBB approach came into use. The budget performance reports were more focused on physical and budget performance with little or no regard to expected outcome.
Reporting for most MDAs was more on routine activities like payment of contractors (on 2 seed schools in Kyenjojo and Rubirizi) and clearing of arrears, celebrating international days as opposed to strategic level budget achievements that impact quality of service delivery
Key to Program Based Budgeting sought to replace the then ‘Output Based Budgeting’ that had exhibited weaknesses including: instances of mixup of outputs and processes as illustrated in various Ministries Departments and Agencies’ budget documents. The other weakness was the absence of a well-defined system to enforce accountability.
It further hindered MDAs capacity constraints in policy implementation and preparation of results based on sector strategic frameworks and linkages to the budget.
Low commitment of Government to set medium term fiscal framework (aggregate resource envelope) financing continues to affect effective sector implementation in the medium term.
Macro-Economic forecasting reform – IMEM
With the Integrated Macro Economic Model (IMEM), The Directorate of Economic Affairs finalized the development of the IMEM Model in June 2017. The model is currently being used for economic policy analysis and forecasting. This milestone was a key enhancement of capacity in technical analysis and forecasting of the major macroeconomic aggregates. The model is also being used to assess economy-wide implications of current and planned Government interventions. The IMEM Model is composed of the following three modules;
a) The Computable General Equilibrium (CGE) Model mainly for sectoral analysis,
b) the Macro-Econometric Model (MEM) for macroeconomic analysis and
c) the Micro-Simulation Model (MSM) for social welfare analysis.