Local governments will determine how to utilize local generated revenues following the passing of a motion by Parliament. The motion sought to reverse an earlier directive that required local governments to remit these monies to the Consolidated Fund.
In February 2020, the Permanent Secretary for Ministry of Finance, Planning and Economic Development directed all local government accounting officers to remit all local revenue into the Consolidated Fund.
On Wednesday, 08 September 2021, the House proposed that local governments utilise local revenues without remitting them to the Consolidated Fund to hasten service delivery.
Wakiso District Woman MP, Hon Ethel Betty Naluyima who moved the motion said that remitting funds to the Consolidated Fund affected service delivery.
“When local governments remit these revenues, what they get is inadequate to meet the planned expenditures, she said adding that ‘this affects delivery of services, such as construction, maintenance of roads, education and health facilities’.
She argued that the Section 30(l) provide for local governments to collect local revenue and retain a proportion to facilitate operations and service delivery.
Hon Santa Okot (PPP, Aruu North County) said that asking local governments to remit 100 per cent of all local revenues whose expenditure is at the discretion of central government, disempowers local governments.
“You may be aware that in most cases when district roads are graded, they are not maintained or rehabilitated; this is because funds are still at central government and services such as collection of garbage in town councils and municipalities tend to stall,” said Santa Okot.
Kumi District Woman MP, Hon Christine Apolot said the challenge in the current arrangement is the delay in funds disbursement at the Finance Ministry.
“When the local revenues are sent to the Consolidated Fund and are delayed, you find that district councils cannot operate even when there are urgent matters. Accounting officers will say we cannot do anything until we get funds from the central government,” Apolot said.
MPs who previously served in local governments noted that there is a general decrease in morale in revenue collection because of delays and that most often the funds received from the centre are inadequate.
Bardege-Layibi Division MP, Hon Martin Ojara Mapenduzi, who served as Gulu District Chairperson said the mode of operation at the Finance Ministry has killed the morale at local government leading to poor service delivery.
“Every financial year, the ministry makes decisions and policies, which are taken without preparing local governments on how to implement them. Local governments keep on struggling on how to keep up with new changes and when they fail to implement, money goes back to treasury”, said Mapenduzi.
The Government Chief Whip, Hon Thomas Tayebwa said there were irregularities within the local government which influenced the Finance Ministry’s directive. “Some Local Governments were inflating their budgets for local revenue and would fail to recover the 25 per cent advance of their appropriated budget released in the first quarter,” said Tayebwa.
He added that the 2015/2016 Auditor General’s report stated that local governments had unspent balances which were not remitted to the Consolidated Fund.
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