Reforms undertaken by the ministry of finance to curb misappropriation of public funds in government ministries and departments are yielding positive results, researchers reveal.

A report by Economic Policy Research Centre (EPRC) researchers Ezra Munyambonera and Musa Mayanja Lwanga says encouraging results can now be seen from the public finance management reforms started in 2012.

The reforms include the implementation of the treasury single account (TSA); upgrading the integrated financial management system (IFMS), and the integrated personnel and payroll system (IPPS), started to improve wage and payroll management and stop excesses in government expenditure.

Titled A review of Uganda’s public finance management reforms (2012 to 2014), the report says reforms were hastened after scandals in the office of the prime minister where more than Shs 50bn was stolen and Shs 168bn was lost to ghost pensioners in the ministry of public services.

“There has been improved public expenditure management through the TSA, improved accountability and public expenditure use through the IFMS, reduction in ghost workers and the overall wage bill at MDAs and local governments through the IPPS and the decentralization of the wage and payroll management system,” the report says.

The major milestone of these reforms in particular is the decentralization of payroll management that has so far reduced the incidence of ghost workers and reduced the government’s total wage bill, the report adds.

“The TSA ensured the consolidation of all funds into one account which has eliminated the occurrence of idle funds in scattered accounts, thus improving the government’s liquidity position.”

The report says government borrowing is likely to be reduced with the elimination of idle funds and the consolidation of scattered accounts at the MDA level
Researchers found that by January 2014, 165 dormant bank accounts had been closed with Shs 14.9bn transferred from these accounts to the consolidated fund.

Another 380 accounts from the central bank were closed as a result of setting up the TSA.

The report says before the introduction of the IFMS, the existing financial management system had a number of issues that hindered the production of timely and accurate financial information for statutory reporting requirements and decision making in critical areas, such as budget planning, management, procurement, and asset management

Finance ministry defines IFMS as an IT-based budgeting and accounting system that assists government entities to initiate, spend and monitor their budgets, initiate and process their payments, and manage and report on their financial activities.

“The majority of the stakeholders consulted reported that the introduction of the IFMS improved public finance management by improving accountability because every transaction leaves a digital footprint,” the report says.

It also eliminated paperwork, and reduced red tape created by unnecessary bureaucratic controls that. Last week, the Open Budget Index (OBI), carried out by International Budget Partnership (IBP), an NGO monitoring public finance across the globe, shown that Uganda was the best in East Africa in budget accountability and transparency.

Despite improvements, the report says, there are issues that need to be sorted, including effective implementation of the reforms.    Other challenges include limited coverage of the IFMS and IPPS, limited interfacing of the IFMS with IPPS and OBT, limited internet and other infrastructure coverage.

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